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I've noticed lately that inventory is significantly down in my area. I do realize some people can't sell because they are upside down. I also notice much of the inventory is short sales with some foreclosures.
Where does that put a traditional sale? Is it considered a seller's market because inventory is down? I can see the market changing but I'm not sure what to make of it.
It's a combination of supply AND demand. You can have low inventory but, if no one wants any of the inventory, it's still a buyer's market. I've always heard it expressed as the amount of inventory and the sell rate. So, if you have (based on the number of homes you are selling a month) about six months worth of inventory, you have a balanced market. As that figure drops lower, you have different degrees of a seller's market and as the number goes higher than six months, you have different degrees of a buyer's market.
I agree with bbronston to some extent, and have even posted basically the same, but keep in mind---
It wouldn't necessarily be a buyers or a sellers market (and it most certainly wouldn't be an "agents" market).
This is the case too in one of the towns I work in. Low inventory - so when a buyer walks in with certain criteria there often are no homes to match it - the buyer (and agent) watch the market for six months and finally the right home comes on the market, now the buyer may want to negotiate the price way down, but the sellers certainly know that they too can posture since there is very little to choose from, and possibly nothing similar to theirs.
- Also if the seller can't come down in price on a traditional sale the buyer is at no advantage if the seller chooses stay and make their payment v.s. default/shortsale/deed in lieu etc.
Absorption rate tells if it's a seller's buyer's or neutral market.
Take all the solds for the last 12 months then divide by quarters. This is your baseline.
Take the amount of properties on the market and divide by the number of solds for the last 3 months. Under a three month supply is a seller's market. 4-6 is a neutral market and over 6 months is a buyer's market.
Banks are still holding onto numerous properties that if they release them onto the market they will take large loses compared to what they paid for them. These are the ones they overpaid for. So as long as they keep them off the market they can treat it as investment property. If you can gain assessment history for homes in your area, you'll find homes that were financed near the million mark before 2007 but are now down to the $300ks to $400ks. And banks are causing it to drop further, because they advertise teaser rates and then find multitudes of reasons to raise the rates making numerous people walk away. Thus the bank is not relizing the loss by selling it until a cash buyer shows up.
Becky. Be aware of massive backlog of preforeclosures in Fl.
Do yourself a favor. Sign up for one of those 7 day free trial websites of preforeclosures. Cancel on the 6th day.
Anyways I did. It's simply crazy how many homes I found in Seminole County in some state of preforeclosures.
Once you find those properties. Go to Seminole county civil court website. Because of Sunshine laws. It's easy to lookup homeowners an match them with civil case filings.
You will be amaze how many homeowners are in some state of default and those homes haven't hit the market yet.
I used one of those websites and found out why one of the homeowners in my neighborhood got his short sell approved so quickly while other home lagged on.
Duh. Found out that homeowner declared BK. so second lien what wiped out and that's why they got short sell approved quickly.
Becky. Be aware of massive backlog of preforeclosures in Fl.
Do yourself a favor. Sign up for one of those 7 day free trial websites of preforeclosures. Cancel on the 6th day.
Anyways I did. It's simply crazy how many homes I found in Seminole County in some state of preforeclosures.
Once you find those properties. Go to Seminole county civil court website. Because of Sunshine laws. It's easy to lookup homeowners an match them with civil case filings.
You will be amaze how many homeowners are in some state of default and those homes haven't hit the market yet.
I used one of those websites and found out why one of the homeowners in my neighborhood got his short sell approved so quickly while other home lagged on.
Duh. Found out that homeowner declared BK. so second lien what wiped out and that's why they got short sell approved quickly.
Thanks. I am aware of all those foreclosures. Apparently the banks have gotten smart and are slowly letting them trickle out. I know this keeps prices down as well. The market is just such a mess, I don't know what to make of it.
Thanks. I am aware of all those foreclosures. Apparently the banks have gotten smart and are slowly letting them trickle out. I know this keeps prices down as well. The market is just such a mess, I don't know what to make of it.
Florida is a different beast all together from most of the other states in terms of shadow inventory banks are holding back.
It's simply crazy how real estate prices keep going down in the Orlando area and I live in your neck of the woods. I brought my home in 2009 and real estate prices are down 20% just from 2009 so basically most of downpayment is wiped out already and I continue to pay extra into the princpal.
Real Estate prices are essentially down 40% from peak pricing (early 2006).
Home prices are close to 2001/2 levels here.
The only saving grace is rental prices in Lake Mary, FL are close to $100/square foot. Lake Mary generally and Seminole County generally have good public schools. Florida public schools in general are not very good compared to where I originally came from (Maryland).
So if you need to move and don't want to sell, you can get good money for a single family rental.
Becky. Be aware of massive backlog of preforeclosures in Fl.
From my understanding, the bubble states (AZ/NV/CA/FL) have already cleaned out most of their foreclosures. I expect those states will be the first to start to appreciate again. The NE has the most backlogged inventory, SE/MW in the middle.
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