The spring selling season is getting off to a good start, but home sales could still get tripped up by a shortage of available houses.
Redfin has reported that home tours were up 44% in March compared to a year ago and signed offers were up 36% year-over-year, which shows there is strong demand.
The housing market is "coming in like a lion," according to Nela Richardson, chief economist of the Seattle-based real estate brokerage firm. "We saw a 12% increase in new listings in February," she said at a housing market forum Tuesday sponsored by the Financial Services Roundtable.
Richardson is expecting a big March when the sales numbers are reported later this month. "But the question is whether it will be sustainable," the Redfin economist said.
"All indications are that 2015 is going to be a good year. But April will be the do-or-die month for housing," she told NMN.
CoreLogic chief economist Frank Nothaft told the FSR forum that he expects home sales will increase 5% in 2015.
But he noted that inventory of homes for sale is the "leanest in the past 30 years." In addition, mortgage credit remains tight which continues to inhibit home sales.
"Based on six underwriting criteria, credit appears tighter today than it was 15 years ago," Nothaft said.
However, consumer confidence is rising and the economy is producing better paying jobs, the CoreLogic economist said, which should help support the housing market.
The Redfin chief economist told the FSR forum that investors have mostly left the market and they have been replaced by traditional homebuyers.
"We are actually seeing fewer homes selling above the list price," she said. Buyers are concerned about overpaying. "There is a limit to what today's buyers will negotiate," Richardson said.
She also noted that sellers have been slow to adjust their prices to this new buyer. "There is often a mismatch between sellers' expectations and buyers' wherewithal."
