Real Estate Inventory

The biggest news this month is the dramatic decrease in home inventory.

Currently there are only about 14,000 listings in the Saint Louis and Saint Charles MLS system.   This is only about 60% of the number of listings on the market last year.   Homes that are priced correctly are moving very quickly.  In fact there are reports of homes with multiple offers and moving within 7 days when they are priced right and move in ready.  Therefore, if you are able to price your home at current market rate, and not 2006 pricing, it’s possible it could sell quickly.  

There are multiple reasons behind this:

• Remaining demand from 2008 – As many people sat on the sidelines in 2008 due to the economy, their shrinking stock portfolio, and the pending election, the market soured.  If supply stays the same while demand goes down, pricing will go down as well.  Now that portfolios are slowly on the rise, the election is over, and there are many great benefits to purchasing people are getting out there.
• $8000 First Time Buyer Tax Credit – When first announced, the $8000 tax credit seemed like it might be more of an icing on the cake, than the cake itself in terms of purchasing real estate.  Then, a little known piece of the law was found.  If you bought a home in 2009 and qualified for the credit, you could amend your 2008 taxes and receive the refund immediately!  This has spurred countless purchasers into the market.
• Low interest rates – Rates are still at historical lows.  With the average rate howevering around the 5 – 5.5% mark, it’s a very affordable time to buy.  The less it costs to borrow money, the more the buyer can afford, and the more it helps the fragile housing market.

These factors combined with the pending MHDC NSP program which will offer a $15,000 credit at closing to purchase a foreclosure should offer prosective purchasers some great incentives to buy.