This is the number one question I get from buyers today…it is Spring/almost Summer, so why are there not more listings available? While I have blogged about this topic several times before, I thought I would discuss the main reason I believe we are not seeing more inventory in many areas right now, including here in San Diego and North San Diego.
There are many potential sellers out there – those who want to move up, downsize, change neighborhoods or move out of area. I know because I have spoken with people who have in the back of their minds that they can move and would like to, but for one reason: there is no inventory. This sounds like a cyclical argument, and it is, so let’s break it down to understand what is happening in many markets.
Sellers are typically not just sellers, they are buyers as well. When they sell their home, they most often need to purchase another replacement property. If the sellers live in an area where inventory is low, they know that while their home may sell quickly, they may have a hard time finding a home to purchase. Rather than step out into the deep unknown – facing the prospect of renting (which is also a difficult market in which to find a property) and moving twice, many sellers decide to just wait it out.
Despite the fact that historically speaking, it is never the best time to BOTH buy and sell, it is easy to see how the above viewpoint, which is completely understandable in today’s market, coupled with buyer competition, might make sellers wait to put out a For Sale sign.
The demand for homes in many areas is still high, and there are buyers waiting for properties to come onto the market, many who understand the need to be aggressive and jump high in order to beat out other interested parties (a topic for another blog). If the demand continues sellers may realize that taking a risk could be positive. If the sellers wait too long they may price themselves out of the market; in other words, if demand remains stable or grows, prices will likewise remain stable or rise. While this is great news for potential sellers, if they are going to be purchasers as well it could mean higher prices on that end.
The bottom line is that sellers need to feel comfortable that they will be able to purchase a home once their home has sold (if that is the plan). They need to do their research and be ready to make an offer when a home meeting their criteria comes up – all the more reason to list their homes now as we head into Summer. If flexibility is an option then it is a good idea to line up a back-up plan, such as a month to month or even weekly rental while the sellers/buyers find a home and close escrow. There are apartments that do rent on a weekly basis, and are available furnished, so that the sellers/buyers would not have to move twice.
Before jumping into the selling market, make sure to have a plan and discuss it with your real estate agent. If you align all the pieces correctly you can sell your home and find a new one in a difficult buyers’ market.