Beginning this year, our elusive real estate market recovery is starting to show. Like Bigfoot, people kept swearing they saw it. But evidence was cloudy and inconsistent. Now the talk and self medication has a basis in factual data: inventory of homes has dropped steadily for 3 years running. That is one of the two variables used to measure market health. You already know the other one. Remember back when nobody was buying much of anything? The excess inventory was the primary suspect. Too many homes on the market kept buyers from coming to the conclusion that they should buy a home. That was partially because the prices (and values) were still seeking solid ground.
(First Quarter) March 31 numbers show: in all price ranges, inventory has come down 23% in the last 36 months.
A further breakdown is as follows: at $500K and below it is down 10% – from $500k to $1Million it is down 35% and above $1Million inventory is down 23%. This is an apples-to-apples comparison of 3.31.09 to 3.31.12 for residential property in Santa Fe County, NM. Because of these lower inventory numbers, the always grouchy absorption rate should also show improvement. I’ll be posting sold figures by the 10th of the month. We knew this day would come. And yet much hard work still lies ahead. Many homeowners are still underwater and that infamous shadow inventory still has to come onto the market and get assimilated. If you are underwater, or know someone, I know a guy that can help. He is blogging as we speak.
With inventory at sane and sober levels, we can really feel the distinction between homes priced to sell and that same old story that nobody wants to hear again – overpriced homes. Some listings today are getting multiple offers. That is a sign of a home priced to sell. That doesn’t mean all homes are priced that way. But some are, maybe some Bank-owned inventory, and those homes are not going to take very long to sell.
While this old geezer has been standing at the lectern preaching about inventory, many homes have sold and that momentum is building. But there are still many living in confusion and holding false hope for their own homes. There is not going to be another stretch like we had in 2004-2006 when a homeowner could mark up the price of their home just because they ran the vacuum cleaner. But if you do everything right, you CAN count on selling your home today, with buyers now coming forward with true intentions. Call me to discuss the definition of doing everything right. There is more to it than just the right price.
A few years ago you could offer your home for sale at give-away prices and even then not get a serious buyer to show up. The “recovery-in-progress” does not mean you can raise the price of your listed property. It just means you can expect serious interest if you position the home to sell in a serious manner. That is something you have not been able to count on for five long years.
Pay attention to neighboring sales. Watch the market for pending sale signs and further price reductions. This could be THE year, finally! This could even be OUR year. Maybe the Mayans were right!