Is Inventory a Problem?

     Answer to the title of the post: YES, it is a problem right now, so I think it's time to share some more information on where exactly we stand with the current market conditions. Are houses selling? Are people buying? Buy or Rent? All of these are good questions are deserve some answers so here we go! Home prices are definitely on the rise but the only question is how fast are they going to rise and how high will they go. I am not a fortune teller so I do not have those exact answers for you, however I can say that prices are moving up. The fact of rising home prices is causing a problem in many markets around the country. There was such a collapse in 2006 that mostly everyone lost value or equity with the dramatic drop in home prices. Therefore, a lot of people's mentality right now is to sit and wait it out and hope for prices to come back so they do not have to take a loss. These "would-be" sellers need to overcome their negative equity which statistics show is the main issue when deciding to list the home or not. Nearly 10.8 million home owners were underwater at the end of june. A lot of owners are even moving and buying a new home without selling their previous home, instead they are renting it in order to earn some income while waiting on the increase in home prices. "Many [would-be sellers] are waiting for prices to increase more before they can sell, and some sellers are keeping their current homes as a rental investment and buying without selling," Tom Avent, a broker-owner at Tom Avent Real Estate in Fresno, Calif., told Inman News.

     This is causing the inventory in many areas to be very low, especially QUALITY inventory. What I am seeing happen now with the market is unlike anything seen in a long time. Now you might say, well this guy is young, how much could he actually have seen happen in his career, and that is a valid point. However, I make it a point to do my research everyday, not only on current conditions, but past trends and analysis. Not only that, but I am privy to much more information due to the quality of agents that work here in the office with me. With that said, I want to share not only my thoughts, but the thoughts and opinions of seasoned agents as well. A crash like the one we went through is unlike anything seen in the housing market before. That is why we are experiencing new trends, statistics, reactions, feelings, etc. As I said before, sellers are very reluctant to put their house for sale due to the losses they will have to take, resulting in very low inventory. This low inventory is holding back the market in a big way, because for the first time that many can remember, a lot of buyers are giving agents their criteria for a new home and advising them to keep an eye out for anything that may come on the market because there currently is low quality inventory. I have seen over the past few weeks that if a home of good quality comes on the market it will sell in no time.
     Redfin conducted a survey of 816 home owners or "would be" sellers and eight out of ten believe that if they wait another year or two they will receive a good amount more for their home than if they were to sell right now. Only a measly thirteen percent believe now is a good time to sell. Contrary to popular belief, it actually is a seller's market in many areas right now. "Many sellers are still not aware of how strong our market is," Charles Roberts, co-owner of Your Castle Real Estate who serves as a director on the Denver Board of REALTORS®, told Inman News. "They still think it's a bad market to sell. Our job is to inform them about the market and explain to them that with a rising market, it has become a strong seller's market and to walk through their options." “Now it doesn't mean prices are skyrocketing like past cycles, but with the chance of multiple offers, it makes the process more appealing,” Lopez told Inman News.

     Now that we are seeing extremely good conditions to buy, we are seeing buyers all over who want to purchase a home. This means more bids on properties and possibly even a bidding war which could earn the seller's some extra profit on the sale. However, the people who are on the fence about selling should really move forward and consult a real estate agent (like myself!) in order to get an informed opinion on what their next move should be, or more specifically WHEN their next move should be.