Supply and Demand

Nationally, the residential real estate market is out of whack in the supply and demand, with many fewer listings than buyers, and that's the main thing holding down sales in some markets.  That is usually not the issue in commercial real estate, since there are so many different types of properties, and they aren't often fungible.  There is a problem, however, in that we see many buyers and tenants who cannot find the kind of properties that they are seeking; that is a different variant of supply and demand.


We seem to see more of that issue now.  Why would that be?  First of all, it's much easier for buyers to see what's on the market by searching on-line themselves.  So, when they get to us, they have seen what's there, and they are looking for what's not there.  Secondly, it seems as though there are more Section 1031 tax-free exchanges, where buyers may be more constrained in what they need to buy, and in more of a hurry.  Thirdly, the lingering effects of a bad market have caused many sellers not to list.


What are the lessons here for buyers and tenants, sellers and owners?  If you are a buyer/tenant, it's more important than ever to make sure that you have a real estate agent who knows the local market, since you may be looking for that proverbial needle in a haystack.  We are doing more and more searches for what isn't available, and you can find those things, but you have to know where to look.  For sellers/lessors, the lesson is simpler:  List now.

Current Absorption Rates

Explanation of absorption rate: The rate at which available homes are sold in a specific real estate market during a given time period. If you look at the number for Middletown you can say “If market conditions do not change and if no new listings come on the market it will take 7.4 months for the current inventory to sell at the current pace of the market. A balanced market’s absorption rate is typically between 5 – 7 months.”

Getting Ready for Spring

As I sit here listening to March roar like a lion, I'm already anticipating, as are so many others, that spring is just around the corner.  Tuesday gave us a taste of warmer weather, and more can't come fast enough to suit most of us.  With the arrival of spring, buyers get a burst of energy, from lighter evenings and fewer travel headaches, as well as from the necessity for moving forward with yearly plans after a winter of hibernation.  If you are a seller, will you be ready?

It's hard to keep a property looking nice with snow, ice, and sand all over. It's also hard to get repairs and maintenance done, especially on the outside of buildings.  However, once spring pops, and buyers appear, you need to be ready to strike while the iron is hot.  You can't assume that the first warm day will be soon enough to think about repairs and improvements.  The paperwork and the marketing materials take a couple of weeks to prepare and execute.  Flyers and mailings take time to sink into buyers' minds.  Even when people decide upon a property, the financing and inspection processes can seem endless. 

It all begins with the seller, and the sooner, the better.  Get ahead of the curve, and be ready for those buyers when they come, even if it seems like "hurry up and wait".  Call your agent today, and be the lucky seller who meets the market head-on.