Existing home sales rose 4.3 percent in January to a seasonally adjusted annual rate of 4.57 million, marking the third gain for home sales in the last four months, the National Association of REALTORS® reports.
We have a long way to go as more “shadow inventory” moves into the market. Simply stated, shadow inventory is that group of homes that should have come to the re-sale market by now but have not for one reason or another. The log jam must be released for the market to properly and completely heal.
As delayed foreclosures move to the market, prices will drop even more. This is true for all local markets but some will fare better than others. In certain markets, like Tucson and Oro Valley, we have seen relative stability in pricing for the last 12 months. In fact, we are below the 6 month inventory level in most price bands. This number is important because it points to one of the key market factors, which is supply.
No matter what your political bent is, you cannot deny the fundamental forces of supply and demand. As the foreclosed homes are put up for sale [and many of these are higher end homes], supply will increase. The double whammy is that these properties will also be put up for sale at distressed prices.
The big take away? If you are interested in selling a home in Tucson or Oro Valley, now is the time! Otherwise be prepared to hold the property for 5 years while the market heals.