Is A New Housing Crisis On The Horizon?
As everyone who regularly reads this blog knows, the inventory of homes for sale in Pinellas County is at very low levels ... lowest in years.
Apparently this lack of inventory is not just a local problem, but one involving many regions of the country.
In the short run, this is good for sellers since scarcity drives prices upward.
Too much scarcity, however, can drive prices to the point where nobody can afford to buy the product.
That may be what the housing market is facing in a new sort of crisis.
I just heard a report on CNBC TV that echoes a worry that I have had for several months. The report said that if this low inventory of homes continues through the winter and into the spring, the scarcity of homes for sale will drive prices up too fast. Economists fear that home prices will rise faster than incomes, and will outstrip people's ability to purchase existing homes thus creating another housing crisis similar to the one experienced in recent years.
Moreover, the report stated that homes in the million dollar and up category are selling quite fast, but home sales in the $100,000 and less class are slowing. This is causing an artificial rise in the median selling price across the country which is making the average home owner believe his property is worth more today than it really is. I guess this is causing a lot of people to ask more for their house than buyers are willing to pay, and this of course will cause an artificial slowdown in home sales volume until price adjustments are made.
My reaction is that people thinking about selling might be well advised to put their property on the market now. Price it at true market value for today's market. By spring, you will probably have cash in your hand and the property out of your hair. If you wait, it may be more difficult to sell the property and heaven only knows where prices will be in May or June. Heck, it might be trending toward a buyer's market again!
Happy Selling!
Apparently this lack of inventory is not just a local problem, but one involving many regions of the country.
In the short run, this is good for sellers since scarcity drives prices upward.
Too much scarcity, however, can drive prices to the point where nobody can afford to buy the product.
That may be what the housing market is facing in a new sort of crisis.
I just heard a report on CNBC TV that echoes a worry that I have had for several months. The report said that if this low inventory of homes continues through the winter and into the spring, the scarcity of homes for sale will drive prices up too fast. Economists fear that home prices will rise faster than incomes, and will outstrip people's ability to purchase existing homes thus creating another housing crisis similar to the one experienced in recent years.
Moreover, the report stated that homes in the million dollar and up category are selling quite fast, but home sales in the $100,000 and less class are slowing. This is causing an artificial rise in the median selling price across the country which is making the average home owner believe his property is worth more today than it really is. I guess this is causing a lot of people to ask more for their house than buyers are willing to pay, and this of course will cause an artificial slowdown in home sales volume until price adjustments are made.
My reaction is that people thinking about selling might be well advised to put their property on the market now. Price it at true market value for today's market. By spring, you will probably have cash in your hand and the property out of your hair. If you wait, it may be more difficult to sell the property and heaven only knows where prices will be in May or June. Heck, it might be trending toward a buyer's market again!
Happy Selling!
-30-
posted by Terry Ward at 7:35 AM
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