Is it a Buyers OR Seller’s market..? Well, that depends…
February is historically a “ramp-up” month in real estate; however, 2012 is shaping up to be a not-so-typical year. This is both good and bad. The reality is this is a very different market than we have experienced in years past. This is due mostly to the financial crash that began in 2007 followed by high unemployment and the fallout of a stable/confident mortgage market.
There are some interesting facts we can look at to help understand why we are here and a glimmer of hope that lies on the horizon. As one speaker at our Windermere 40th Anniversary Kick-Off event said – “we are on the curve”. To me that is another way of saying we have bottomed out and noticeable change is just around the corner. Also, as my last blog post indicated – “Often times we are not always aware of things that “change” in our lives until after the change has occurred…” Well, I am here to say, we have hit bottom and due to a lack of new construction and non-bank involved properties available, we will likely continue this leveling out and maintain a similar pace into 2012 through the next few years.
So, here is my reasoning as to why we are here, what opportunities lie ahead and what buyers and sellers should be aware of as you explore your goals and objectives regarding housing in 2012.
First; the abundance of properties that make up the real estate market are bank involved (also known as “distressed properties”). These include pre-foreclosure properties commonly referred to as “Short sales” or “Auction properties” and when they don’t sell as one of those property types, they ultimately become “REO properties” (also known as “Bank Owned” properties). Because of this, the sellers who remain flush with their mortgages but have a need to sell are stuck having to compete with these properties in order move on to their next destination. Of course this can create a perception of frustration and concern. However, there lies opportunity and hope as most buyers in today’s world would prefer to deal with non-bank involved properties. In effect, this can create a sellers’ market for those sellers who are both financially secure and realistic about their expectations have an opportunity to cash in while competition is low.
Second; the amount of available inventory has diminished in most markets and the building of new construction has not been increasing along with demand. This leaves great opportunity for those sellers who can afford to sell and has effectively limited the amount of available options a buyer has to choose from. Conversely, buyers are still in a perfect position to cash in and put their hard earned money into a home. The market that is ripe with investment opportunity, mortgage interest rates are still historically low and will likely stay low for the remainder of 2012. The fact is, until housing starts [AKA New Construction] increase and bank inventory is absorbed we will not see much of a variance from what we are seeing today.
Market times are down, pending sales are up – we are seeing balance in a market full of opportunity for anyone willing to participate. So, whether you are looking to buy or sell in today’s market, there is opportunity and potential to accomplish your goal. You just need to be realistic about your expectations as a seller and know what you want as a buyer – then act accordingly.
I am always available and am happy to provide you with some of the many resources we have compiled to help illustrate the state of today’s real estate market. Feel free to post comments or contact me directly with any questions.
Kind Regards,
Dave Ripke – 206-498-7888 direct
Managing Broker | GRI | Certified Negotiation Expert | Certified Short Sale Negotiator
Windermere Real Estate/North, Inc.| Phone: 206-498-7888 | Fax: 425-776-5680
To any buyer still “on-the-fence” as we enter 2012…
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Often times we are not always aware of things that “change” in our lives until after the change has occurred. Today’s message regarding our real estate markets is news of change. As your trusted real estate professional, I feel an obligation to help guide you in the right direction when you are considering a purchase/move.
Have you ever heard the saying – “when you see a property you like – chances are someone else will like it also…” – Well, that is still the case but the market has changed. Inventory levels have dropped, pending activity has risen and demand has increased.
The fact is the market fluctuates and it has consistently been building momentum. Given the LARGE uptick in demand vs. a consistent shrinking of high inventory levels we have been experiencing since the financial meltdown of 2007 I feel we are entering a whole new arena going into 2012. Historically there has never been a more opportunistic time to be a buyer in the real estate market and the growing
momentum we are experiencing is a key sign that now is the time to take advantage of the opportunity to purchase a home.
Here are some interesting facts that may help shed some light on my perspective of our current real estate market:
- Inventory across all markets is down by 20% to 30%! (this means less properties to choose from and the homes that are clean & priced correctly are gone fast!)
- Drastically shorter market to sale times (average for 2010 through summer of 2011 was about 120 days and has steadily dropped to less than 60 days!)
- Interest rates are STILL historically low
- Employment projections are up (Boeing, Microsoft, Google and Amazon to name a few…)
- Retail spending is much higher than anticipated (this means consumer confidence is on the rise!)
- Banks are making it easier for buyers to qualify
- Short sale and bank encumbered process are refined (closings within 90+/- days vs. 120+)
- NEW construction is at the highest it has been since 2009 (when builders start building it’s a good sign!)
To support some of the information/facts provided above, I have included several links for you to review. These are some of the many sources which will help to show you where the market stands and where we are likely headed as we enter 2012.
New construction:
HUGE Boeing announcement:
Low interest rates:
http://www.inman.com/news/2011/11/10/low-rates-sparking-demand-mortgages
Shadow Inventory down NATIONALLY:
http://www.inman.com/news/2011/12/21/shadow-inventory-down-16-a-year-ago
Months of inventory down:
http://www.seattlepi.com/realestate/article/Home-sales-up-prices-down-in-November-2346676.php
Happy Holidays!
Managing Broker / GRI | Certified Negotiation Expert | Serving customers since 2001
Windermere Real Estate/North, Inc.| Phone: 206-498-7888 | Fax: 425-776-5680
