More on the housing market bubble:
(from one of the many websites I frequent)
"It's the inventory, stupid."
When I sold my overpriced condo last year in Phoenix, inventory was at 5,000 units. Now Phoenix is showing 53,806 units for sale, combined with 11 straight months of sales decline.
U.S. Cities With Biggest Housing Inventories
Record-high inventory levels are forcing price cuts and buyer incentives in metro markets around the country
In the summer of 2005, the Phoenix real estate market was experiencing what local brokers call a "feeding frenzy."
All these homes bought by investors to try and get a quick return are having to be sold because of the interest rates and the leverage they put into them," says Pat Lashinsky, ZipRealty's senior vice-president of product strategy. "[Phoenix] is having to go through some market correction to get that right."
"Not only has the inventory increased threefold, but the amount of buyers on the market is less than half of what it was last year," notes Ron Fillion of Ocean International Realty in Miami.
Linda Rheinberger, GLVAR's president, has advocated several strategies to sellers that could help bring the market back to equilibrium. "We're encouraging people who aren't motivated to sell to delist and place a tenant in their property," she says.
While price cuts are becoming rampant in most areas of the country, a handful of markets are too stubborn to come down. In the San Francisco Bay Area, inventory has almost doubled in the past year -- from 15,826 to 28,621 homes -- yet a proportionally small number of sellers have dropped their asking price.
At the other end of the spectrum, Boston is already backing down from its peak inventory level of 45,815, recorded in June of this year. Last month, 46% of the homes for sale in Boston were reduced -- an aggressive selling trend that will likely begin to show its face in more and more markets around the country.