JSOnline: Listing edge up, but house sales drop - Experts say buyers' contingencies play role
Based on the latest statistics derived from Multiple Listing Service (MLS) for Southeastern Wisconsin, it still appears to be a buyers market. New real estate listings rose a mere one-half of one percent from a year ago. Unfortunately, during the same period, sales have dropped 11.2%.What does this mean? We have an excess supply of homes on the market this year versus last year. Buyers, sellers, brokers, agents, and the media are all aware of this. Buyers know that there is no hurry to act on any particular home in this market. They feel that they can continue to look and pursue other homes and keep their "best" home in their back pocket. This extended shopping period is one of the causes for the slowdown in the marketplace.
This article tends to focus more on the "domino effect" for why the market has become a sluggish, buyers market. Brokers are seeing more "home-sale" contingencies in their offers. For example, Buyer B cannot buy Seller A's home until Buyer A is able to purchase Buyer B's home. Perhaps Buyer A cannot buy Buyer B's home until Buyer Z is able to purchase Buyer A's home. And so on and so forth. Who knows how many layers of buyers we have to deal with under this arrangement. If you're currently renting and are pondering purchasing a home, then you are the best candidate for doing so. You can help eliminate this "domino effect."
I suggest that another solution for turning this market around is for The Fed to consider lowering the long-term interest rate. Based on discussions with lenders, if the economy continues to maintain its current position which is meeting many analysts' expectations, The Fed will most likely reduce the interest rate within the next 12 months. This should help shift the real estate market closer to the middle of the road - which will be good news for sellers.
I am personally holding on to next year for my business to grow - as you can read in this article. The Milwaukee Journal Sentinel contacted me for my opinion on the current situation and my prediction of what will happen within the next 12 months. I predict that the market will rebound in sales volume and sale prices.
Sellers, I ask that you remain patient. The tendency is to adjust your asking price to entice buyers to write offers. I'm also seeing many buyers write in a discount - meaning that the days of receiving full-asking-price offers are behind us - for the time being. Buyers have re-emerged in the market since spring, but the pendulum hasn't completely shifted from a buyers market. Sellers if your patient, you will get your desired price if you're willing to stick it out.
Joanne Cleaver, real estate editor for The Milwaukee Journal Sentinel, writes more about our local market and the national market. Click here to read the entire article, including my 15 seconds of fame>>>
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Labels: Real Estate
posted by David Ray @ 5:18 AM
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