Tag Archives: real estate listings

The Listing Drought

Unknown-1It’s tempting to look at how low the number of active listings has fallen at the moment and chalk it up to being a normal part of the seasonal ebb and flow of the real estate market.

It’s an easy excuse since historically, there are almost always fewer listings at this time of year than in the spring and summer. No one likes putting their place on the market during the holidays if they can help it.  And surely there must be plenty of Sellers out there getting ready to put new listings on the market in the coming months.

Except of course, we pretty much said the same thing last year.  And the two years before that.  And somehow all those great new listings we assumed would be coming, haven’t quite materialized to the degree we hoped they would.  As most prospective Buyers will attest, there have been a paltry few but not nearly enough.

Since we emerged from the depths of the distress market in 2011, when short sales and REOs artificially swelled the supply and comprised almost 30-40% of  total closed transactions,  the sheer lack of available inventory has become the single most dominant factor driving our marketplace.  Significant lack of supply has become a year round condition rather than a seasonal fluctuation.

In 2010-11, everyone was worried about the Shadow Inventory. That was the euphemism given to a huge secret stash of foreclosed homes that people figured all those big nasty banks must be purposely holding off the market.  They were fearful that if all that pent-up supply was somehow released into the marketplace, prices would plunge even lower than the 40% drop they had already experienced.

But ironically instead of torrents of Shadow Inventory flooding the market, we somehow have found ourselves going through an unprecedented  3 year drought marked by relatively few new listings.  One that has pushed prices up dramatically while it has also been shaking up some of the long held beliefs about the market we always thought we could rely on.

Take a moment to consider that this is the fewest number of homes that Santa Cruz has had for sale in November/December in more than 18years.  Add to that the fact that for 44 of the last 45 months, the number of listings has been lower than it was in the same month the previous year. And from my perspective, there is little on the horizon to suggest that real estate in 2015 is likely to be much different than it has been these past few years.

So it begs the question:  Is there something larger afoot in all of this? A fundamental shift in real estate and how we view the nature of homeownership?  To be continued…

All Filler – No Killer?

CrunchyTacoWhat was that tag line we used to see on posters promoting Rasta bands at the Catalyst in the old days?   All Killer – No Filler?

Wouldn’t it be nice if we could channel more of that sentiment (and mojo) into the real estate inventory right now?  Seems like no matter how many times a day you and I (and I ) go onto the MLS to check for new listings or download our search engine results…nothing much new “of value” comes on. Just the same old same old.

Tired inventory.  Picked-over inventory.  Stale-inventory.  A warmed-over re-hash of stuff that didn’t sell last year.  A strange menagerie of distress properties.  Dubious short sales you can never be sure of.  A smattering of REOs the banks are still pinching out of their systems…starting with the worst first.

The sum total?  An uninspiring catalogue of choices.  Most of which aren’t qualified enough to move anyone anywhere.  As in: Move buyers in. And move sellers out.

I guess we could say it’s mostly Filler…Very Little Killer in real estate right now.  Not many killer views, killer yards, killer locations.  Lowering our expectations even more… there aren’t even many plain old, modest, middle of the road, houses packaged in nice presentations at reasonable price points.  Specially right in the sweet spot zone between $600k and $800k.

I don’t know about you…but it’s killin’ me.

Most Agents out there understand.  They’ve got clients calling. Buyers ready to buy.  Buyers becoming increasingly frustrated with a market that doesn’t seem to offer anything that fits their needs or price range.

And by extension, Buyers frustrated with their own Agents, who become more and more suspect each week they fail to uncover that special hidden gem that’s waiting out there. Somewhere.

It isn’t a Perfect Buyers Market anymore.  But it still could be a good one.  Interest rates are still remarkably low.  And prices are still well below the peak (remember – the Median Price almost hit $800k back in the boom days).  The median is in the low $600,000s now.

What’s missing?   Great places that people actually want to buy.  I think some people call it supply.  Or maybe “effective” supply would be a better term.

I keep having the same deja-vu experience.  Clients who’ve been looking forever, pouring over on-line pictures of homes for sale, who keep calling and asking to see places they forgot they already saw a year ago.

