June
2007
WSJ online
Full Article
Rising Inventories increase pressure on Housing Market
Though existing home sales changed little in May, rising inventories could mean a worsening picture for the housing sector for months to come.
The 4.4 million existing homes on the market last month was up 5% from April and 24% from a year earlier. That represents 8.9 months of available supply at the current sales pace, up from 8.4 months of supply in April. Overall, sales of existing homes dropped 0.3% to 5.99 million homes on a seasonally adjusted basis, the National Association of Realtors said.
The facts do not lie there are more homes for sale than previous months. The state of home buying has slowed down – but it has not stopped. The market itself is not what concerns me but the consumer. The state of the consumer (the buyer and seller) that always worries me… Both buyer in seller are easily thrown into frenzies – (what do I mean?) – when the market is hot realtors push to buy quickly and pay whatever it takes or the house may be gone (which is true). ie. A associate of mine had a client go to a sellers home and offer an undisclosed amount more than the house was listed for cause of fear they would not get the house.
In down markets we push to lower prices and take what you can get while buyers are pushed to beat up the seller. The point is that a good product (apartment or home) priced right (aligned with legit comps) will sell in any market. The major difference is time: Sellers you will not be able make demands, rush buyers and will have to actually cater to the buyer ( as it should be ) – buyers you will have more leverage and more importantly time to make their very important decision.
In the end do not allow yourself to be put into a frenzy – try not to fall in love with real estate as most times it will not love you back.
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