We're getting more proof that as foreclosures go, so goes the real estate market. The number of foreclosed upon residences has taken a drop around the nation over the past few months. Fewer properties are offered up for short sale. Presto! These factors have combined to reduce the inventory of available homes in the majority of areas.
The investors who were able to take advantage of the low prices and wait for the market to turn can now begin to list and expect to begin profiting. Less inventory means that home prices can increase, and that's what is happening.
Even in the Sarasota FL area, there are fresh signs of progress, and that has been one of the nation's most depressed real estate markets in recent years. Even Sarasota County had no problem allowing about 400 trees to be (legally, as far as we know) removed in order for construction to begin next week on a 24 acre development, "Pacifico". What makes this even more significant is that the builder had actually purchased the 77-acre site back in 2005. Wisely, they waited before constructing, or it likely would have been a financial disaster. Now, they have the confidence to build. The Sarasota Association of Realtors reported the most property sales (for 2012) since, you guessed it, 2005.
Before you think this is because of people from the north relocating to Florida and looking for a ripe area, look again. This trend is popping up in several less likely locations.
In Wisconsin, the WI Association of Realtors just reported a 21% jump in closed sales for 2012, compared with 2011. The Indianapolis IN Association of Realtors reported that its 13 county metro showed a larger sales increase than the remainder of the state of Indiana did. Obviously, people are not moving to or within these areas because of the weather and/or retirement conditions. Snohomish County in Washington showed its biggest sales increase since 2007.
Of course, I'm always the first to point out that most buyers are not buying because of recent statistics. Now, many of these sales (everywhere) are a result of people getting great prices on foreclosures and short sales. Prices had been driven so low that too many people are over-reacting to the increases in median home prices.
While these latest statistics are encouraging to some, it's really too early to tell. We don't know what percentage of these recent buyers are looking to flip their properties and now will stop buying more because there are not as many "steals" out there.
We're still a long long way from the days of offers before the For Sale sign goes up. The "serious" sellers will still need to do a lot more to market and distinguish their properties. Hopefully that area (advertising & marketing) will improve, too. It's time!
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