Wednesday, October 04, 2006

The Circle of Real Estate life

It's been a challenging fall in the real estate market. Even though interest rates are down, home sale inventory is up, at least for the time being. Open a newspaper, turn on the news, or read on-line media, you can probably find 6 or 8 different theories on why the real estate market is down. One that you don't necessarily hear much about, probably because it's the least sensational reason, but also the most honest reason is the circle of real estate life. Let me explain. We have Seller A who's selling their Lakeview condo. They've been out with their agent looking at properties and have found a few that they really love. Seller A is also Buyer A. So why hasn't Seller/Buyer A bought a new home? They want or need to sell their current home before move on to their next home. So many of these homes on the market are also buyers in waiting. A seller is a buyer and a buyer is a seller. A year or two ago, the housing market had so much momentum that seller's didn't hesitate to have their home on the market and at the same time purchase their new home. So they might have to take out a bridge loan in the interim, but ultimately they were confident their home would sell and sell quickly. More and more sellers have been taking this more conservative route and it's reflected directly in the market. Will it stay this way long-term? Probably not. After the past several years of tremendous growth the market is balancing itself. One thing to never forget, people still need a place to live, to call home, so there will always be buyers out there.