Shortage of Homes for Sale in Bay Area Creating a Great Opportunity for Sellers
After
several years of an oversupply of homes on the market and an
undersupply of qualified buyers, the tables have turned for the Bay
Area’s housing market. It may be hard for some consumers to believe, but
our local housing market has bounced back in a big way over the past
year or two. Eager buyers are once again out in force ready to purchase
their next home. But ironically, the only thing stopping them is a
serious shortage of homes for sale!
We’ve come a
long ways from the recessionary days when homes sat on the market for
many months or even a year or longer waiting for a buyer. Today,
properties are once again being snapped up quickly, often with multiple
offers due to the shortage of inventory. While this imbalance is
frustrating some would-be buyers, it is also creating a great
opportunity for savvy homeowners who have gotten the message that now
may be the best time in many years to sell their home.
In the Bay
Area, inventory levels are down more than 62 percent from a year ago in
some areas. This comes as the economy gains momentum and the job market
and the financial markets improve – all providing more ready cash and
incentives for buyers to purchase. The result is that there are more
offers for good homes for sale. Sellers are getting higher prices and
properties are moving faster than they have in years.
As a result
of this shortage of homes for sale in the Bay Area, we are back to
seeing offers with no contingencies in some cases, and buyers making
offers on several properties before they actually get into contract on
one. Multiple offers of $100,000 to $200,000 over asking price is not
unusual in some prime neighborhoods. In one extreme example, there were
28 offers on one property that sold over listing price by 20 percent.
The Bay
Area isn’t alone. According to the California Association of Realtors,
the state’s overall housing inventory declined in February, with the
unsold inventory index for existing, single-family detached homes
decreasing to 5.3 months, down from a revised 5.7 months in January and
down from the 7.5-month supply in February 2011. The index indicates the
number of months needed to deplete the supply of homes on the market at
the current sales rate.
Adding to
the strong buyer demand are record-low interest rates. Interest rates
fell to historic lows again in April. Thirty-year fixed-rate mortgages
averaged 3.87 percent, down more than 1 percent from a year ago,
according to Bankrate.com. Fifteen year fixed rates dropped to 3.11
percent and adjustable-mortgage interest rates were 2.73 percent in
April.
To be sure,
the housing market is once again coming alive. Real estate agents are
seeing 80-100 visitors at some open houses, multiple offers are no
longer exception, but the rule in many communities, and buyers are
showing a sense of urgency perhaps out of concern that record low
interest rates could be heading higher before long. Some recent comments
from our local managers:
- “Stale listings are selling, there are sales in one day, 17 offers on a fixer-upper, most probates are being overbid, heavy open traffic, frustrated buyers, off-market pre-emptive sales, cash deals winning the bidding. Great time to list!”
- “A condo that was listed 12 months ago and did not sell came back on the market with a five percent higher listed price and sold within a week at over asking price.”
- “New listings are flying off the market with double digit multiple offers, which are making final prices over asking. Inventory is still low. We are also seeing cash buyers more frequently. Buyers are ready to go.”
- “Our office had a high-end property listed on the MLS last year for 90 days that did not sell. The seller re-listed it this year and received multiple offers and it will close escrow over list price. What a difference a year makes!”
Sellers need to
sense the same pent up demand, excitement and urgency in the market
that buyers have sensed for the past year. They need to take the long
postponed leap to list their homes for sale now.
Simply put,
there just aren’t enough homes on the market to meet the tremendous
demand from buyers. And this is true in all price segments, from small
starter homes and condos right up to multi-million-dollar Previews
properties.
The days of
buyers being only interested in distressed properties at bargain
basement prices are over. Homebuyers are pounding the pavement looking
for good, well-maintained properties at fair prices in every segment of
the housing market.
The real
estate market has always come down to two simple factors: the law of
supply and demand, and consumer confidence. Right now, both of those are
creating a sellers’ market here in the Bay Area. Consumers are feeling
more confident as the economy picks up steam and the stock market turns
in strong gains in 2012.
Clearly, the scales of supply and demand are
tipping heavily in favor of sellers today.
Smart,
strategic homeowners understand all this, and they’re making their moves
right now – not six months or a year from now. They’re the ones getting
multiple offers for their home because there just isn’t a lot of
competition for buyers’ attention. They’re out there now, before
everyone else joins the “house party” and tips the scales back in favor
of buyers once again.
If you’ve
been thinking about selling your home, now is the time. I’m happy to
answer any questions you may have, and to help you get the very best
possible price for your home while demand is so strong.
[Via Reality Check]
Janice Lee
International President’s Circle
Top Producer, Realtor
415-832-9151
JaniceFLee@Gmail.com
DRE
#01720205
Your post has an incredible content. I had a great time with it and I am impressed with your blog. A lot of thanks for sharing.
ReplyDeletehouse and lot for sale Philippines
You have such an interesting and informative page. I will be looking forward to visit your page again and for your other posts as well. Thank you for sharing your thoughts about houses for sale.
ReplyDelete