Why is it difficult for a well qualified buyer to find a home in todays real estate market? The answer is lack of inventory. Public policy has controlled the amount of home’s to hit the market. The idea is not to fload the market all at once with all of the foreclosures currently on the banks books. Therefore artificially controlling supply and demand.
The policy has definately worked in stablizing prices. But what is to be done with all these homes that they have been kept on the sidelines? According the National Association of Realtors, about 2.4 million poperties are considered part of the “shadow inventory”. These are homes that are REO’s or in foreclosure or nearing foreclosure. Not counted are those homes that are going through the loan modification process(likely to fail), are delinquent on payments, or trying to sell their home by short sale. Some say the “real” number of the shadow inventory could be closer to 7 million homes.
Considering this overwhelming inventory that needs to be cleared out, why are there buyers that can’t find a house? It is not uncommon to have double-digit offers on a well priced home. I have many clients that are completely frustrated with the process. They want to take advantage of the incredible interest rates and favorable prices. But there are just not enough homes to choose from. I understand the need to not dump all the foreclosures on the market at one time. But there needs to be better control over the inventory. Real estate is very local. You can’t have the same policy for distributing or realising foreclosures in Southern California as you do in Boise, Idaho. The real estate market is not going to “recover” until this inventory is cleared out. So why not base public policy on supply and demand in a more localized way?
Posted In HomeTalk News
This entry was posted on Thursday, September 2nd, 2010 at 12:07 pm and is filed under HomeTalk News. You can follow any responses to this entry through the RSS 2.0 feed. You can skip to the end and leave a response. Pinging is currently not allowed.