Today there are only 23 single family homes for sale in Pleasant Hill. An average of 26 homes has sold each month this year. This is less than one month of inventory.
A buyer’s market is defined as a market with over three months of inventory and a seller’s market is less than three months inventory.
By this definition we’ve entered into a strong seller’s market. This is an artificial and most likely temporary seller's market.
The robo signing scandal, home loan modifications and heavy pressure on the banks to delay foreclosing on homes has cut the numbers of distress sales to a very low level. Combine that with people that’d like to sell their homes and move but can’t because they are trapped by an underwater mortgage and you have fewer homes coming on the market.
This doesn’t mean that prices are leaping back up. Pleasant Hill real estate values are trending up but very slowly. Buyers are fighting over each other for the few homes on the market that represent a good value but they are ignoring any homes that are overpriced.
Tighter lending and appraisal standards are also bringing many buyers back to reality when they discover the bank won’t lend as much money as they are willing to pay.
I believe that we are going to continue this trend until the next presidential election. Politicians are doing everything in their power to suppress foreclosure inventory and encourage buyers. (Interest rates have dropped again to 3.83 percent for a 30-year fixed.)
I think that once the elections are over the banks will dust off their foreclosure machines and inventory will increase further depressing real estate values.
Any analysis of the housing market has to include the stark reality that we are less than halfway through the housing crisis. We’ve had about 4 million foreclosures nationwide since 2007. Most experts concede that 5 million other homes across the country will most likely end up as foreclosures. The housing market will never recover until all these delinquent loans are disposed of. This is turning into a disaster set in slow motion.
So what does this mean to you? If you’re a potential seller and have been sitting on the sidelines hoping for a change in the market I would recommend that you sell this year before the upcoming presidential elections.
If you’re a buyer get ready for some stiff competition if you want to buy this summer. I’ve been telling all my buyers to pay attention and be ready to write offers on homes that meet their criteria but keep in mind that right now may not be the best time to buy a home. Personally I think that next winter and spring will have much more favorable conditions for most buyers.