Since a year ago, the economy has improved only slightly (a trend that began in 2009) and interest rates have remained largely unchanged. Yet, across the country, home prices are rising rapidly with lots of properties selling WAY over asking price. I recently heard of a very average home getting 33 offers!
So why has it suddenly turned into such a massive homesellers’ market?
The answer comes down to “Economics 101” — Supply vs. Demand.
From Austin to Boston to Long Island to Los Angeles, there are simply far fewer homes for sale. In San Francisco, the number of homes listed for sale has dropped a whopping 68% in just a year! Less supply and the same (or increasing) demand is driving the market.
Source: Redfin (TAN current and coming-soon chapters in pink)
Some Top Agent Network members tell us they have never seen so many anxious and disappointed buyers looking for houses. One agent mentioned a listing that received 20 offers with 19 of those offers being ALL CASH!
So why is inventory so low and why aren’t more owners selling in this hot market? The top agents we spoke with cite these reasons:
- All cash investors are scooping up lots of properties.
- Owners are reluctant to formally list their property for fear they won’t find a suitable replacement home.
- Some owners are still waiting for prices to return to 2006-2008 levels before they will put their home on the MLS for sale.
All the agents we spoke with said they have listings in the queue for release this spring. That should improve the demand-supply imbalance and temper the market a bit. If I were an active real estate agent I would advise my sellers to jump on this hot seller’s market before it cools. They can even be a little greedy on price.
Got a listing in the pipeline? Seize the opportunity to let your fellow top agents know about your Pre-MLS and Non-MLS listings while inventory is so low!
What’s happening in your market?