We went from a undersupply low of 6,000 Valley listings in Spring of 2005 to a history-making  oversupply high  in 2007 of  +58,000 Valley homes available for sale.   Currently there is an oversupply of listings in all price ranges and all locales.   While some properties are selling quickly, most are staying “active” for a number of months.   Prices have continued to drop from their August 2005 high. 

In addition to the lopsided surplus of available properties, there are unique Lender issues.  During the last years of the up-cycle, Lenders made numerous 100% and / or interest only loans, plus financed sales for Buyers who were only marginally qualified to purchase.  A  number of home-owners re-financed and pulled their home-equity dollars out.  These various loans were packaged for investors into the secondary financial markets.  So, the current situation is one of normal market direction change PLUS abnormal numbers of foreclosures and short-sales as many of these loans are now higher than current property values.  The Lenders haven’t figured out how to deal with the problems they helped create, and this is impacting the availability of new financing and contributing to a slowdown of residential re-sale purchases.

Today, prices are also being dramatically impacted by Lender-owned properties.  These are past the “short-sale” stage –  these are properties that have gone through the foreclosure process, wiping out one or more “second” loans, and the first Trust Deed Lender is listing at a price to recoup their first position loan plus costs.  This list price is usually substantially lower than the market climate price in place when the properties were purchased.  As the number of these properties increases, list price “reductions” by Seller-owners take place to be in harmony with these new “comparable sales” for appraisal purposes.  Nasty stuff for Sellers!!!   Bargains for Buyers!!!

Bottom line:  the intense competition-climate that previously favored Sellers now favors Buyers to the extreme.   Most properties are selling  94- 99% of their final list price.   

And the good news is, homes are selling!  If you are a Buyer, the market climate today is providing a wonderful window of opportunity to enter the market for long-term investment holdings or to purchase your dream home.   Whether you are a Buyer or Seller, I look forward to helping you achieve your real estate goals!