Kevin Comerford

With the final quarter of the year upon us, it looks like the fall real estate market is going to be a tight one, for buyers. Mortgage applications are up and indicate that demand for homes will pick up over the next forty-five to sixty days or more if applications stay strong which may follow continued improvement in government jobs data. Of course many people are speculating that this demand is/will be being driven by the impending deadline for the $8,000 tax credit and that is probably true.

Great, so we have plenty of inventory, right? True but to some extent many of the best homes of the season sold earlier in the year and the majority of what is still on the market has sat there for quite sometime and is now "picked-over". Of course there are always new homes coming onto the market and thankfully so, in Delaware County alone, Of all homes sold in July, those which sold in zero to thirty days (850) nearly double those sold in 31-60 days (430) and nearly triple those sold by their ninetieth day on the market (305). I would say that it is also true that for the most part, the sellers of homes that are currently on the market are people who have to sell for one reason or another and generally not the traditional "move-up" buyer just waiting to buy a bigger house.

Many people will look back on this "Perfect Storm" of low home loan interest rates, tax credits and low prices and wish that they had taken action. A first good step would be getting your credit report together in preparation for pre-approval; why not do it today?

I saw this article today on Minyanville and had a good conversation with my wife about the impact on the market by the "Phantom Inventory". The recently coined real estate term refers to homeowners "who want to sell, but keep their homes off the market while they hope for conditions to improve".

In our area of Delaware County, Pennsylvania this issue has resulted in the listed inventory of homes for sale being saturated with what Realtors might call "challenged listings" and homeowners call "a lot of work". This may be due to the owners of the Phantom Inventory not joining those who absolutely must sell in listing their home for sale. Make no mistake, there are some very nice homes on the market, but right now the bulk of the available inventory is made up of sellers who fall into one of the following situations: job relocation, bank owned, estates and short-sales. Many times these homes do not show well as they have not been staged, many need work or have been ill-maintained and the majority are vacant which doesn't help much in showings either. The result of course is a building inventory of homes for sale and modestly lower sale prices, the exact opposite of what the "Phantoms" are hoping for.

So whats the good news? Well, I wouldn't call it the "New Seller's Market" but there is, in many markets and neighborhoods, what someone might call a "hole" in the market. This hole represents an opportunity for realistic sellers with an attractive home that is move in ready to get the home sold. The buyers who are in the market are serious and qualified; Delaware County 2008 home sales are 399 per month with an average sales price down less than 1.5 percent from 2007.

I have talked with several sellers who are starting a new trend; they don't want to be part of the coming glut of inventory when other nearby homes go up for sale. Well informed sellers know that smart buyers are calling their mortgage company and locking in their rates now, spending the few hundred dollars that can save them thousands in interest and hundreds on their payments. Smart sellers see the hole, especially if they are in the market to buy but I'll cover that in another post.

There is a logic to today's market, after all the buyer of the five thousandth home to sell in Delaware County this year will settle sometime within hours of singing Auld Lange Syne on New Years Eve. (YTD 4,958, Over 300 Units Pending)

Minyanville Article

Auld Lang Syne Karaoke Sound Track (Great Seaside Background too)