Low Inventory Levels Help Sellers, Increase Prices

April 25, 2014 Posted by Andre Hemmersbach

Inventory levels of homes for sale in the Greater South Bay area are still at extremely low levels (see chart). Basic economic principals state that as supply dwindles prices will increase and will continue higher until buyers refuse to buy at the elevated levels and then supply increases and prices drop.

Property Inventory vs Sales Price

Greater South Bay Inventory vs Median Sales Price

Because foreclosures are currently at seven year lows, inventory during the spring and summer selling season is only expected to increase slightly.  As more buyers enter into an already saturated market, prices will most likely continue to increase. Some properties are selling within 3 days of being listed and typically at higher than the listed price. “Days On The Market” is a measure of how many days a property is for sale before going under contract (into escrow) and is a great indicator of how “hot” the real estate market is (See Chart). The less time it takes to sell the average property indicates a “Sellers’ Market” versus taking a long time to sell a property a “Buyers’ Market”

Tired of losing out to other offers? Call me to discuss a strategy to have your next offer look more competitive!

 

Days On The Market VS Median Sales Price

Greater South Bay Days on the Mkt vs Median Sales Price

 

About Andre Hemmersbach

Andre Hemmersbach has been working in the mortgage banking business for over 30 year helping people successfully finance their real estate holdings. He can be reached at (310) 540-1330 #137.

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