Attention buyers: Remember the time when there were multiple offers on homes. There back again. But for a different reason. Orange County real estate sources have noted that listing inventory is half of what it was last year. We went from over 12,000 homes for sale to now only 6,000. And time on the market is shortening dramatically.
I don’t see this improving any time soon for several reasons.
1. Home builders had stopped building in recent years. They are resuming again, but at a slow pace.
2. Lack of equity in homes means that people can not afford to pay move up costs and are therefore staying put.
3. Difficulty in getting home loans means they can’t acquire replacement homes if they did list.
Such low inventory usually points to rising prices. We are still in a market where short sales and foreclosures are undermining prices, however at the end of the year tax benefits of short sales are due to expire. My guess is that when people have to pay big taxes to short sale their homes, that inventory will also dry up. An even shorter supply of homes and less price undermining will certainly lead to higher prices on the horizon.