Inventory Down, Competition Way Up
I long for the days when you could actually get out and see a property before it was either sold or had 10 offers on it! For those of you not currently in the market for properties, this short post can serve as a market update. Since January 1, the market has heated up to 2000-2004 levels where properties are sold before the signs go in the yard.
It is common typical expected nowadays that a property in a decent area at a decent price will have 5 or more offers on it within the first week it comes on the market. Here is my humble opinion of what is happening:
- The banks took the bailout money last fall and agreed to put a moratorium on foreclosures. That dip in supply is still with us.
- More investors have moved into the market. They are taking cash out of other investments to pour it into the fantastic real estate market.
- The Obama $8000 and other government subsidies have pushed first time home buyers into the market to gobble up cheap houses.
- Low interest rates have also stimulated new buyers into the market.
All of this makes for a often frantic and frustrating market condition. It seems like we are getting 1 offer accepted for every 10 we submit. This applies to REO properties, cash offers, and even overpriced properties. Jen at twincitiesrealestategal.com told me that her customer bid $61k Cash for a $40k house last week and still was outbid somehow!
I can’t wait till things stabilize!
Subscribe via RSS
Subscribe via Email
This current buying climate is extremely frustrating for buyers and agents alike. It takes a very persistent realtor and buyer to get deals done.
I would add to the post that a LOT of the offers are from newbie investors or first time buyers who think they can get the farm for nothing and are submitting low offers and so if there are 5 offers, 3 are low ball and 2 are close assuming the property is properly priced. As a mortgage broker it can get frustrating working with someone writing so many offers when a reputable real estate agent can get them into a good home for a good price.
It keeps varying here. One month it seems there’s a ton of offers, next month it seems there are none. My hunch actually is the listing agents are creating artificial demand by stating there’s more offers on the table than there are. Seems really common, and questionably ethical.
In the end though, the artificial offers aren’t buyers, they are phantom ghosts, and I think in the long run it’s hurting our local market.
I agree, can’t wait until they stabilize.
I previewed two new on the market REOs yesterday. Day 1 for a house in Richfield, day 3 for one back on the market in Burnsville. The counter tops were already full of cards, and there were two other agents at both properties. It’s nuts!
And pardon me for asking, What’s stable?
The DOC just posted a statement on the MLS addressing this issue ..It’s mandatory for an agent to list the property as pending once they have a signed purchase agreement. Not only does it waste time if it’s not disclosed to agents but it makes us look bad.I had a client today who wanted to write an offer on a home that was only on the market 3 days. we actually sat done at the kitchen table and started drafting the document. a home inspector walked in a surprised us. Apparently the home was sold pending inspection .. To get ahead of the pack have your agent set up an auto search and send you new listings as soon as they hit the market..
Mark my words Scott:
Things will get better for us buyer agents. More and more BPOs are being ordered everyday, and by the end of summer I anticipate the market to be a little more listing-heavy than it’s been in the past 3 months.
You all better get use to this because this is the market until at least 2012. Unemployment will be at double digit, more foreclosures are coming and banks will continue to price properties aggressively all the while more investors will continue to enter the market.
Things are heating up for sure! Get ready for the next wave of foreclosures coming! What a great time for first time buyers to be looking!