Where did all the homes go? Buyers had the opportunity to take weeks to choose the home they wanted. As if a switch was flipped suddenly there was no inventory. What happened?
In the Orlando home market we are seeing two major changes.
Investors - The first change is that the investors are back and buying as many homes as they can while the prices are still down. Orlando has been a distressed market for many years. It is one of the areas that got hit the hardest with the housing market crash. Many people found themselves in homes that lost over half their value. It was common to have homes that were purchased for $400,000 suddenly worth $175,000. Loss of jobs and no value in the homes led to short sales. In 2006 we were all asking what is a short sale. Jump forward to 2013 and even our children can tell you what a short sale is about. The down side of a short sale is that it hurts your credit and can also take years for you to be eligible for a new home loan. To the joy of the investors this means we have RENTERS.
Foreclosures - Definitely the second part of our low inventory equation. The talk is that the banks are holding onto "shadow inventory." These are homes that have been foreclosed and are just sitting there and also homes that the banks are renting. Why would the bank not turn around and sell the homes? My thought is that they are realizing that if they only let small amounts of inventory go up for sale at a time they can create more demand. Our economic professors would be so proud that we are clearly understanding the whole supply and demand lessons they pounded into our heads.
What does all of this mean to you? If you are buying it means quick decisions on your home purchase. Be prepared for multiple offers on the home which in turn puts you over the asking price of the home. You want to work with an agent experienced in bidding wars on homes. Their expertise and reputation in town could make or break your deal. Talk to people that have bought homes with your agent already. It is ok to conduct an interview with your potential agent.
If you are selling your home then jump for joy! Now is the time to get that home listed. Remember the tried and true rules of selling. Act like your home is in a beauty contest. The more welcoming people feel when they walk in the door the more money in your pocket. Make sure your home smells nice, is free from clutter and feels as large as possible. PODS are your best friend. Ask your agent if they have a discount with a POD company. Pack up those things you can live without for a few months. A really big one - put things in your cabinets - this is for kitchens and bathrooms. Keep those counter tops clear.
Wende is owner of the iHouse Orlando Team with Keller Williams Classic Realty.
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