Sales are up in Manatee County. Inventory is down 35% down from last year. The listing inventory in certain neighborhoods has dropped even more.
Here's why...(my opinion of course....)
1. Federal income tax credit
This is stimulating the entry level price ranges. In my market this is 50,000-250,000. This price range is getting fierce. Two offers last week went into multiple offer situations. Buyers who are trying to take advantage of the tax credit have really only 5 weeks to find, make an offer, qualify, and hopefully close within the 11/30 deadline. These buyers are out in force, and are aggressive with homes that are well priced. One home that came on the market last week had been bid up well over list price. This is happening very often now with correctly priced homes up to even 400,000. This is a BIG CHANGE! Last year multiple offer situations were almost non-existant.
2. Inventory is dwindling for good homes
A year ago there were plenty of homes to show buyers. It seemed that it was sometime "never-ending", now, things are different. I have 5 buyers, that are ready to go, but the perfect home eludes them. Multiple biding situations, poor home conditions, and short sales make finding and getting under contract with a suitable home challenging. Almost all the bank owned homes that are value priced are getting multiple offers, and Short Sales are getting back up contracts. Finally, the condition of these often neglected, abandoned homes is deteriorating quickly causing inspection issues. FHA, VA, and USDA have criteria that have to be present. So, even if by buyer could handle the "fixer-upper", the bank will not accept the condition of the home as a condition of the loan. Cash buyers are tough competition when you are a first time home buyer, needing closing cost assistance from the seller, and putting very little money down.
These qualified buyers know that this market has changed!
3. There is "pent-up demand" with many buyers waiting for the right time to buy.
I have seen baby boomers getting into the market, suddenly. They have enjoyed vacations here in Florida over their years. They feel familiar with the area. They enjoy our sunny, warm, climate. they want to live here, but they are waiting for the moment to act. It seems that for whatever reason there is a major increase in baby boomers looking at the market, and getting active. I think that the stock market recovery from last year, is helping soon to be retires to feel wealthier than a year ago. Also, I think that the constant negative media attention on our area has served as an effective marketing tool. Winter is coming, and if it is going to be a cold year I would suspect that we will see price stabilization early next year in that market.
Supply and Demand CONTROL REAL ESTATE PRICES. Inventory is down to 13.6 months!
Inventory is down, potential sellers who would like to sell, but will not sell for a loss are not in the market. Therefore, a buyer who is looking for a home in excellent condition, and priced at fair market value will have few options.
- I would encourage action from congress to implement a streamlined approach to deal with the flood of short sales. If the short sales could become more manageable, then more buyers who need a house in a hurry, will have more options.
- More successful short sales would also mean less foreclosures. Quicker short sales, and less foreclosures will increase the overall quality of all the homes that are on the market. This will help to stabilize prices and increase the options for homes that are in condition that can be financed.
- Stabilizing prices will lead to further increased consumer confidence. It's tough to spend money when you think your home is losing value every month
This is the time to buy a home. Inventory will influence price more than any other component
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