Houses that didn’t work then and aren’t going to work after another 365 days on market and a minimal price reduction.   I call this  “Deja Viewing”. Stare at the MLS long enough and homes start repeating themselves over and over.

So when’s this slow tortuous drip of new properties coming on going to end?  When do the floodgates open? I feel like a kid staring at the classroom clock.  Waiting for recess from a hard lesson. The minute hand isn’t moving. The fabric of time is frozen.

Groundhog Day comes tomorrow – February 2nd.  Will another shadow appear?  Will we have another six weeks of wintry inventory?   Will there be a foreshadowing of a huge shadow inventory we’ll see relatively soon?  Or will there be the shadowy logic of would-be sellers still planning to hold back putting their places on the market, for as long as they can?

Either way, looks like the winter of our buyers’ discontent (vis-à-vis the market’s lack of content)  might run through to the spring.  Hopefully not the summer and fall too – like it did for all of 2013.

Hopefully the shadow will be banished for good by February 2015.  We can’t keep kicking the groundhog down the road forever.

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The Shadow Knows

What was that tag line  we used to see on posters promoting Rasta bands at the Catalyst way back when?   All Killer – No Filler?

Wouldn’t it be nice if we could channel a little more of that sentiment (and mojo) into the real estate inventory these days.  Seems like no matter how many times a day you and I and I go onto the MLS to check for new listings or download search engine e mails…nothing much new “of value” comes on. Just the same old same old.

Tired inventory.  Picked-over inventory.  Stale-inventory.  A warmed-over re-hash of all the stuff that didn’t sell last year.  Including a strange menagerie of distress properties.  Dubious short sales you can never be sure of and a smattering of REOs banks are pinching out of their systems…starting with the worst first.

The sum total?  An uninspiring catalogue of places.  Most of which aren’t qualified enough to move anyone anywhere.  As in: Move buyers in. And move sellers out.

(Quick disclaimer:  Individual Sellers, don’t get bent out of shape here. I’m talking about everyone else’s listing except yours.)

I guess we could say it’s All Filler…Very Little Killer in real estate land right now.  Not many killer views, killer yards, killer locations.   Or to lower our epxectations just a little… not many plain old, modest, middle of the road killer houses packaged up in nice presentations at reasonable price points. Specially right there in the sweet spot between $600k and $800k.  I don’t know about you…but it’s killin’ me.

Most Agents understand.  They’ve got clients calling too. Buyers ready to buy.  Or who think they are.  Buyers becoming increasingly frustrated with a market that doesn’t seem to offer anything up that fits their needs or price range.  And by extension, Buyers frustrated with their own Agents, who become more suspect each week when they fail to turn over enough rocks or the “right” rocks to uncover that special hidden gem waiting out there. Somewhere.

The same Buyers who don’t understand why it is so hard to buy in  (what keeps getting sledge-hammered into our heads as) the Perfect Buyers Market.  Is it safe to say this isn’t a Perfect Buyers Market?

There are certainly incredible interest rates. Prices have certainly come down a long way.  Those are two of the defining characteristics of a Buyers Market.  What’s missing?   Great places that people actually want to buy.  I think some people call it supply.  Or maybe “effective supply” would be a better term.

I keep having the same deja-vu experience.  Clients who’ve been looking forever, pouring over the on-line pictures of homes for sale, who keep calling and asking to see places they forgot they already saw a year ago.  Houses that didn’t work then and aren’t going to work after another 365 days on market and a minimal price change.   I call this  “Deja Viewing”. Stare at the MLS long enough and homes start repeating themselves over and over.

So when’s this slow tortuous drip of new properties coming on going to end?  When do the floodgates open? I feel like a kid staring at the classroom clock.  Waiting for recess from a hard lesson. The minute hand isn’t moving. The fabric of time is frozen.

Thursday was Groundhog Day and another shadow appeared again this year.  Was it just the shadow of a huge shadow inventory?  Or was it also the shadowy logic of would-be sellers planning to hold out putting their places on the market for as long as they can.

Either way, looks like the winter of our buyers’ discontent is going to last at least another six weeks.  If we don’t shoot ourselves in the foot that is – by kicking the groundhog down the road even further…

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