Market Conditions in 80120>Question Details

Jan Baer, Real Estate Pro in Littleton, CO

What’s Behind Falling Housing Inventories? The Wall Street Journal recently highlighted several reasons behind the dropping inventories, including:

Asked by Jan Baer, Littleton, CO Thu Jan 24, 2013

1. Sellers hesitant to sell
2. Not enough equity to trade up
3. Investors continue to snatch up properties
4. Banks are slowing down foreclosures
5.Builders are doing less building
I believe the market is rebounding in Colorado, but we still have the basic economics of Real Estate 101 SUPPLY and DEMAND! Need more properties on the market (Inventory) to keep up with Buyer Demand!

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3
Robert McGuire’s answer
Jan,

Those are all good answers. But even the sellers who have equity are hesitant to sell for 3 reasons. They are not aware of the significant price increases all over the Denver area that could make this the best time for them to sell. They are not aware of the supply and demand issues that make it a quick and easy time for a seller to get a home sold often with multiple offers. Also, the sellers thought is "what if I do sell my home quickly and there is nothing out there for me". We will see what happens next as we get to spring. there are still buyers and sellers who have the old thought process of waiting to springtime to buy or sell.

Robert McGuire ASR
Realtor/Consultant
Your Castle Real Estate
Direct - 303-669-1246
http://about.me/robertmcguire33
0 votes Thank Flag Link Sat Feb 2, 2013
I agree with your current assessment on the current market and your reasoning behind it, however, another shoe may drop on the market this year as another round of layoffs become from major corporations becomes more frequent and it is stating to happen now. I know a lot of engineers that have gotten laid off in a sector. Whole departments.
0 votes Thank Flag Link Thu Jan 24, 2013
4 & 5 don't really apply in my market (we didn't have many foreclosures and new construction is about as rare as it ever was though redevelopment continues). #3 is happening here - loads of cash buyers, multiple bids, etc. Maybe #2 has some impact.

My question is about #1 - why are sellers hesitant? Here it's in part because there's nothing for them to buy if they want to stay in the area. Others talk about holding on since they think they'll make more money in the future. But I'm not sure that explains it all. It's nuts - inventory is SO low.

The way to make a lot of money in real estate is to go against the flow - buy when others won't and sell when others aren't. Don't be a sheep!!
0 votes Thank Flag Link Thu Jan 24, 2013
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