For LGIH...

After the fresh housing numbers have been dissected here’s what the market is coming to realize, courtesy of CNBC, and why I think it bodes well for LGIH.

http://finance.yahoo.com/news/low-supply-plagues-spring-hous…

The usually strong spring housing market could be far stronger this year, if only there were more homes for sale.

The number of listings continues to drop, as demand outstrips supply and potential sellers bow out, fearing they won’t be able to find something else to buy.

The supply numbers are even tighter in certain local markets: Inventory is down 32 percent in Portland, Oregon, from a year ago; down 22 percent in Kansas City; down 21 percent in Dallas and Seattle; down 17 percent in Charlotte, North Carolina; down 12 percent in Atlanta; down nearly 10 percent in Chicago; and down 8 percent in Los Angeles, according to Zillow. Houston and Miami are seeing big gains in supply, due to economic issues specific to those markets.

“The struggle will continue for home shoppers this summer,” said Zillow chief economist Svenja Gudell. "New construction has been sluggish over the past year; we’re building about half as many homes as we should be in a normal market. There still aren’t enough homes on the market to keep up with the high demand from every type of homebuyer."

The short supply is pushing home prices higher than expected this year. Zillow had predicted 2 percent growth in home values from April 2015 to April 2016, but its latest data show values currently soaring more than twice that, at 4.9 percent.

“In many markets, those looking to buy a home in the bottom or middle of the market will need to be prepared for bidding wars and homes selling for over the asking price. This summer’s selling season’s borders will most likely be blurred again, as many buyers are left without homes and will need to keep searching,” added Gudell.

The inventory drops are most severe in the lower-priced tier of the market. Homes in the top tier are seeing gains and therefore show more price cuts. Sixteen percent of top-tier homes had a price cut over the past year, compared with 11 percent of bottom-tier homes and 13 percent of middle-tier, according to Zillow.

Best,
–Kevin

18 Likes

My experience is only anecdotal, and only for the Charlotte NC market but I thought I would share. I listed my home last week. It was entered into the MLS at 8pm on Thursday night. Within 24 hours I had three offers…all above the asking price. Within 48 hours I had 5 offers to choose from and negotiated a contract with the one buyer offering cash. There was a sixth offer that came in after the contract was signed by everyone. My buyer had looked at over 50 houses and lost many to bidding wars.

If not for worries about appraisals I would likely have sold it for more as the demand would have bid it up.

LGIH is working on a new section of a subdivision not 5 miles down the road…there are really just getting started.

Thad

24 Likes

I have to echo Thad’s experience from Durham, NC. We put our home on the market on a Thursday in March. By Saturday at lunch we had 7 offers at or above asking price. We advised buyers of the high interest and asked for their best offers. We closed at $25,000 over asking.

We were told two things by the realtor. First was the whole supply/demand thing. Second, he said that our house, at $285,000 (asking) was in a sweet spot since it was both less than $400,000 (where alot of new construction is priced) and close to downtown.

Jeb
No position (yet) LGIH
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3 Likes

he said that our house, at $285,000 (asking)
Ughh. The deposit on the unit I bought in Singapore was more than that!
You should have posted here - I would have offered 30k over asking!
A
:wink:

1 Like

There’s also this from 5/24:

Stocks surged to their biggest daily gains since mid-March, propelled by a stellar reading on new home sales and a strong showing in tech and financial stocks.

U.S. new home sales rose at the fastest pace in more than eight years in April, and Toll Brothers jumped 8.7% after reporting a strong quarter and raising its forecast for home sales.

http://seekingalpha.com/news/3185366-stocks-post-best-gains-…

I’m moving; hence the name change from FeatherJackMaine.
Jack

1 Like

Happy balloon day, Ant!

Ughh. The deposit on the unit I bought in Singapore was more than that!
You should have posted here - I would have offered 30k over asking!

Yeah, but Ant, just think about that commute!

Matt
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See all my holdings at http://my.fool.com/profile/CMFCochrane/info.aspx

5 Likes

Yeah, but Ant, just think about that commute!

Matt, you get the funny-post-of-the-day award for that one! What an image! I could just see Ant flying back and forth each day.

The experience though certainly sounds incredibly good for LGIH!

Saul

1 Like

Ughh. The deposit on the unit I bought in Singapore was more than that!
You should have posted here - I would have offered 30k over asking!
A
:wink:

How long have you had your unit? I am considering selling as recent units in my condo still have gone above what I paid. A friend recently sold his HDB for about 15K over valuation which means the buyer had to put 20% of the valuation + 15K for the amount over valuation. Plus stamp duties… I am amazed anybody can still buy…

I am not sure I can get Chin or serjing easily… Fool duties have kept them very busy but I am up for a beer in the next wee or two if you are free