Well, here we are, AGAIN.

The circumstances are slightly different but the victims are the same.

In 2005, 2006 and 2007 house prices were on the rise.  There was no way they could come down according to every housing professional you talked to.  If you wanted that house, you were paying the piper and that was that.  

Then it turned out Bernie Madoff and his buddies were playing games with money that wasn't real, robbing Peter to pay Paul, and in September of 2008, it caught up and a lot of equity evaporated.

Here we are again.  A lot of professionals will and have been telling you different, but the same outcome is inevitable.

The supply side economic plan of dropping interest rates increased buying power and agents made sure you bid as high as possible to capture that home, because you needed it(they needed a commission too).  There were 16 parties bidding on one home.  Inventory had decreased more than 50% since the last crisis and people had to have the house.

The decrease in inventory is not a new thing but is increasing exponentially because of the problem of "where do you go, now that you've sold".

Now interest rates are finally up.  My kids are all adults now and don't even know about rates like these.  We've been living in a dream world of cheap money.  The good news is that the dollar will have value again.  The bad news is that we have driven up prices. 

This is the cure.  

If you're buying a home, plan to stay there for the long run, unless you can find a home that is finally coming down since people are not willing to put in sweat equity.  

Make sure your agent is experienced and not desperate. 

I still blame most of my colleagues for the current market. 

When people ask me about the market and what I think, I tell them that it is confusing and infuriating.  

Confusing???

That's easy.....

Take a look at this graph published by our local Real Estate Market for Havertown.

Wow.  Low Home(buyer) demand?  That would seem to indicate that Seller's would have to adjust their prices to attract buyers, right?!?!  

NOPE!  This is completely misleading when you look at the current inventory and compare the numbers to last year or over the last year.....

Yes, in February the number of new listings is out pacing the amount of pendings(properties that go under contract)....

But, the amount of pendings outpace the amount of listings from the previous month.

Why does that matter????

Because it takes 30 to 60 days for the average home to settle.

The real story in this graph is that the amount of listings is way down, and the carry over inventory is decreasing.

There are less than 25 houses for sale in Havertown and way more buyers that are interested.  Buyer demand isn't declining, there just isn't anything to buy. 

When I started selling Real Estate in Havertown there were more than 200 homes for sale! I have 20/20 hindsight and use it to my advantage....  

Tune into tomorrow for the infuriating part

John

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