Is It Good or Bad That There is More Housing Inventory?
- Is it good or bad that there is more inventory?
- Depends on which side of the sign you are on. The FOR SALE sign, that is. If you are selling; bad. If you are buying; not good, great! It comes down to basic economics. The more supply that you have, the less demand there is for a product, and therefore, less price. We are in the midst of this phenomenon currently in the housing arena. All over the country there are neighborhoods that are devaluing. If it hasn’t hit your neighborhood, believe me, it’s coming.
- We will see more devaluing due to increased inventories because of the foreclosure situation we find ourselves in today. See my blog entry on Nov 21, 2009, titled “Why is the real estate market down?” Banks have been sitting on their Real Estate Owned (REOs) inventories until the start of the year. Call it, padding or softening the books for year’s end. Call it whatever you like, they did it. You might recall a few months back when a couple of banks, out of the kindness of their hearts, made the announcement that they will be putting the foreclosures on hold through the holidays. They made it sound as if they were doing it to help people out during the holidays, so as not to kick anyone out of their homes before Santa got there. In fact, the less foreclosures that showed up on their books toward the end of the year, the better. It did help people stay in their homes, sadly, it only delayed the inevitable.
- Inventories are a key element of the housing economy, if not the key to the housing economy. In a free market society this is what dictates what something, indeed, anything, sells for. And that includes houses. I am starting to sound as obvious as John Madden, “the more you score, the better chance you have to win… BOOM!” But, seriously, this is not rocket science. Prices are down and, in some areas, continue to drop. The lower prices create more demand, and as that demand increases, supplies drop and price has catch up to meet demand. It is fundamental.
- So, which side of the FOR SALE sign are you on? If you are on the selling side, get creative, get savvy, get aggressive and sell. If you are on the buying side, yee-haw! If you are buying, get creative, get savvy and BUY! When else are you going to see a market like this again? Interest rates are amazing, prices are amazing, and the sky is the limit when it comes to which house to choose. With the inventories we are dealing with, you have the pick of the litter.
- Referring website; http: //www.coloradohomesalesonline.com/
- Investing in the real estate market has risks and is not for everyone. I am, by no means, suggesting this is for you. I am a trained professional, I do this for a living. If you would like more information regarding real estate investment, just let me know. You can also consult your accountant, attorney, Priest, Pastor, or Rabbi about the risks involved in investing. I am, however, available to answer your real estate related questions.
