Inventory declines should drive home appreciation
As housing inventory continues to fall, prices will grow.
That's the story locally and nationally.
Last month, Forbes reported the U.S. home supply was just 1.74 million, or about a four-month supply at the current sales pace. That is the lowest supply since April 2005.
A healthy supply is about six months.
In the Greater Harrisburg area, active listings dropped to about 4,300 in the fourth quarter of 2012, according to Central Penn Multi-List Inc. That was the lowest quarter since the fourth quarter of 2009, when there were 3,940 active lists.
Meanwhile, median sale price ticked back up to $159,000 in the local area.
With a roughly three-year lag in new construction because of the recession, that inventory could remain lean and resales should see continued growth in sales price, said Michael Pion, president of the Greater Harrisburg Association of Realtors.
"It takes two or three years to take a raw piece of land through the approval process to having finished lots," he said, though noting home construction has started to pick up.
In a recent commentary, Colorado-based Real Trends equated this seller's market to a combination of record low interest rates, low relative prices and the rush of investor purchases clashing with millions still having negative equity and the jam in the foreclosure pipeline.
The number of homes listed on Zillow dropped 16.6 percent year over year in late February.
With more buyers than sellers, expect more competitive offers and noticeable appreciation this year, said Ryan Hess, broker and owner of Lancaster County-based Coldwell Banker Select Professionals.
The GHAR reported 0.1 percent appreciation in 2012 after a decline of 3.7 percent in 2011.