MaryEllen Roy, REALTOR®, Coldwell Banker Realty

No, it is not a bubble. When asked if today’s high buyer competition and rising home prices are evidence of a housing bubble, Lawrence Yun, Chief Economist at NAR, said this “is not a bubble. It is simply lack of supply.” Today’s housing market is healthy, and rising prices are driven by real buyer demand.

There are usually three reasons why a house doesn’t sell: *Price. The property could be overpriced. *Marketing. There was very little marketing done to expose the house to the most amount of people in the market. *Condition. There is something wrong with the property could be turning buyers off.

We’re in a serious sellers’ market. But what does that really mean? And why are conditions today so good for people who want to list their house? It starts with the number of houses available for sale. The latest Existing Home Sales Report from the National Association of Realtors (NAR) shows housing supply is still astonishingly low. Today, we have a 2.6-month supply of homes at the current sales pace. Historically, a 6-month supply is necessary for a ‘normal’ or ‘neutral’ market in which there are enough homes available for active buyers. When the supply of houses for sale is as low as it is right now, it’s much harder for buyers to find homes to purchase. That creates increased competition among purchasers which leads to more bidding wars. And if buyers know they may be entering a bidding war, they’re going to do their best to submit a very attractive offer. As this happens, home prices rise, and sellers are in the best position to negotiate deals that meet their ideal terms.

Mortgage rates remain near record-lows, and low rates mean greater purchasing power for today’s buyers. If you’re looking to get more home for your money, now’s the time; experts predict rates will rise.

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