Many readers of this blog know that I am a real estate agent, and often post home sales statistics here for the Brookside area. TodayI am writing a post about why there are so few homes for sale on the market in our area. I was showing some buyers homes for sale this weekend, and they seemed puzzled, saying ‘we are ready to buy, why aren’t there more homes for us to see?” It’s true! Inventory is very low…it’s a big topic of conversation among agents. Here are four reasons why:
1) Sellers don’t have enough equity in their homes. If a home was purchased during the peak buying frenzied years of 2005 – early 2008 with little or no down payment, chances are the owner could owe more than the home is worth since the market crashed in late 2008. Unless sellers have made substantial improvements, the housing market crash has created many homes worth less than what is owed. It will take a few more years of payments to make up the loss. Homeowners do not want to sell at a loss, so they don’t sell.
2) Many sellers have decided to “stay put”. The recession affected everyone in the U.S., even those that didn’t lose a job. People are much more careful about spending and borrowing. Many homeowners are thinking twice about ‘moving up’ to a larger home–they feel they can ‘make do’ where they are, perhaps updating the interior or building an addition on their current house. A larger home means more expenses regarding utilities, upkeep, and maintenance. Not moving can mean more money for travel, college costs, retirement, etc. A lack of move up buyers means less inventory.
3) Now that home prices are rising, some sellers may wait for ‘top dollar’ pricing. When potential sellers hear stories of homes going under contract in one or two days, sometimes with multiple offers, they know this causes an uptick in home prices. They may be inclined to wait until the market shows several months of rising prices before they decide to jump in and sell.
4) The good ones go fast. I’ve seen inventory move quicker this spring than in the past three years. Well maintained, updated homes in Brookside, Waldo (and Prairie Village) that are priced well sell within days. If a buyer thinks they can get away with a lowball offer on a newly listed, beautifully updated home in a great location–they will lose out. In this busy spring market, buyers have to be ready to write an GOOD offer when the house they want hits the market, or someone else will snatch it up.
It’s encouraging to see home prices on the rise and buyers are confident about purchasing. As we get past spring break travel and the Easter holiday, more homes for sale will hit the market. This is going to be a great homebuying season, with buyers and sellers feeling much more confident about home values and purchases. Be ready!