Housing Inventories at All Time Lows
Market conditions have caused a shortage of homes for sale all over the Southland and especially here in Simi Valley. Generally speaking in a normal real estate market, you will find about 250 properties listed on the MLS here in Simi Valley. Today, there are only about 100 properties for sale. The MLS, Multiple Listing Service, is where Real Estate Brokers list homes for sale. Those 100 properties also include condominiums and townhouses along with single family homes.
If you know anyone who is looking for a home right now, you have heard of their frustration in finding a home. Interest rates are wonderfully low to be sure, and they are prequalified and ready to move, but unfortunately they have probably been writing offer after offer on fewer and fewer homes, and being beat out over and over again. Am I right? Â Yes Iâ€™m right.
So why is there a shortage?
In a normal market, homes that are foreclosed on go for sale at the courthouse. Those properties are sold for cash to investors who rehab the properties and then flip, or resell them on the MLS. What we have seen is an influx of CASH BUYERS. These buyers are Hedge Funds that are trying to find a way to make money while interest rates are low. These hedge funds have hundreds of millions of dollars to spend and they are picking up properties by the hundreds, rehabbing them and instead of flipping them and re-selling them, they are rehabbing them and renting them, with the hope that the properties will give them a great return in about 5 years when they plan to sell them.Â This is causing a real shortage of homes for sale and unfortunately itâ€™s making it difficult on our first time FHA buyers and our Veterans too.
Home Prices are on the Rise, Sellers are King
For those of you who have been on the fence about selling your home to move up, downsize or move out of state, this is the time. 2012 saw a rise in home values here in Simi Valley of 12% and we are expecting another 10% rise over the next 12 months. With inventories at all-time lows, and lots of buyers with pent up frustration over finding a home, we are receiving multiple offers on properties at over the asking price. Last week I spoke with an agent, who received 23 offers on a single property in three days; many buyers made offers on the home sight unseen! Â
What does this mean? Well, if you have been waiting to sell your home because you think you have to do lots of upgrades, or need to fix this or that, or just need to paint or replace that cracked driveway, or need a new roof â€¦let me tell you, you donâ€™t necessarily need to do anything in this market.Â