COMMENTARY: May 2012: Buyers have plenty of time but not houses.We are selling more homes than are getting listed.At this rate, if no more houses are listed, we would sell everything in 24 days.Days-on-Market is taking a serious dive in most zip codes.The listings that are present are going into contract very soon.If you or someone you know is on the fence about selling now, the market needs you.
Sales of existing homes is at a 3-year high.If the house is somewhat marketable, there are a few buyers for it.If it’s in great condition and a good location, there may be 10 or more buyers for it.But talk to me before preparing (“fixing”) your home for the market.Some items can be ignored but others can truly limit the sellers’ population of potential buyers.
Now consider the buyers purchasing power; rates are still creeping downward and we thought they couldn’t go any further.Wrong.Rate-locks are easy to come by as lenders just want the business to close and fund.But “rate”is not the only thing to consider when choosing a lender.I have met and worked with many lenders.Most have been good but a small number have been mediocre in supporting a buyer’s goal.Make sure you hire a lender that knows it is your money at risk.
The concept of “shadow inventory” is simple:Any individual property that is delinquent, in default, or foreclosed and vacant, qualifies as “shadow inventory”.The rest of the story is anything but simple.There is a wide spectrum of possible situations and hardships.But, also simple is the choice of endings:The borrower cures the default, or the borrower gets a satisfactory modification, or the borrower loses the home.The borrower can lose the home in a Foreclosure or a successful Short Sale.I am not in the business of working with lenders to modify mortgages (and that’s a service that should be FREE).The education and connections that a borrower can get from me are invaluable but, don’t let any REALTOR try to fool you, we don’t get paid unless the borrower has a successful Short Sale.(A pie maker wants you to eat HIS pie.)I won’t lie to anyone.The choice is also not mine to make but if the choice of a Short Sale is made, the borrower needs to hire a REALTOR with the experience and know-how to make it successful [or go without a paycheck].
Hire someone who is honest and knows where the decision-making occurs.Even with the last lender approval, the borrower has the right to fire me, stop all progress and cure the default, accept a modification, or allow a foreclosure.The borrower is always in charge.But when the decision is made to attempt a Short Sale, the packing should start immediately.There should not be any “testing of the market”.
Here are my interpretations and prognostications with regard to the major indicators:
- Sales are at a 3-year high but low inventory will have an affect in the coming months.It will remain a sellers market without dramatic and sustained submission of new listings.
- Momentum changes are positive with 44 zip codes experiencing an Up Tick in May.It can’t swing much higher and what goes up must come down.But the swing is probably going to be sustained as long as it’s a sellers market.
- Months’ Inventory is incredibly low =0.8