Sellers Market?

Where is the 2014 Real Estate Market headed?  No one has a crystal ball but if history has taught us anything is that the past will provide us with valuable information towards the future.  In Phoenix, AZ this past week at Keller Williams Family Reunion 1,000’s of the top agents, administrators and leaders gathered to listen to Keller Williams Co Founder and Chairman of the Board Gary Keller, and Vice President of Publishing & Executive Editor Jay Papasan speak about the upcoming year in real estate.  Packed full with 3+ hours full of information and research to help us guide our clients towards making the right decision.

A couple slides that jumped out to us where Home Appreciation:

Home Price Appreciation

Based on the above chart, a bottom is clearly indicated in 2009, where home values dropped a staggering 12.5%.  Over the course of 2007-2011 we averaged a 4.6% depreciation, which does not feel like the American Dream.  However, in 2012 and 2013 we see substantial growth and gain.  In the industry, we all felt it – multiple offers, traditional sellers entering the market place and low inventory levels.  It is not clear if we can sustain equity gains of 11.5%, but the recovery of the housing market is happening.

What created the big equity gains?

Months of Inventory

The above graph represents months supply of inventory, meaning that if no new homes entered the market it would take “X” number of months to sell the homes already listed.  At the very height of depreciation, inventory levels were at their highest (2008, 2009, 2010).  Buyers could be very selective in what they wanted to purchase because there was so many homes available to choose from.  6 Months of inventory is considered a balanced market, and as you can see in 2013, we had 4.9 months of inventory which tipped towards a sellers market – explaining the exponential appreciation of 11.5%.

Looking forward:

Underwater Homes

Slowly but surely with incremental equity gains, the number of homes that are underwater goes down.  How does this play a role in my market?  With more homes moving into the green, there are more sellers that can enter the market (inventory increase) and move up purchase (new buyers).

Hopefully this information is helpful and can paint of a positive picture with the real estate market and we are headed in the right direction.

About the Author

Katy Korby is the CFO of the Korby Home Team. Her passion is ensuring that our clients have an out-of-this-world experience selling their homes with the Korby Home Team. Katy comes to us with a diverse background and a unique skill set that enhances the client experience. Her attention to detail and care for people make her a wonderful asset to the team. Graduating with a degree in Theater, Katy has performed in numerous plays and most recently starred in a locally produced indie film that is being entered info film festivals around the nation. Katy’s experience in the work world include many positions within the accounting world including tax preparation, bookkeeping, and full-charge accounting. Most recently before joining the Korby Home Team, Katy was the Market Center Administrator for Keller Williams Integrity Realty in Roseville, where she was the full-charge accountant and handled budgeting and forecasting for the company as well as day to day operations and administration of an 80 person real estate office. Katy and her husband have two children, Libby and Calvin, and have lived in Como Park for almost two decades. In 2013, Katy completed the Tough Mudder 10 mile event and is a proud member of the “Finishers” group! For fun, Katy loves reading, photography and gardening and spending time with her family.