Supply and demand, right? Well, yes. And right now we are experiencing a larger than expected demand. Interest rates are still historically low, PMI has dropped 40%, Down Payment Assistance, etc. Shall I go on??
With such a demand, an equivalent supply must be present to quench the insatiable need for housing. Later this year we will see many projects coming out of the ground. Till then, the current inventory of home re-sales may just have to do.
In order to stabilize this imbalance, real estate professionals must help their sellers to pull the trigger on that potential listing. This refers to those home owners who are sitting on the fence. They need to see the great opportunity they have at present to get their home on the market now.
Traditionally, there are some tried and true methods that successful Realtors have used to get their clients to make the decision. However, simply explaining the simple principle of supply and demand and dignifying it with some facts and trends charts can be the best approach.
When a potential seller sees that it behooves them personally to list their home for sale now rather than waiting, it removes the perception that the agent is only concerned with his/her commission check. Right now, buyers are everywhere. Our market needs sellers.
The next three years will also bring a crowd of rebound buyers who weathered the storm of foreclosure or short sale. By now their credit score may have mended well enough to get a new mortgage loan. This group is experienced and likely knows just what they want. If your home is similar to what they had and lost, you may be getting an offer.
Additionally, the Baby Boomers’ kids are now first-time buyers and are more informed than any buyers in history, thanks to the Internet. Whole new markets are emerging and gleaning information from a plethora of RE websites. This, in turn, has generated an eager bunch of buyers with relatively little available from which to choose. We have a wonderful mobile app that is an invaluable tool for this purpose. Here’s the link to be used from your smart phone: A5/invesdoor_team/2E
Thus, without an infusion of new inventory very soon, we will experience what the cherry blossoms have had this winter. That was an early bloom which could bring us a rather colorless spring….but probably not.
Lastly, many who were teetering from an “under water” equity position, will enjoy a strong increase in equity this year. Prices are going up again and this will as a great relief to those who suffered from the great housing market crash a few years ago.
C.J. Lauria is a Real Estate Investor since 1988. He is also a Realtor, Author, Speaker, Educator and Director of Invesdoor® Real Estate in El Dorado Hills, CA.