Market Update

As I read numerous reports weekly and talk with so many people about their perspective on the market, what strikes me is how much emotions play on our perception. Most sellers are panicking because of news that reports the infamous “bubble burst,” causing them to lower the price on their homes to invite an offer. “In normal markets, inventories and sales increase in the summer and decline in the winter. This has not happened in our market for the last five years,” said Michael Lyon, President of Trendgraphix. “Then with the rapid rise of prices, the market eventually ran out of purchasing power. The result? Inventory has been rising for the past six months. Buyers have responded by taking a step back to evaluate their options while sellers who needed to sell found themselves lowering their asking price to attract an offer.” “December, however, was a step closer to normal with declining inventory and slower sales. This is normal for most markets that don’t have inventory shortages. The question for the spring remains: with strong job growth in our region, will we continue to see a trend towards normal market patterns? This would lead to a steady increase in sales along with a peaking inventory by early summer. The experts say “yes”, but make an exception for the upper end market which has been overbuilt and may take years to recover.”

I like how another commentator put it, “Keep in mind we are discussing a changing real estate market, and not talking about a real estate bubble; we are discussing a shift in sentiment of consumers.”

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