Despite the incredible inventory shortages there are still some people overpricing homes and having to take price reductions, and usually having to sell for less than they would have if they had priced properly to begin with. Why? Market perception and the competitive mindset. Buyers used to bidding against 10 other people who see a house on the market for 3 weeks with a price reduction view the property with a jaundiced eye and are much less willing to give the sellers their number than they would be while competing with a host of other buyers, a dynamic which affirms value in their eyes. So don’t price at the “bid up” price.
More relevant statistics are better for analysis than broader ones. I’ve blogged about the amount of equity most Americans have in their homes as a bulwark against a flood of distressed sales. But when you break it down further to the vulnerable populations, ie those in mortgage Forbearance, the picture is actually even rosier. A full 90% of borrowers in Forbearance have at least 10% equity, which means there is no good reason for them to end up in a short sale or foreclosure. In addition 61% of those who were at one point in Forbearance have exited it! I’m not a huge fan of many types of forecasting, especially in times that are not typical. That being said the highest estimates I have seen for the number of homes nationally that could end up in foreclosure is 700,000. That’s the highest. For perspective in the last recession 3.7 Million did.
There is currently a .7(that’s point 7) months supply of homes on the market. For frame of reference in January of 2008 there was a 10.2 months supply!
There are soft spots in the market, namely close in condo’s. I ran Arlington, Alexandria and Fairfax county and a full 55% of the homes for sale are condos! Normally that ranges from 25% to 30%. In Arlington it’s even worse. Of the 374 homes on the market, 289 are condos, or 77%! Whether this trend continues is up for debate, but close in condos right now, especially on the higher end, represent a buying opportunity.
New construction continues to boom, and prices soar in large part due to increased materials costs. Lumber prices are up an incredible 200% from last April. So if you are looking at new construction reach out to me and let’s get you locked in on a contract price.
It’s a good life.