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ORANGE COUNTY IS FLOODED WITH UNREALISTIC SELLERS

ORANGE COUNTY IS FLOODED BY UNREALISTIC  SELLERS,

THE HOUSING MARKET HAS CHANGED.

From mid March to the end of August, Orange County active listing inventory skyrocketed up 87%. What is causing the rapid change this time? Way too many overpriced homes are hitting the market. Demand is dropping because there is a drought of properly priced homes. The problem is that everybody has finally caught wind that home values are way up. Real Estate mailers, newspapers articles, and all have reported multiple offers, and a lack of inventory. Family and friends tell one another about homes in the neighborhood closing at higher prices. They talk about Real Estate recovery. These reports encourage many home owners to come on the market. Sellers don’t carefully consider a price, instead, they push value to the edge of reason and arbitrarily arrive at a dollar figure. Within the past few months, Realtors started taking listings even if the homes were asurdly priced because the inventory was at an anemic low. The thinking was that an overpriced listed home was better than no listed home at all. Since March active listing inventory has almost doubled. Because so few of the homes listed for sale are priced at or close to their fair market values, the demand has plunged to its lowest level since the end of January.

Have you seen more open house signs on the corners of busy intersections lately? That is a sure indication that homes are not selling immediately like they did just a few months ago.  Because too many overpriced homes are hitting the market, the expected market time for all homes in Orange County in now above the Two-months mark, a level not seen since March 2012.It is time for sellers to get real. The market has shifted because homes are no longer priced based on recent pending and closed sales. Instead, some sellers are basing their prices on the list prices of other overpriced homes in the neighborhood. Other sellers are basing their price on what they would like to net from the sale of their homes.  Sellers need to arrive at the fair market value and decide if they still want to sell. Because demand is dropping as the inventory rises.  The fair market value is NOT what a seller wants to net from the sale of his home; it is the value of a home based upon the cold, hard facts – the most recent pending and closed sales.

Steven Thomas is a recognized expert on housing trends. www. OCAR.org

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