If you’ve been watching the Real Estate market from the sidelines from fear of lack of selection and bidding wars, good news may lie ahead.
As you can see in the graph above, May’s numbers continued the trend of rising inventory as the number of homes for sale rose for the 3rd straight month. Rising interest rates, seasonal selling, and an increase in sellers who want to “test the market” with aggressive pricing are some of the factors that have contributed to the trend.
The Eye Test
Has this truly resulted in more selection for the frustrated buyer? That depends. The extremely “starved” part of the market in North Orange County through my own eyes continues to be the $600,000 – $850,000 price range. This price range consists mainly of single family homes between 2,200 – 2,800 square feet. That “bread and butter” size appeals to both the first-time homebuyer and a “move-up” buyer who currently owns a condo or townhome. For my buyers in this price range, more homes are appearing on the daily reports I run for them, but many of them are “stale” listings where the price is unrealistic or a situation with the seller where one of the parties is not truly motivated to sell.
As mentioned in another blog, one has to look at several factors in order to determine which direction prices are headed. The graph above shows that lender-mediated sales rose for the first time since November of 2012 as lenders adapt to the newly-passed Homeowners Bill of Rights and investors such as Fannie Mae and HUD sell off their distressed pools of notes.
At the time of running the reports for the above graphs, June numbers were not available. I expect June and July numbers to reflect a moderate increase in number of homes for sale. By the end of summer, inventory should be at “healthier” levels of at least 3 months. Keep in mind that most consider a market of under 4 months to be a seller’s market.
The bottom line: Inventory rising to 3 months is GOOD news for most. The homebuyer will have more selection and have a better chance at getting their offers accepted. For the “move-up” seller, they can now place their home on the market with better confidence that they’ll find a suitable replacement property.
