A question and answer sit down with Realtor Jennifer De Vivo, Director of the De Vivo Team at Exit Real Estate Gallery.
1. Is it really a seller's market?
2. Why or why not?
We typically enter a seller’s market when we have less than 5 months of home inventory at any given time. Right now in Orlando home inventory is down 23% from last year and we only have a 3.22 month supply left. We haven’t had inventory this low since 2005.
3. Is this switch
happening all over the country or just in certain areas?
I see other major markets following the Orlando seller’s market trend, but no I don’t see it everywhere.
4. Is this a permanent switch?
While there is never a “permanent” switch in real estate, I believe we are going to continue to see the return of a seller’s market and the rising prices that come with it well into 2013.
5. Why are there fewer homes for sale?
There are several reasons, many people are opting to modify their loans since the process has become much easier and more efficient. Many people that are underwater can refinance their homes now with new programs there were not available before. I have also heard that some of the bigger REO property holders like Fannie Mae are opting to manage tenant occupied property instead of selling. I also believe that there simply aren’t as many foreclosures in the pipeline in the hardest hit areas like Florida, Nevada and California as there were before. In Orlando, home inventory has been this l
6. Why is the smaller home inventory changing the market dynamic?
Once buyer’s dive into the market and star looking for a home they are quickly surprised by how few quality homes are really available. As they see homes they are interested quickly going under contract and receiving multiple offers home buyers are motivated to put in higher bids especially for a home in good condition. They are also starting to see the value in purchasing a home that has been cared for and maintained buy a home owner who takes pride in their property. Since much of the market is made up by first time homebuyer who prefer move in ready condition they will often pay a traditional home owner more for a better maintained home rather than take a poorly kept foreclosure home where they can only use an AS IS contract.
7. What's happening to home prices?
In Orlando prices have gone up every month consecutively this year with no sign of stopping. The median price of a home is up more than 16% since January.
8. How should buyers react to current market conditions?
Buyer’s should take advantage of historically low interest rates and know that there are still great financing programs and financial assistance geared towards First Time Homebuyers. They can also be happy that they are buying in appreciating market and not have to ask the question “When will the market hit bottom”…the bottom hit over a year ago!