This Month in Forest Hills Real Estate: May 2012

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MAY 2012 MARKET UPDATE

The housing market and the overall economy are improving at modest rates nationally & locally, some areas have actually even gained momentum. The Conference Board’s CEO confidence index is up a notable 14 points—from 49 last quarter to a current reading of 63. A reading of 50 is the threshold above which indicates an optimistic outlook and below indicates pessimism. Rapidly growing optimism is a good sign for future hiring and growth.

The recovery is happening, though not at a breakout pace, but we have seen three consecutive months of year-over-year sales increases in Forest Hills. Existing-home sales are moving up and down in a fairly narrow range that is well above the level of activity during the first half of last year. With job growth, low interest rates, bargain home prices, and an improving economy, the pent-up demand is coming to market and we expect housing in Forest Hills NY to be notably better this year.

As rents continue to rise in Forest Hills, buying becomes a more and more attractive option as home affordability, or the percent of income it takes to pay the mortgage, continues to be among the most favorable in history. The current record interest rates, which factor into affordability, cannot last forever—buyers wanting to take advantage of this unique time in history will want to act before rates rise.

Home Sales

Home sales slipped 2% from the previous month to 489 units, and are 10.6% lower from a year ago. A strengthening economy is improving consumer confidence and drawing an increasing number of people into the market, however, in the local Forest Hills real estate market, there is not enough inventory of quality homes for buyers to purchase. As the Forest Hills market sees more new listings for their hungry buyers, local home sales could increase.

Home Price

The median home price decreased by 2% compared to the previous month and by .5% compared to a year earlier to $258,750. February & March were the first time in 9 months that home prices went up, year-over-year. In most areas over the long term, home prices have nowhere to go but up, this seems to be the case in Forest Hills NY.

Inventory – Month’s Supply

Housing inventory increased from the previous month at 17.5 months supply and was 24% above year-ago levels. This is an indicator that the Forest Hills real estate market is still a buyer’s market. It is important to note that inventory near a six-month supply is the threshold of a balanced market. Movement out of the deep buyer’s market that has persisted over the past three years is an important step that must precede a full-scale housing market recovery.

Interest Rates

Mortgage rates continue to boost home affordability by remaining below 4%—some of the lowest rates on record since 1971. These rates may have begun to find a bottom as there is not much more room to go down, adding to the urgency to buy a home now while these record lows hold.

Topics For Forest Hills Home Owners, Buyers & Sellers...

Pricing a listing at market value is a critical component to getting it sold. Here are a few of the advantages of pricing it right:

• Less Time on the Market. Forest Hills NY Homes that were priced at market value sold in half the number of days as homes that were overpriced.

• More Money. Pricing right when the home is first listed leads to sellers netting a higher percentage of their asking price, also referred to as the list-to-sell ratio.

• Less Hassle. When a home is priced right, it means that fewer buyers need to view the home to understand it is a good value—and that leads to fewer showings before getting an offer.

• Fewer Reductions. When a home is priced at market value, often it won’t need a price reduction. Depending on local market conditions, sometimes it will—either way, it will be less likely to require one if it is priced right to begin with.

• More Multiple Offers. Homes that are priced right are twice as likely to have multiple offers.  This can lead to a higher sold price and it puts the seller in the driver’s seat by providing more options to choose from.