February 18, 2009
Shadow Inventory- Future Threat to Seller's Listing Prices
Market Update:
Housing prices are a reflection of the forces of supply and demand. When buyers are plentiful and housing inventory is scarce, prices will go up. That is not the market we find ourselves in now. Supply of homes is high and buyer’s are fewer…many buyers are waiting to see what will happen in the next few months. As long as more homes are coming on the market than homes that are selling, Sellers will have pressures to push their listing prices downward.
In addition to the current supply and demand imbalance we have another problem entering the market that we we’ll be hearing about more and more in the media. “Shadow Inventory” means that behind the current inventory lie more homes to come on the market in the next few months. This is caused by more foreclosures, ARMs that are re-setting, interest rates, and pent-up-demand by those who took their homes off the market during the Holidays.
The message for Sellers, is now is the time to price your home to sell. Pricing pressures will only be greater in the near future. Selling now will, in the long run, net more to your bottom line than holding out for an improving market and better price.
I know this is not great news for our Sellers but we are looking out for their best Seller’s Net figure. The sooner the sale the greater the net will be. The current market is simply a reflection of the forces of supply and demand. For more market data about your specific neighborhood, please contact me directly.
Posted By: 
Steve Randall
Tagged With:
sell now,
shadow inventory
and supply and demand
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