How do you know when it’s a good time to sell your home in the Raleigh area? You’ve heard about low inventory levels and more closed sales, but there’s more to this story.
Ever heard of shadow inventory? It’s kind of like, “Congratulations! You’ve won a free cruise for two on Carnival Cruise lines! Wow—this is great!” NOT.
Shadow inventory represents homes not currently listed for sale but are anticipated to come to market in the foreseeable future. But when is that? Most homes in shadow inventory will be controlled by banks and sellers in distress that might be more willing to take the first offer that comes along.
Shadow inventory includes
- properties in the foreclosure process
- other properties with delinquent mortgages (both serious delinquencies of over 90+ days, and less serious)
- condos that were converted to apartments (and will be converted back)
- investor-owned rental properties
- homeowners “waiting for a better market”
- other categories where the properties were not currently listed for sale
There are a number of homes that could show up as inventory, but they still need to be foreclosed and brought to market. Known as foreclosure stuffing, properties not entering the foreclosure pipeline are ultimately kept out of housing inventory, making the market appear stronger than it really is. As a result of these “lower” inventory levels, prices can go up. Things that make you go, HMMMMM, right?
What does this mean for Raleigh?
Raleigh home inventory levels reveal that inventory of distressed sales (foreclosures and short sales) has declined to somewhere between 10% to 13% of total homes for sale in the Triangle real estate market. That’s like the part of an iceberg that you see. It’s the part of the iceberg you don’t see that can have the greatest impact. We have consistent supply of homes, yet the Raleigh shadow inventory with its foreclosure stuffing is keeping home prices in check for now.
Last year the National Association of REALTORS® (NAR) hinted that sales would be better if banks would release more inventory. But this doesn’t compute because the Triangle still had 50%+ more properties available in our MLS than were available in 2006 and 2007.
Is NAR lying?
No. But they have an obviously slanted opinion. Instead of describing the number of homes in inventory, let’s address the quality of the inventory. As the market improves, we see buyers frustrated with the lack of quality inventory available for sale.
Some neighborhoods are performing very well while others are still struggling. Really? You mean that old joke about location, location, location is relevant? Go figure.
If you are able to take advantage of current market conditions to sell your home and move up or have a real need to sell, now might be a great time to make a transition. The Triangle real estate market is moving again and prices seem to be more stable and even increasing in some areas.
However, when you are selling your home, you have to keep a close eye on what your competition is doing. You also need to consider you’re being rejected for a reason, especially if you’re getting a bunch of showings and no offers.
- Have you overpriced your home?
- Is your home the largest one in a neighborhood of smaller homes?
- Have you staged your home, removed personal mementos and cleared all of your clutter? A home can’t sell itself!
- Have you selected the right Realtor?
If you’ve chosen Jason B. Graves at Raleigh Real Estate News, you sure have! We’ll ask the hard questions so you can sell your home for the most money.
Real estate is complex and you want an experienced Realtor at your side who’ll go to bat for you. Jason B. Graves is a student of our local Triangle market, knows about the kinds of homes that are selling in Raleigh and understands what it takes to help you find a buyer.
Call us at 919.981.6505