As reported here over the course of the last two columns, there is a substantial market turn around underway… with this news there is an obvious pressure on buyers to cash in on deals before they become even harder to find… but before Sellers begin to celebrate too wildly, they should be aware that we are emerging from this crisis into a very different market… Buyers are not becoming panicked… frustrated yes… but panicked no.
Bear with me as I go through the explanation… First of all there has been a definite increase in demand. This can be measured in units sold but beyond that easily measured statistic is market activity. While anecdotal, the observation has been made by myself and all the agents that I have been working with over the course of the last year, Buyers are out in droves looking for a home to buy. Now it could be that I only talk with the best and most active agents… If you believe that, please tell your friends that I am their guy. The truth is that the surge in sales is only the tip of the proverbial iceberg that is pent up and active demand.
Now the other side of the equation: Inventory (also known as supply). Equally well recorded and documented is that we are at a five year low in inventory… the number of Homes for Sale. These two facts alone impact what will happen in the near term and some of those changes are already underway.
With a shortage of homes for sale, the new home construction market has had a significant pickup. Many abandoned development projects are now active again, albeit with new ownership… Vacant lot sales have seen a dramatic increase to take advantage of the changing market dynamics to the point that the once over abundance of developed lots has seen a noticeable reduction.
Similarly influenced by the real change in market dynamics, REO (read foreclosure) properties that have been held off the market are reportedly about to be released by banks wanting to benefit from the more favorable sales conditions.
Even with these positive influences in the marketplace, buyers are not to be ignored.
I’ll try to make this simple: Buyers don’t like dumps! Buyers don’t really like the idea of having to work… the need to paint a single room can have a buyer wanting to continue the search, or expecting a heavily discounted price.
Want to take advantage of the market… offer a move-in ready, CLEAN and uncluttered home with no deferred maintenance. Remember: You don’t sell a home the same way you live in it!
This market truth is so strong, I predict that within the next 24 months you will start to see the banks with heavy REO inventories realize that the best way to minimize their losses is to get those properties in the most marketable areas move-in ready complete with new paint and carpet… and an appliance allowance.
So sellers… if you want to take advantage of the improved market. Don’t forget what buyers are looking for… Smart sellers never do!
May the market be with you.
