Published back on August 23, 2006. The writing was on the wall.
The following pins were supplied by The National Association of Realtors in their latest report, CNN reported.
- 7.3 month supply of homes on the market, largest since April 1993 (13 years)
- Number of homes for sale up 40% from last year, a new record high
- Pace of sales slowest since January 2004.
I’m no supply side economist (though I play one on this blog post), but if there is a huge supply of homes for sale and sales slow (less demand), home prices should go down, not up. It happened to widgets in Econ 101. Was it Bob Dylan who once said, “You don’t have to see the charts on Matrix to know which way the wind is blowing.”
So what does this mean to buyers and sellers? Buyers may be better able to negotiate and sellers will have to price right.
Here in the Twin Cities we are close to hitting bottom. Our inventory is actually going down a bit for the first time in almost two years. Prices have gone done but not by a huge amount. As for pricing listings, I walk away from listings where the sellers want too much for the home. There are plenty of other agents in our market who are willing to list over priced homes.