FEWER HOMES FOR SALE EQUALS LESS NEGATIVE EQUITY - FOR NOW
Again, the Pacific Northwest rebounds quicker than the rest of the Nation
Final numbers are in for King County, Washington, May of 2012. As you can see, there’s a 17-point spread between April 2012 and end of May 2012 ~ inventory stayed flat while sale price increased dramatically. As the home values appreciate the “negative equity” accrued is slowly but surely diminished. So how long do you have to wait to see the surface of the water? If you’re “underwater”, that is. Many institutions and individual professionals have been and continue to address that specific concern.
Should we wait to sell? Should we sell now? To sell or not to sell, that is the question. Perhaps we should just “fergitaboudit!” and redo the kitchen, convert the garage into Timmy’s ‘tween (wanna-be-a) man cave. And just wait till the kids move out and THEN look into it. Prices should be significantly different by then, certainly. But now?
Several factors enter into the equation:
1. Is this what we have been looking forward to? The time that our financial position will allow us to make the transition comfortably?
2. Do interest rates and mortgage packages provide enough incentive to make the change?
3. Is there enough selection for our residential needs?
4. Will this provide the maximum benefit for our family?
5. Does a move accomplish that part of our long-term goals?
These are among the questions you may ask yourself when considering market factors. Only you can decide if it’s time to “ride the wave” so to speak.
Keep in mind:
All the bank-owned properties (foreclosures, short-sales, repossessions, et al) you’ve been reading about haven’t suddenly disappeared. In fact they have helped increase the volume of sales in many parts of the country. Periodicals are proclaiming the REO asset managers (the companies handling the REOs and other bank-owned properties) complain there isn’t enough inventory for them to continue doing the brisk business they’ve grown accustomed to. And the big banks (i.e., Bank of America, Chase, et al) still have around 80% of their inventory held in abeyance anticipating higher prices.
Looks like many people and businesses have been waiting for the same thing.
Well, if lower inventory improved the value of our real estate, what will happen if the market gets flooded with a dramatic increase in the number of houses for sale? Hmmm.
So how long will this spike in prices continue? Ask yourself: If you were the bank holding assets that significantly lost value and you had to answer to shareholders what would you do? How much longer would you wait?
Hmmm. Perhaps there is a window of opportunity open now for the individual home seller that a big corporation can’t move quickly on. Just don’t know how long that window will remain open.
Let's not miss the chance to take advantage of this spike. Vollyball anyone?
JL4PL
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11 Comments on Real Estate Market FEWER HOMES FOR SALE EQUALS LESS NEGATIVE EQUITY
Phil, Great post. The same thing is happening here in North Idaho. I hear it's the same in Colorado and many other areas in the US.
Yes, and the same thing started happening Silicon Valley early last year.
What good news. This is what I've been expecting (hoping) would happen so it's good to see the proof. I'm hoping it just keeps getting better through the summer.
Gretchen
Gretchen, Lloyd, Wayne,
Localism isn’t limited to SEO - getting your localized feedback validates the impersonal statistics. Appreciate you taking the time to comment - have a great summer!
JL4PL
We have had increased sales in NH, but he prices are still down about 3%. We will see what happens over the next few months.
Another terrific blog! Localism at it’s best; information we can use in our day-to-day business here in the Pacific Northwest. Your data source aligns with the MLS well and accurately, allowing us to present it with our client data. And I’m particularly fond of the images - somewhat out of the mainstream but definitely eye-catching. Thanks again!
With regards and respect,
James
Phil:
The same thing is happening in my community. There are very few bargains now. The meager inventory causes those house which are priced right and are in desirable neighborhoods to received multiple offer pushing the sales prices up.
Phil - Definitely food for thought. We're seeing limited inventory in many areas and price ranges in Orange County as well.
Glad to hear your market is returning. I am starting to get the hunch that it is happening in a lot of places. It has been quite the ride for quite a while.
Still uncertaincy, but a lot of brisk sales going on.
PHil
It's getting very interesting out there in the "real" world, isn't it? Knowing and explaining local market trends is very different than what buyers and sellers may be reading/hearing about in the national news. Market turnarounds have subtle differences that turn a buyers market with lots of inventory of homes to choose from to a sellers market with low inventory, multiple offers and homes selling in excess of asking price.