Well, it isn't exactly 2005 again, and I sincerely hope it doesn't become that. However, the market has, over the past year and change, gotten beyond red hot for sellers! In fact, almost anything in any price point, with the possible exception of the super expensive ($10,000,000 and over--some would say over $5 mill) is, assuming it's priced properly and habitable, disappearing almost as quickly as it hits the market! We are seeing multiple offers again, just as we did before the bubble burst a few years ago. What we don't appear to be seeing from that previous insane market is no-doc loans and securitization of loans that helped drive the run-up which preceded the collapse in 2007.
So, you ask, what is driving this hot market this time around? Well, it is a combination of things--two things, to be more precise. continued near record low interest rates and a severe shortage of inventory to sell at almost all value levels. Now the first you should be aware of because I have been talking and writing about this situation for almost a year now. While rates are not setting new record lows on a weekly basis as they did for a time last year, they still continue at near record lows, with loans available in the three's and low four's for 30 year fixed money, and below 3% for adjustable loans. They have gone up a little bit since last year, but the Fed does seem to be succeeding in its plan to hold rates down through 2014.
However, the other issue--lack of inventory--is what's really driving this market even further upward. Although the trend of fewer listings actually began in a meaningful way in 2010, with March 2010 listings totalling 1244, followed by March 2011's 1082, it really plummeted last year. March of 2012 showed listings down by over 47%, at 573. As bad as that drop was, it continued into the first quarter of this year. Current listings are at 358, a further 37.52% drop from a year ago.
Now, when the economy is doing poorly and fewer folks are financially in a position to buy a house, this may not be such a big thing. But here we have a recovering economy, more people working and, yes, those low interest rates, and relatively speaking, little or no inventory to show them. So, what happens? Just like any other supply and demand situation, prices start to climb!
Now, will this lack of product ease, and, if so, when? I have no definite idea. I am talking with clients about listing their homes, and, have, in fact, added a couple of homes for the market later this spring and summer. Other agents I talk with are making noises about 'maybe' bringing such and such home, or homes, to market "later this year". But no-one seems to say with any conviction that there will be such and such home listed at such and such time, or that the overall supply will turn upward in any meaningful way by a specific date.
So, this brings up the question, if you are trying to decide on selling, "what do I do?" Well, with circumstances as I have noted above, if your house is ready to sell, or can be made ready to go in a short period of time, and if you are willing to live, if it becomes necessary, in a rental for a number of months, then I would strongly recommend that you get the house on the market NOW (or as soon is reasonably practicable).
Not sure of value or what it may need to prepare for market or how to go about readying it? Call us! We've been doing this here in Marin for a long time (collective experience over 40 years), and we know what works! We'd be happy to assist. Peter: (415) 279-6466; Jane: (415) 531-4091. Do it now!