Home sales expected to heat up soon

But with mortgage rates decreasing recently, paired with a stabilized stock market and greater levels of consumer confidence, it is anticipated more deals may be consummated over the coming few months.

“It looks like there is a strong potential to do significantly better than late last year,” said LePage.

An uptick in deal volume could result in rising home sales prices, which seemed to have temporarily slipped from the heights reached last year, according to data from the San Mateo County Association of Realtors showing the county’s median home price in February fell to $1.4 million, down from $1.6 million the same time last year.

LePage’s colleague Frank Nothaft, a chief economist for CoreLogic, shared his prognostication for swelling home sales prices in the coming months.

“With the Federal Reserve’s announcement to keep short-term interest rates where they are for the rest of the year, we expect mortgage rates to remain low and be a boost for the spring buying season. A strong buying season could lead to a pickup in home-price growth later this year,” he said in a prepared statement.

The home sales market typically swells during the summer season, when there are more buyers on the prowl and sales taper off during the winter when most will hunker down through the holidays and poor weather.

The CoreLogic data attempts to observe the seasonal fluctuations though, as the existing market is compared against activity from the same calendar month in the previous year.

To that end, with the encouraging signs shown for the home sales market, CoreLogic projects home prices will begin to pick up and increase by 4.7% on a year-over-year basis from February 2019 to February 2020. Such growth would be a departure from the last year, when LePage said prices largely stayed flat.

For those looking to participate in the expected sales upswing later this year and enjoy lower prices as well as reduced mortgage rates, LePage said potential buyers should hope for a surge in listing inventory.

“If your desire is for prices to not go up, then you are hoping for a lot more inventory,” he said.

There were more about 150 more homes for sale in February than there were the same time in 2018, when only 300 homes across the county were on the market, according to the SAMCAR data. The 448 homes on the market in February is only 30 fewer than the 478 listed last July, when the summer sales market was nearing its peak.

But despite the upswing, San Mateo County’s available housing stock has traditionally been insufficient to accommodate the demand to buy locally, so LePage suggested it is unlikely a sizable jump in the amount of homes for sale will occur.

In fact, he said most of the market forces are working against home shoppers hoping to find a deal during the forthcoming summer buying season.

“If all this continues, then you create a scenario in which you wouldn’t expect prices to decline,” he said.

austin@smdailyjournal.com

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