Gary Wuestenberg's Blog

Wow how a few months can change things. At the start of this year we had a high inventory and prices were dropping weekly. Then something happened and everything changed. What happened was the banks took a moratorium – meaning they stopped putting the properties they had foreclosed on the market and they stopped foreclosing on properties. I don’t think they completely stopped the foreclosures but they sure did stop putting houses on the market. This created a shortage of housing inventory. And with interest rates being so low there are literally more buyers than houses right now. So today’s current market conditions are very different than when we started the year. With a shortage of inventory and a large number of buyers – mostly first time buyers and investors – every property that is in somewhat decent shape is getting multiple offers and selling for over the asking price. This is good news for homeowners but creates a tough market for buyers – kind of what it was like in 2004 and 2005 only prices are much lower.

I am told that the banks are going to start releasing the properties they have in their portfolio but at a slow pace so as not to flood the market. This will keep prices from dropping too fast if at all and may increase prices. So if you are keeping up with the news about the housing market and have seen where prices have started to climb a bit it can be explained by the lack of inventory.

Does this mean you should buy right away? That depends on each persons individual situation. Certainly investors are buying. Most are buying to hold and rent the property thinking we have hit near the bottom of the market. As for individuals, you should consult a real estate professional and if you have one, a tax professional. But one rule is still holding true – buy for the long term if you are going to buy.

Thanks for reading!