- Jun 13, 2005
Smiling JOe said:Another poster and I have been exchanging some data on sales, prices, etc.. The thing that stands out so much is that, on avg, the properties which are selling are still increasing in value over time. Few are selling, but as Highbidder says, some sellers really like their property.
What's your take on a market where there are fewer homes selling but the median price is increasing.
The way that I see it is that a very large chunk of buyers are out of the market. That "buyers chunk" is made up of four types of people:
(1) People looking for affordable housing
(2) Middle-class folks priced out of the market
(4) Low- to middle-priced condo buyers
That means it takes only a few sales of the very upper-end, high-cost properties to sell (raising the median price) and the over-priced middle-to-lower end properties are sitting, and sitting, and sitting (inventories rising).
The folks who "don't intend" to sell their properties are putting them out there, and can afford to continue to pay carrying costs, but I bet they're more than a bit disappointed that they're not selling and would much rather have them out of their portfolio. My guess is that when they come to the reality that carry costs are eating away at what could be profits and the investment is no longer "making (on paper that is) double-digit returns," they'll want to move these babies along and price them to move. (Which would be good news for realtors and the folks who service them.)
What do you see happening over the next several months that will send mobs back into the street snapping up all the excess properties at/above current listing price as in days of yore? You strike me as a pragmatic kind of guy--I'm guessing you know that isn't going to happen.