Economy
Related: About this forumShrinking supply of homes for sale has upended market dynamics
WASHINGTON Though many home shoppers who assume they are still in a buyer's market find it hard to believe, one of the sobering fundamentals shaping real estate this summer is shrinking inventory: The supply of houses for sale has fallen significantly in most areas compared with a year earlier, sometimes dramatically so. And that is having important side effects by raising prices and homeowners' equity stakes and reducing total sales.
In major metropolitan markets from the mid-Atlantic to the West Coast, the stock of homes listed for purchase has dropped by sometimes extraordinary amounts 50% or more below year-earlier levels in several areas of California, according to industry studies.
In Los Angeles, available inventory is 49% lower than it was last summer, San Diego by 53%, reports Redfin, a national online realty brokerage. In Seattle, listings are off 41%. In Washington and its nearby suburbs, listings are down 28%.
http://www.latimes.com/business/realestate/la-fi-harney-20120729,0,308220.story
Coexist
(24,542 posts)and says there are tons of foreclosed homes out there - but the banks aren't releasing them.
Her theory is that banks show a $$ amount in inventory - if the homes are sold for less than their value, as stated by the banks, their inventory $$ will be seen to be inflated.
So they release them very slowly to drive up demand and make their balance sheets seem to work.
enlightenment
(8,830 posts)A friend has been trying to purchase a home (we're in one of the top foreclosure cities in the US). He says there are many homes in his price range, but either the banks are holding them or the speculators are bidding $10,000 to $25,000 more than the listed price, which of course means the average buyer looking for a home to live in is going to lose out because the banks want that extra money and don't care where it comes from.
The speculator business is what drove the bubble - at least where I live - it is very sad to see the same situation repeating. Don't we ever learn anything?
Coexist
(24,542 posts)people who want the homes to live in, are having 'bidding wars' on whats released. How are memories so short?
I realize the low interest rates are appealing, but people need to realize speculation and low inventory does not "value" make.
enlightenment
(8,830 posts)There are people who are trying to get on the property ladder for the first time who are being easily out-bid by speculators. It's more like one of those duck shoots at a carnival - the first-time potential buyer doesn't stand a chance.
The idea of owning a home is deeply ingrained in the American psyche; perhaps too much, but that's another issue. What matters is that the artificially inflated bubble burst and there are people out there who are able to afford the homes that are being listed (more or less - it's very hard to tell if something is actually available these days) at the lower prices, but are being out-bid in a heartbeat by people who have no interest in the property as a HOME - they are only interested in it as an investment.
Personally, I think there should be some sort of regulation in place that prioritizes the offers of people who plan on actually living in the houses.
CrispyQ
(36,234 posts)He says he & his family keep expecting the sheriff to knock on their door, but it still hasn't happened.
bemildred
(90,061 posts)So it's to be expected that banks or people will hold on until they can sell for what they like, when they can.
What's interesting is there seems to be some demand.
Coexist
(24,542 posts)so.. its almost artificial.
bemildred
(90,061 posts)But so what, it makes it a great time to buy, if you want to buy.