The main question we get asked ALL the time us “How's the Market?”
Well, that depends… Are you Buying, Selling, Investing or Renting?
In this blog post we'll address one area… Selling.
Our local market in Corona, California saw an approximate 24% increase in prices from January 2013 to August 2013. This price increase came on the heels of over a 50% decrease in prices since July of 2007. The cause of the 2013 increase can be attributed primarily to a massive lack of inventory.
Definition of Inventory: Total number of active, for sale listings that have not yet gotten buyer contracts on them. For example: When we say there is 4 months of inventory, that means that if NO other listings were taken it would take us 4 months to sell these existing homes.
How does this affect a seller and how they price their home and the time it will take to sell their home?
When we are in a transitioning market as we are now, defined as a market that has stalled due to buyers hesitation to enter the market for several reasons, sellers sometimes are not quick enough to adjust pricing to attract a buyer as the inventory (competition) increases. When this happens the home stays on the market longer and the price adjustments needed can be more drastic.
Buyers “hesitation” reasons: price increases means less buyers able to buy, lending guidelines tightening after 1/1/14, investor buyers who drove the 2013 market are declining due to inreased prices, the lack of inventory means move-up/move-down buyers who are trying to sell their homes can't find the home to buy w/o a contingency.
After several conversations with sellers this week I did some deeper research and what I thought was confirmed and I was also slightly astonished by the actual inventory increase.
These stats show exactly what I have described above using a snapshot of Corona Sept 2013-Feb 2014