Inventory is on the Rise
Active Inventory: The active inventory increased by 6% in two weeks.
Despite there being a deep backlog of buyers sitting on the sidelines waiting to pounce on homes that are just placed onto the market and multiple offer situations once again the norm, the active listing inventory managed to increase by 199 homes in the past two weeks. It has not increased by that much since April of 2011. The inventory now totals 3,407, eclipsing the 3,400 home mark for the first time since last December. The last time the inventory increased by a higher percentage dates all the way back to March 2007.
This is just the beginning of a new trend: more and more homes are making their way onto the market, and are remaining on the market because they are overpriced. Despite the deep pool of buyers and the low level of inventory overpriced homes are going to continue to remain on the market.
While homes are appreciating and that trend is expected to continue for some time common sense is still in play and homes have to be priced right to sell. Some of these homeowners are just testing the waters, thinking sure I will sell if I could get X price knowing X price isn’t likely while others have been swept up in the nonstop reporting of record price appreciation combining with record low inventory levels to create their perfect storm. However even with prices steadily escalating and inventory at very low levels, buyers are still price conscious and will not buy a grossly overpriced home (maybe we did learn something from the bubble after all).
Seller’s who are really looking to sell their home should start by carefully analyzing the most recent comparable sales and pending sales to arrive at the fair market value range for their home. Arriving at price based upon how much you want to net from the sale of your home can be a driving force for overpricing your home. There is no advantage to overpricing your home, you will go through all the inconveniences of listing your home for sale only to not reap the rewards of selling your home. Some sellers (and agents) think that you can start really high then gradually move the price down. The reality is the longer the home sits on the market the more stale it gets in the eyes of potential buyers and the price drops will make them think there must be something wrong with the home so they won’t even want to see it. Pricing it properly at the beginning of the process will save you a lot of time and money in the long run.
Last year at this time there were 6,354 homes on the active listing inventory, 2,947 more than today. That’s the lowest year over year difference since February 2012.