[quote=desmond]How about some of the experts on this site come up with the reasons there is no inventory. I have heard for years that people would sell when home prices go back up, yet there is no inventory?[/quote]
OK, desmond, I’ll take the bait ;=]
I’ve stated this before here, but I’ll reiterate with a slightly different slant …
I don’t think “people” (longtime owners of prime properties in the best hands) are necessarily looking for 2005-2006 to repeat itself. They are more concerned with putting their well-maintained properties on the market (that they may have many thousands of dollars of “sweat equity” invested in over the years) at 1999 to 2002 prices in order to even get any offers! Most youngish buyers today not only want everything “perfect” but if they have school-age children, the schools in seller’s attendance area must be “top notch” as well. If there are anything this buyer pool perceives as “flaws” in seller’s property even if it isn’t really a “flaw” (such as a T-lock shingle roof in those areas where they are common), they are believed to just want to “lowball” even a circa 2002 asking price!
I think “equity-sellers” would list if they didn’t think it would be a waste of time in that they believe they would only get offers reflecting their property’s value 10-15 years ago. 1999-2002 was long before routine “loose lending” led to the millenium boom and subsequent crash, yet many areas’ recent sales prices seem to have “over-corrected” to this era, mainly due to lazy (and ignorant, obviously out-of-area) lenders have been foregoing so much debt of late to consummate a short sale that they allowed their deadbeat homedebtors to sell at prices well under the current market.
The current sentiment out there among “would-be sellers” is that the vast majority of current buyers (with families) only want a deeply discounted bargain, preferably with as low a PPSF as possible. This seems to be THE most important buying consideration (even if the buyers don’t really need it, won’t be able to use it and can’t afford to furnish it)! They want this so much that they are often VERY flexible on zip code and area, even at the expense of greatly increasing their daily commute! Thus, they end up migrating to areas with heavy distress (where larger homes were built during the millenium boom and originally “creatively financed”) where they can find a multitude of distressed sellers to sell to them at a deep discount (w/their lender(s) permission, of course). However, it’s only a “deep discount” of millenium boom pricing (which was grossly inflated due to loose lending practices) so is not really “discounted” but listed at what it SHOULD have sold for in the first place. The “perception” of a “deep discount” in distressed areas is there among buyers, however.
All along, these buyers could have considered an older property in a GREAT low-or-no-distress location with a motivated seller who would have been willing to sell at 2003 pricing but however well-located and convenient it might be, alas, it is probably too “flawed” for the above reasons.
So the longtime “equity owners” just keep their properties off the market (even rent them out if need be) to await a time where all the “perceived deep discounts” are gone. Until there is again a preponderance of “equity” or “traditional” listings over “distressed” listings (my guess is 80% (equity)/20% distressed or better), these “potential sellers” will not list. They have these choices because they have been “prudent” and played by the rules over the years or own free and clear.
