Where have all the houses gone?
Nope, not the name of a new country song but it
could be.
Why is the inventory of existing homes on the
market so far down compared to last year?
· The
flood of foreclosures and short sales has all but disappeared, processing all the way through the market. There is not another wave of of foreclosures of any meaningful size that is on the horizon.
· New
construction is just ramping up. There are fewer new home developments
with a surplus of homes built and ready to go. Custom builders are seeing
an increase in business because there are so few existing homes move-in ready.
·
There are still quite a few owners that are upside down on their
mortgages – their home value is less than what they owe the bank. Over
the long run, prices need to go up to make these homes viable for sale.
Unfortunately, it takes time for prices to rise and there aren’t enough sales
happening right now to speed up the price increase. Back in the day, if a
homeowner was upside down, they only had to wait a few months for the market to
catch up to them. Not anymore.
So for now, even with interest rates at
historical lows, we can still expect inventory to stay low. As prices
inch up over time, we can expect to move towards a recovery with an increased
inventory of existing homes.
PS – This is great news for those of you who are
selling that are not upside down on your mortgage versus home value. You
will sell quickly and be at or above the current market value.
Sandy LeRette –
Realtor® ABR – Better Homes & Garden Real Estate / The Masiello Group – 436
Amherst Street, Nashua, NH 03063 cell: (603) 661-7301
email: slerette@masiello.com
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