I’m a very optimistic individual who daily checks his mindset to make sure it’s focusing on the good however, I’m a realist. Being up to my ears in the real estate world and knowing what I know…I am concerned. While there are some encouraging signs I believe we are far from being on the other side. Looking at massive amounts of housing inventory in the Central VA MLS vs. the average monthly sells…this is a concern. On average, in the Central VA MLS, there are fourteen thousand homes for sale with roughly only a thousand selling per month. Currently there is a thirteen plus month supply of housing inventory in the CVRMLS. This, going into the 4th quarter…which historically, in any market, is a slower time for home sales. I might not be the brightest but come on…bank foreclosures, REO’s and short sales are still on the rise and the lending instutes are still inudated with “short sale” request. Hmmm.
Being a realist I am concerned because interest rates are the lowest they have been in 50 years and still the housing inventory, as a whole, is tremendous. I think the spring of 2011 is going to be REAL interesting for the real estate world. I hope for the best but I don’t want to be mislead by having “hope over reality.” I think the builders mood in the Business Section of USA Today states it best.
U.S. home builders’ confidence in the housing market stayed this month at the lowest level in 18 months, and more worry that the traffic of potential buyers is falling. The National Association of Home Builders said Monday that its monthly index of builders’ sentiment was unchanged in September at 13. The index has now been at the lowest level since March 2009 for two consecutive months. Readings below 50 indicate negative sentiment about the market. The last time the index was above 50 was in April 2006. The index is broken into three separate readings. Foot traffic from prospective buyers, an indication of future sales, fell slightly. The index measuring expectations for the next six months was unchanged. Current sales conditions were also unchanged.
I reflect back to when I was younger and hearing my mom say, “Wes, don’t be like the ostrich who puts his head in the ground.” Just out of curiosity I Googled “define Ostrich” and surprisingly or I should say not surprising the first sentence “a person who refuses to face reality or recognize the truth (a reference to the popular notion that the ostrich hides from danger by burying its head in the sand). Interesting.
For the homeowner who is thinking of selling their home or has their home on the market…be smart…don’t let this create false realities. Today’s headlines does not mean that home values have magically jumped back to where they were in 2005. Price your home to sell.