Speaker,
Your comments are more than a bit smarmy and you seem a bit uniformed as to how to interpret real estate stats so here’s a primer. A decrease in inventory by 9 doesn’t mean 9 homes have sold since Halloween, it means there are 9 less homes for sale now than before. Hundreds of homes have sold since Halloween. The homes on the market now are not the same that were on in Fall in most cases. With 521 active listings and 168 pending listings, we have a 3 MONTH supply. By definition, a buyer’s market is a 6 month supply. In the MLS there are 10,660 active single family home listings and 3769 pending listings as we speak.. Also about 3 months. These are real live numbers! Are we in a soft market? absolutely! But with 3 months inventory a dramatic “hard and fast” crash just doesnt seem likely to me.
As for prices equating to rents, that ignores alot of the benefits of home ownership. I can paint my house any color I want, I can plant what I want in my yard, my children feel safe and secure in their home and it is a large part of their identity and the secure feeling they hold in their hearts. When you rent you own nothing. When you own, you get to experience the pride of ownership. None of this justifies paying double to triple what you could rent something for, but it certainly justifies paying considerably more than rent. There’s also the tremendous tax deduction I get each year which makes my $3000 PITI (mortgage payment, taxes and insurance) feel like $1800 in rent. I could go on and on but I think you get the point.
As for why it goes up faster and down slower…the answer is EMOTIONS! Emotional buyer’s chasing their dream of homeownership will raise the bid quickly because “it’s just a few more bucks each month”. Emotional seller’s will resist taking less because “I love my home”, “my house is worth as much as the one across the street that sold last Fall” and “It’s my chance for a big payoff and every $10,000 less I take comes out of my payday in 30 days!”
Emotions working in opposite directions make prices rise much faster
