There are a tremendous amount of homes for sale right now –double the inventory we saw in 2005. It is also taking much longer for a home to sell – on average, 3-4 times as long. Any market is a function of supply and demand. Right now, the supply far outweighs the demand.
However, it is a terrific time to be a buyer! There are lots of homes on the market to choose from. Sellers are more likely to negotiate a lower price. Sellers are also more likely to accept less-favorable terms right now. There is no pressure on the buyer to make a snap decision – with more homes on the market there are in effect fewer buyers competing for them. Best of all – interest rates are incredibly low!
For homeowners who were moving up or down, the trend had been to find the next home before putting theirs on the market; people were afraid that they would have no place to go when their home sold. Now, those who are both buyers and sellers need to get their home sold before buying the next one, or risk owning two homes. The pace that homes are selling at has changed dramatically. Buyers are taking much longer to wade through the inventory and are taking their time in making a decision to purchase. Sellers can in turn anticipate a much longer time on the market. A while ago , a home would sell, on average, in several weeks and then close in 30-60 days – a total of 2-3 months from the time it came on the market until it closed. Currently, a home will take 3-4 months to sell and then another 2-3 months to close – a total of 6 months time.
Flipping homes for a quick profit is a thing of the past for the moment. But if you are in need of a home, buy one. Real estate, over time, is always a good investment.