The local real estate market has a glaring deficiency. There is a serious shortage of inventory. This lack of available homes to buy has created the illusion of a wild market. We have moved from a buyer's market to a seller's market. Typically this transition is caused by a wave a buyer's coming into the market. At this time it is all about a lack of new inventory. The problem may lie in the scarcity of new development. Builders are stepping back into the market, but noticeably and understandably they remain cautiously optimistic.
The problem with existing homes is that many sellers are either underwater or too close to close. They are holding out for the market value to reach a point that they can sell and walk with enough cash to move up or move on. Until new inventory arrives the buyer's will be faced with few choices. This allows seller's to control the terms. All that said, the buyers are still looking for value. Most buyers in the market are struggling to justify the run up in price. I have found that overpriced listings will still sit in the market for extended periods. The action is in the well priced listings. Although the market is showing warm signs of a new lease on life, buyers also remain cautious as well. The 2009 crash is still fresh in their minds.
There is not a deep enough demand for sellers to run up their price. The market has a solid ceiling. If you price it right you will see it sell in less than 30 days. Sometimes a seller may list their home on the high side of the price range because they are trying to sell at a price that will clear all liens. Buyers should be aware of the market conditions and the reason one house may be "worth" more than another similar house. A traditional sale of a move in ready house will typically fetch more money than the identical house being sold as a short sale or even bank owned. Bank owned properties generally result in smooth transactions but often the bank behind the scene is very strict on terms. Short sales can be like a trip down the rabbit hole. I am finding that well priced move in ready homes with traditional terms are receiving multiple offers and well above asking price. Short sales and beat up bank owned properties continue to require longer marketing times.
Potential sellers that have been waiting for the market to come to them, may need to evaluate their situation now. Those who would choose to move "up" to a larger house may want to consider selling sooner, rather than later. The rising price allows for more equity to build in their current home but also leads to higher prices on the next house. If that house is a move up house, it is likely more expensive than the current house and will rise also. A ten percent market shift will net you $20,000 more on a current $200,000 home but the price of the next house that is $300,000 will rise by $30,000. That is the classic case of stepping over a quarter to pick up a dime.
Buyers need to pull the trigger. Prices are edging up and the longer a buyer procrastinates, the "smaller" their next house becomes. This is a great time to buy or sell a house. Jump in, the water is fine.
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