This time of year we REALTORS hear, “We want to wait till Spring to put our home one the market.” Or, “We want to take our home off the market during the holidays.” The thinking is that if you wait until Spring, the flowers are blooming, the grass is greener, and demand for houses increases. While this may have been somewhat true in the past, this year may not be the year to use that strategy. Pricing is determined by supply and demand, and there will be more buyers out there looking for homes in the spring. However, the largest concern of sellers should be the number of foreclosures that will be entering the market in the upcoming months. According to the chief executive officer at Realty Trac, which keeps a keen eye on the number of foreclosures and the data, “While foreclosure activity in the third quarter continues to register well below levels from a year ago, there is evidence that this temporary downward trend is about to change direction, with foreclosure activity slowly beginning to ramp up.” Because of some of the paper work challenges–remember the ‘robo signing”–this slowed the paper work down. Now, those foreclosures are in the pipeline, and the spigot is about to be opened.
The ‘distressed sales” competing listings for the sellers who want to wait until Spring will bring down the average sale prices. In the Twin City areas, the housing inventory is at a low not seen since 2006 and the median sale price is $149,250. That is a drop of 10% from last year at this time and a 37% decline from the 2006 market. One of the other factors is that only 3 0f 4 sales actually close. This is due to contingencies such as inspections, third party approvals, and low appraisals entering into the equation. There is still 44% of the market that is made up of short sales and foreclosures, but some of this is probably due to the lack of traditional sellers active in the market.
While sellers could certainly wait until Spring, there are many indicators that the inventory will also rise. Why not take advantage of the opportunity to secure a buyer while there is less competition? Just a thought.
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