Market Update From Our Most Recent Email Newsletter, March 2011
In our last newsletter I discussed the current bank owned property inventory, and aggressive pricing by the banks. The aggressive pricing seems to have had the desired effect. A large part of the foreclosure inventory that piled up in November and December is sold, and default (pre-foreclosure) numbers in the JBLM Region have declined, especially in Thurston County (Info from Realty Trac) . If you have been actively watching foreclosure listings, you have probably noticed that many (attractive and/or well priced) homes are no longer showing up in your search. Of course the overpriced/junk is still out there!
There will of course be many, many more foreclosures over the next couple of years, but at least the tide seems to have turned.
I have been making noises about housing shortages for the past 6 months or so, and the inventory is starting to show signs of shortage primarily in finished new construction. Several years ago, banks were allowing builders to pile up inventory…no longer. Most of our local builders (Quadrant and Horton don’t fit this category) are now finishing one home, pouring the foundation on the next, and then being forced to stop until home #1 sells. Additionally, while we still have a fairly large inventory of existing homes, much of what is out there has been picked over, and buyers are becoming more aggressive in bids on the more desirable properties.
Delays in new construction will push buyers to existing homes, especially relocating military buyers who’s alternative is a hotel. More demand for existing homes, and a picked over inventory, may result in increasing home prices as we move into the summer. With thousands of new arrivals expected to report to Ft. Lewis this year, our primary demographic (Close to JBLM, 1500-2000 sf, 3/4 bed 2/3 bath) is bound to be in more demand this year than last, when over half the population of the base was deployed.
While this is still very much a buyers market, things are looking up for potential sellers. As we get further into spring and summer, I believe that we will see a sellers market situation for some segments of the market, but only for those with desirable/well priced properties..