"Flooded by unrealistic
sellers, the housing market has changed.
These reports have enticed a herd of homeowners to come on the market
who all have thrown discretion out the door. They don’t carefully arrive at
price; instead, they push value to the edge of reason and arbitrarily arrive at
price. Within the last few months REALTORS® started taking listings even if the
homes were absurdly priced because the inventory was at a historic, extremely
anemic low. An overpriced listed home was better than no listed home at all,
counting on future price reductions to eventually achieve success."
A Lecture for Sellers: Get
REAL or throw in the towel.
In
the past month, the inventory has skyrocketed up 21% and demand has dropped by
16%. The last time this many homes came on the market over a two week period
was seven years ago, the Spring of 2007 during the subprime meltdown.
What
is causing the rapid change this time? Way too many overpriced homes are
hitting the market at the same time. Demand is dropping because there is a
drought of properly priced homes. The problem is that everybody has finally
caught wind that the home values are way up. From real estate mailers to
newspaper articles to the nightly news, multiple offers, sales prices above the
list prices, ridiculous price appreciation, and a lack of inventory have all
been widely reported. Reports from family and friends abound explaining how
neighborhood homes are closing at higher and higher prices. Everybody is
talking about the real estate recovery.
I've noticed it on the daily hotsheet I pull up from the mls on Huntington Beach homes and Fountain Valley homes. This hotsheet shows what is new, back on the market, price changes, gone into escrow, closed, etc. As I look at price changes, I estimate a ratio of 20 price decreases to 1 price increase. There is an occasional home whose price is increased. This seems to be a home that was in escrow over list price, is now back on the market and the seller wants the current list price to be the same as the defunct escrow price. I wouldn't be surprised if that house has a price reduction in the next week or so....But coupled with the bump up in interest rates, those unrealistic list prices are dropping like crazy and it's better for everyone to have the market become less erratic.
