Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
I have a feeling this is partially what is keeping inventory low. Until buyers are willing to pay a bit more, inventory will sit on the sidelines until people feel they can sell the homes bought from 2005-2009 without losing money. I know that's where I am I see that homes are selling quickly, but prices are still lower than they need to be to get me to sell.
That is what I am calling Shadow Inventory currently.
People who would sell, aren't in distress or worried about losing their homes, but just don't like current market pricing.
The problem they are facing is that if they DO release that inventory suddenly en masse in response to perceived market price increase, it will tend to weigh on pricing, and they may still not get the desired price for their homes.
People who are holding back on selling now do run the risk of prices dropping in the medium term. Don't think that this can't happen if a lot new build inventory finally comes on the market all at once and interest rates return to historical levels (read: Bernanke stops buying Treasuries) or if the mortgage interest subsidy goes away.
People who are holding back on selling now do run the risk of prices dropping in the medium term. Don't think that this can't happen if a lot new build inventory finally comes on the market all at once and interest rates return to historical levels (read: Bernanke stops buying Treasuries) or if the mortgage interest subsidy goes away.
Well, agreed with this (and Mike's post above), however, I definitely do not need to sell ANY time soon. I can afford my house, I like the location, and I'm happy with my son's school. I am recently separated though, so the yard is a bit much to maintain as a single mom, and I'd like something a little newer to also cut back on maintenance. However, those things are definitely wants and not needs and I'm happy where I am. So I'm just fine with hanging back and waiting on things to see where they go. If prices do drop for some reason, then I'll just stay a little longer.
I have a feeling this is partially what is keeping inventory low. Until buyers are willing to pay a bit more, inventory will sit on the sidelines until people feel they can sell the homes bought from 2005-2009 without losing money. I know that's where I am I see that homes are selling quickly, but prices are still lower than they need to be to get me to sell.
Speaking of prices going up...I have buyers that wanted to buy a brand new home in Heritage (WF, for those of you that don't know Heritage).
They had chosen 6 they liked. In the last few days, 4 have sold. When I called about the one they really liked, I found out it had sold. Five sold, 1 left (of the ones they wanted to see).
In the last 3 to 4 months, these builders have raised prices...$399,000 went to $415,000, etc.
Reminds me of years ago when the builders raised prices and called it "spring increase".
MY opinion is that if the new builds go up that much in price, existing homes will follow. Maybe not that much of a price increase but as long as inventory stays low, and there is a demand, prices will go up.
Speaking of prices going up...I have buyers that wanted to buy a brand new home in Heritage (WF, for those of you that don't know Heritage).
They had chosen 6 they liked. In the last few days, 4 have sold. When I called about the one they really liked, I found out it had sold. Five sold, 1 left (of the ones they wanted to see).
In the last 3 to 4 months, these builders have raised prices...$399,000 went to $415,000, etc.
Reminds me of years ago when the builders raised prices and called it "spring increase".
MY opinion is that if the new builds go up that much in price, existing homes will follow. Maybe not that much of a price increase but as long as inventory stays low, and there is a demand, prices will go up.
Vicki
Builders raised prices on new homes in Bella Casa also. In Apex for those who don't know...I know Vicki does.
That is what I am calling Shadow Inventory currently.
People who would sell, aren't in distress or worried about losing their homes, but just don't like current market pricing.
The problem they are facing is that if they DO release that inventory suddenly en masse in response to perceived market price increase, it will tend to weigh on pricing, and they may still not get the desired price for their homes.
I could sell my townhome now for more than I paid in 2007. This is a recent development.
We figure we'll hang on to it and rent it out. Still, it's encouraging.
__________________
When in doubt, check it out: FAQ
Building material commodity prices are up dramatically since last year.
Framing lumber pricing has been volatile, but generally is up about 35% or more YOY. NAHB: Framing Lumber Prices
Overall, construction costs are up over 1%. http://www.turnerconstruction.com/do...x2013Qrtr1.pdf
That does not take into account extreme competition for developable land locally. Many custom builders are desperately seeking land, and the deepest pockets are driving land prices higher.
This is a rising tide that will float all boats. If new home pricing has to be increased a few percent, or if features are pulled out to avoid more price increases, or it the supply just cannot meet demand, all this will impute more value to resale homes.
The market demand may also be reacting to the pressure of the MetLife relocation folks especially in Cary and Apex.
Based on what I heard they are leasing space on Weston Pkwy. If that is true Cary, Morrisville and Raleigh (briercreek area) will see a large boom. Apex will be a long drive but some folks may like it.
Please register to post and access all features of our very popular forum. It is free and quick. Over $68,000 in prizes has already been given out to active posters on our forum. Additional giveaways are planned.
Detailed information about all U.S. cities, counties, and zip codes on our site: City-data.com.
Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
I see that homes are selling quickly, but prices are still lower than they need to be to get me to sell.
