The inventory of single family homes and condominiums nationally is at its lowest level since 2004. In the Greater Park City area, inventory is at its lowest level since April, 2007.
Here are some reasons for the decrease in inventory:
- Underwater homeowners can’t afford to pay the difference between what they owe on their mortgage and their home’s value — and therefore can’t afford to sell their home.
- Those who do have equity in their home are sitting on the sidelines, waiting for home prices to improve before they sell.
- Foreclosures are decreasing and the number of Americans who are current on their home mortgages is increasing.
Based on the supply of homes on the market, sellers have a better opportunity to successfully sell their home today than they have had in the past 5 or more years. When a home shows well and is priced in line with comparable sales, multiple offers are quite common. Does a lower supply of homes mean it’s ok to price aggressively? In a resort market like Park City, many of our buyers do not “need” to buy and simply will not buy an overpriced home. A buyer is unlikely to just “make an offer” on an overpriced home. The buyer will assume the seller is not motivated, unrealistic, or both. The takeaway—even though inventory is down and sales are up, you still need to be competitive in terms of price, presentation and exposure to sell your home. Eventually, the law of supply and demand will kick in and prices will inch their way back up.
If you are a buyer or investor, now might be the best time ever to buy a home. Prices are down and interest rates are at all time lows, creating an historic affordability opportunity.