April Numbers
The April numbers are in and a couple of observations. The news has published the information about the increasing number of sales but there is also more inventory being brought to the market. Inventories in some areas are reaching their Q1 09 peaks. In East Bellevue it is almost up to that point now with over 270 homes listed. The big question over the next couple of months is if the pending sales which are seeing dramatic increases will sustain that trend to absorb this new inventory. Many sellers that had been withholding product seem to have seen the sales in their neighborhood and appear to be brining their homes on the market. The other trend is that per sq. ft. prices in some Eastside markets look to be inching up. The big deal in my mind was that while the inventories had been declining and sales volumes were headed higher pricing seemed to be stuck. The per sq. ft. prices have been flat and they still are in King County but in some of the Eastside areas you can see that they are starting to trend up. In order to sustain this trend up sales volumes need to see their present levels.
The character of the market is changing. Overall distressed inventory is a smaller portion of the market with short sales now taking center stage as the form of distressed inventory with the most opportunity. Many lenders such as Bank of America appear to be putting more resources into short sales since they can dispose of the properties with out having to take possession. However as the distressed inventory works its way through the system there will be fewer distressed sellers overall and prices will start to firm up but there is also a back log of sellers who have withheld their homes from the market for the last two years and that inventory will also be coming available over the next year. The good news for the buyer is that this inventory being brought to the market will be better maintained and it will be easier to come to terms with the seller. The low interest rates appear to be around for the immediate future due to the overall economic weakness. However the day of sending in excessively low offers appears to be coming to an end for two reasons. The first is that sellers are pricing more realistically. Last spring when the market declining finding the right price was a matter of sending in offers and finding the most motivated seller. In this market sellers are pricing closer to the market since there has been a closed sales which show a trend. The second factor is that for the nicer inventory there is a lot more competition as more buyers are entering the market due to the stabilizing economy and the low interest rates.
In the next week in this Blog I will discuss the best strategies for both sellers and buyers. Bottom line is that sellers still are swimming upstream the next couple of years but the current is not quite as swift. For the buyers it will be finding the swirls and eddies in that stream to find where the best values pooling.