Friday, April 29, 2016
This Market is in Desperate Need of New Listings!
While this is very good for sellers, it can lead to market problems as buyers become so discourage they just leave and go rent something.
Sellers are in the proverbial, 'catbird' seat right now and that golden sales opportunity may only last a short while. The market wants and needs fresh new inventory to help satiate the the thirst of all those buyers.
Many people associate this kind of rapid price increase as healthy for the market. It really isn't healthy, as it is not sustainable. A healthy and robust real estate market is one that grows at 4-6% annually. Double digit growth if allowed to persist for too long leads to uncomfortable negative adjustments.
That's why this market needs an influx of new listings now. Buyers are clamoring for opportunity to get into the real estate market. With inventory tight they are struggling to find homes they can buy. For quite awhile banks were holding on to their inventory to avoid having a flood of inventory crash the market. It's high time those banks start releasing a slow and steady flow of REO back into the market. Just enough to take the edge off the entry level market.
Homeowners that are currently living in a entry to mid level home that has a value less than 110% of the local median are in prime position to make a move up. The pressure on the bottom 60% of the market is intense and the step up market at 110-150% of median is much less competitive, This means a seller can sell their smaller home and get top dollar while having an opportunity to buy that dream upgrade house that does't have the same level of market pressure.
Don't get me wrong, there are buyers bidding strong on $400k homes as well, but I am not seeing the frantic crazy overbidding on the top half of the market like we all are seeing in the bottom half. Selling that $280k house today and stepping up to that $380k house is a pretty smooth deal for those in position to do it. Yet so many are choosing to stay put.
Any homeowners sitting in a 3 bedroom 2 bath 1500 square foot house wondering if it is a good time to sell. The answer is YES!