“We always predict a post-election bump (in home sales),” says Kyle Smith, chairman of the Great Tyler Association of Realtors. “But this time around, it was delayed. What these numbers tell me is that post-election, people were still uneasy, not knowing what the fiscal and trade policies of the new administration were going to be. But now that people are seeing what President Trump is going to do, they’re showing more confidence. They’re willing to go out and make the big purchases.”
The National Association of Realtors has a new survey, released on Wednesday, that supports Smith’s analysis. In its quarterly Housing Opportunities and Market Experience (HOME) survey, the NAR said consumer confidence is rising nationwide.
“In the first quarter of 2017, 72 percent of people believe that now is a good time to buy a home,” NAR reports. “Forty-seven percent believe that strongly, up from 45 percent in Q4 2016 and 44 percent one year ago in Q1 2016. Sixty-nine percent of people believe that now is a good time to sell a home, up from 62 percent in Q4 2016 and 56 percent from one year ago in Q1 2016.”
Additionally, a full 62 percent of the public say the economy is going to improve.
As GTAR’s Smith notes, that’s a self-fulfilling prophecy. Consumer confidence is both the cause of and the result of dynamic economic activity.
“Our numbers are reflecting a very active, very healthy market,” Smith said. “They’re demonstrating confidence not only in the overall economy, but confidence in our area and in their jobs, if they’re purchasing a home.”
BY THE NUMBERS
The average and median home prices both ticked up in February, Smith noted. The average price went from $208,673 in January to $211,669 in February. That’s an increase of about 2 percent.
“That’s a good, moderate trend,” Smith said. “It’s a sustainable appreciation in prices. What you don’t want to see are big spikes. Big spikes mean there’s some outside influence that’s disrupting your market. What we’ve got is just what you want to see.”
The median price – which can be a more useful gauge, because it’s the mid-point of all the homes sold, and isn’t skewed by unusually high or unusually low prices – also went up about 2 percent, from $172,200 in January to $178,000 in February.
The average days-on-market for homes in Smith County rose some, from 64 average days-on-market in January to 71 days in February. But that’s after a similar decline in January, from December 2016’s 72 days. So the increase could be simply a reversion to the mean. Either way, it’s not enough data to establish a trend.
Finally, the month’s inventory stayed steady at 5.3 months. Month’s inventory is how long, based on the past year s sales rate, it would take to clear out existing inventory with no more homes introduced into the market.
ON THE HORIZON
Expect the housing market to heat up in the next four to six weeks, Smith said. Because many homeowners try to time their buying and selling to coincide with the school calendar, more homes will come on the market in April and May, and more buyers will be walking through what’s available.
“The trend is already starting, with internet searches,” Smith said. “They’re looking at what’s on the market now, and they’re getting ready to make a move themselves. That’s buyers and sellers.”
But there’s another trend that could slow things down, at least in the new home segment of the market. Throughout the state, builders are facing labor shortages, particularly in skilled labor categories.
“With the oil prices coming up, many of the oil companies are starting to rehire, and a lot of folks who had left the oilfield to work construction are now going back,” Smith said. “And we’re seeing builders starting to slow down, because they’re shorthanded. That’s a local trend and a national trend. It’s something to keep an eye on.”