Inventory has dropped in Southbridge, and sales have cooled. But do not become discouraged. The holidays stalled activity for a time, but unlike January 2009, this month has been unusually "abuzz" with inquiries of people investigating the market. Short sales and foreclosures continue to be prevalent in our Southbridge marketplace (there are currently five of them), with most of them concentrated in the townhomes.
With the existence of the foreclosure prevention programs which were absent in 2008 and early 2009, some sellers now feel they can hold their heads above water in the marketplace, as this inventory has dropped. We expect that inventory will climb soon, as those getting a head start on the spring market seek to take advantage of the narrow window of opportunity afforded to existing homeowners. (Those who have lived in their home at least five years and purchase a new primary residence with a binding Purchase Agreement secured by April 30, 2010 are eligible for the $6,500 tax credit.)
Prospective sellers in our current market should eliminate pricey updates to their home in preparation for selling. The dollar return will not be there. Instead, they should focus on inexpensive updates that go a long way. Replace brass fixtures for brushed nickel or oil-rubbed bronze, or swap out linoleum for tile. The money spent on granite countertops or finishing a basement in this market will not be soon recouped. Those planning on staying in their homes and wishing to add expensive updates should do so, and enjoy them to the fullest.
What to watch for: Watch the effect of the new regulation requiring lenders to "freeze" most of the costs disclosed to buyers in the Good Faith Estimate (GFE). A few costs can be modified within 10% of the amount stated on the GFE. Some unanticipated cost overages will have to be "eaten" by the lender. Expect some confusion and uncertainty in explanations of these documents, as well as possible delayed closings, as lenders and title companies work to sort out these new requirements. More about this on SouthBridgeTeam.com will follow...
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