Just when we think we know what’s going on, someone throws a curve at us and we get plunked. There surely is a right time to do something and there is probably a right place, too. But what is right? And when shall we decide to admit that the City Different is not tracking national real estate trends? Really, we never have.
Our real estate market is still our real estate market and it is not the same as the national scene, or any of the nearby metropolitan areas such as Dallas, Denver and Phoenix (or Albuquerque, for that matter). Lots of the talk and chatter on a national level is about a shortage of residential inventory – a lack of homes for sale. Here is an example of some of that chatter and talk of surging sales: http://realtrends.com/blog/real-trends-real-estate-housing-market-report-september-2013
That is not the case in Santa Fe, NM. Sales are up here, but inventory is up even more.
One could argue that many of the homes for sale between $500K and $1 million, for example, are in need of upgrades, or in need of repairs, or are just plain overpriced. But that does not change that they are available inventory. Based on the last 12 months of sales, we have a present supply of 16.9 months in that range. If sales continue at the current pace, and no new listings come on the market, it would take us 16+ months to sell all 496 of those homes. Ouch!
I am unable to find an accepted definition of those numbers as describing a shortage of inventory. Please correct me if you are willing and able. And if you are a buyer, make that offer for what you are willing to pay, without worrying about offending the seller. I guess the seller could say no. They might mutter that they would rather wait for next year and get a slightly higher price.
The sobering truth is: we are in a buyer’s market and now is the right time and place to price homes aggressively. If we collectively slide through the winter with this excess inventory, next spring will reveal many disappointed sellers. New sellers will be ready to take their places at the closing table. I don’t usually use this phrase but it might be true “Now is the time to buy” if you can buy it right.
After all, which is better: listing a home today at a dream price only to sell it in 9 months at 85% of original price – OR – listing same home today at 83% of that dream price and closing on the sale in 30 days. Que’ is mas macho?
Performing the mathematics will answer the question. And there is no guaranty of a sale in 9 months anyway, when the inventory shows it could take up to 16 months… Maybe you have some information I don’t have access to.
Possibly the bigger fool theory is coming back into fashion in real estate? Did we ever really abandon Buyer Beware? Or did it just shift to Seller Beware?