I just received an email from one of my “Investor savvy” clients in California regarding the dramatic increase in listing prices he’s noticed recently and his concerns as to whether these prices will hold up…here’s a brief synopsis of my response to his observation:
Prices are going up, up and up! Especially in price ranges under $200,000. Newly listed properties are getting so many offers within the first few days of them being activated on the MLS (Multiple Listing Service) that Buyer’s are waiving the Appraisal Contingency and bidding quite a bit higher than list price. This is the same non-sense that got us in to the situation we’re still trying to recover from. It’s scary out here! We got some great deals in the past couple years, and look at the inventory now, with only a shade over 14,000 “Active” homes in Maricopa and Pinal counties. Compare that to the over 34,000 Active homes that were available this same month in 2010. Very, very low inventory and there’s the strong economic influence of supply and demand at play. Currently, Bank Owned and Short Sales only comprise 18% of the Active market, with 82% being “Normal” sales, neither Bank Owned or Short Sales. It’s a great time to be a Seller and not so good for a Buyer, especially if your attempting FHA as a first time home buyer and getting beat out by the “big guns”. I don’t see the inventory getting back to a healthy range of 35,000 “Active” homes on the market for a few years. It’s going to be a struggle for home Buyers with Seller’s sitting in the driver’s seat.
We’re always analyzing the market and trying to get a pulse on what’s happening, what it means and what we can do to position our clients with any advantage we can. Interesting times again, I think we’ll be in for one heck of a ride, and a long ride at that!