Should Miami Real Estate Buyers be concerned about Shadow Inventory?
Yesterday’s Open Houses…
At the two Miami Open Houses we held yesterday, we experienced a large amount of Buyer traffic (many of whom came with their realtors). This indicates that those buyers are ready to make an offer once they see a property that suits their needs. One of our listings priced at $495,000 had 13 groups of people come by. The other listing priced at $725,000 had 10 groups of people.
Concerns from a Couple relocating from Boston…
One couple was just relocating back to Miami from Boston. They indicated they were ready to buy. However, their concern is that the Miami bank-owned shadow inventory they’ve heard about will be introduced to the Miami market creating more supply and lowering prices.
Jason’s Observation…
We’ve been hearing this for 4 years. The banks have been cautious not to flood the market with all of their inventory at once. If they do, market prices are suppressed and the value of their bank owned assets plummets. This points to continued restraint from banks moving forward as Miami prices continue to appreciate.
Miami MLS Data Chart (past 5 years)…
Additional Observations…
During the last 4 years, the Miami MLS has gone from…
41,794 Miami listings back in July 2008 (28.7 months supply of inventory) to…
11,313 Miami listings today (3.1 months supply of inventory)
3.1 months of inventory indicates a rapidly appreciating Seller’s market (meaning that if no other listings were to be introduced to the market for sale, the existing supply of homes would be sold within 3.1 months)
A balanced market (neither Buyer’s nor Seller’s market) is 6 months of supply.
Opinion…
Quite frankly…shadow inventory would be a good thing for the Miami market right now. There is very litte inventory for buyers looking to take advantage of today’s historically low interest rates.
What this data means for Sellers…
If you have been waiting for the market to improve before listing your home, this is the time to get your home on the market.
What this data means for Buyers…
Even if bank-owned shadow inventory continues to be introduced to the Miami market slowly over the coming years (as it has been for 4 years), Buyers are better off seizing opportunities at today’s record low interest rates (and still low prices) than waiting to see what happens.
ShowcaseMiami Realty specializes in assisting homeowners to Sell their Miami home.
(Highest price in the Shortest period of time)
To discuss a strategy for your home, call…
Jason Smith
Broker (Seller Specialist)
ShowcaseMiami Realty
www.ShowcaseMiami.com
786-326-8115