For Sellers Only!
Our inside sources and information indicate that we are headed toward a surge in inventory that will create downward pressure on prices in the next few months. Added to that is the eminent release of the “shadow inventory” (homes foreclosed by banks and short sales) that will add to the inventory. These discounted prices of these distress sales will also and effect prices. We also anticipate that Buyers will not be waiting for traditional seasons like summer to purchase due to rising interest rates. All indicators show… if you need to sell now… sell quickly!
Consider the facts as we are now seeing them:
In simple Economics, value is based on Supply and Demand. The higher the supply of homes on the market (the inventory) the lower the value.
As you can see, an inventory of 4-6 months is a fairly flat market. When inventory (Supply) reaches a 6-7 month level, prices depreciate due to high supply and low demand. Anything above 6 months of inventory and it’s a “Buyers Market”
This graph of NORTHEAST ORANGE COUNTY shows the seasonal changes in inventory. You can predict where this graph is currently headed by looking at what happened last year. Inventory starts climbing in February until it doubles in summertime. The best time to Sell is February, March… not April and May when there is competition from other listings not to mention… the flood of distressed sales coming. Currently, North OC already has a 5.2 MONTH SUPPLY of inventory! As Spring and Summer approaches this number will rise to 7-8 months of inventory in North OC….
The release of Forclosed properties has been delayed by government moratoriams. Most recently, they were delayed when Banks got in too much of a hurry to get them on the market and the “Robo Signer” situation created more government intervention. With those delays out of the way… massive numbers of distressed properties are ready to flood the market.
As you can see, California has a whopping 16.2 MONTHS supply of distressed properties ready to hit the market.
So what can we anticipate looking forward…
Clearly we’re headed toward a Buyer’s Market. So we may not see prices like we have now again until well into 2012.
The Banks who control the shadow inventory are predicting…
So the Bottom line is… if you need to Sell, you should Sell quickly at the price you can get now. If you can wait until 2010, wait.
If you want to Buy, you should buy now before interest rates go up. Even if prices adjust down, it is more costly to wait and lose out on current interest rates.
Re-posted by permission…
Call me today to get your house sold before the shadow inventory hits the market!