Quote:
Originally Posted by kevman
One thing my simple supply and demand based mind can't figure out is why inventory is so low. If we are truly headed for lower prices shouldn't there be an abundance of inventory? I know in the areas I monitor there is very little for sale. When it takes months at a time for new homes to come on the market people are a little more aggressive when it comes to making a move. The homes that are actually selling seem to sell in days and not months.
So why is inventory so low?
The bear in me thinks that there might be an unusually high number of homeowners that bought in the last few years that are underwater. These homeowners would need to pay to sell their home scaring them away from listing them.
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You piqued my interest about this component and I had a more detailed look. On Mike F's website you can see the recent sales and what they were originally purchased for in the last seven years.
The most recent sample of ~100 SFH sales (in the last few days) show that almost exactly half of them lost money when they sold, net after standard realtor fees. That does not even include any kind of mortgage interest, property taxes, moving costs, repairs, etc. over time. Heck, that doesn't even include properties that had sunk costs for renovations over the last 7 years for a potential uptick in value.
Average loss was more than $50,000 - a bit painful for just a few years.