Supply Declining, Demand Rising – For Now
Home sales have increased while the supply of homes on the market has dropped over the past couple of months in Palo Alto, Los Altos and surrounding area. As potential sellers hear that values are firming, they are more apt to wait (hoping to get a better price later) rather than sell their home now.
Is this a good idea? We don’t think so.
An article in Friday’s Wall Street Journal[click the link to view it] outlines yet another reason why folks shouldn’t be too confident re a quick recovery, in spite of the recent stock market rally and improved consumer confidence.
In fact, the more we read, the more we believe that a good portion of the stock market rally was based upon a combination of the public’s wishful thinking and Wall Street’s investment bankers’ need to buy and sell stocks.
Meanwhile, businesses are still contracting and laying off employees. This recovery is far from over. There is a very high probablility, in our opinion, that local home values could decline further. Therefore, if an owner is thinking of selling in the near future, they would be well advised to do so now while we are in a “balanced” market.
A “buyers” market is likely to be back with us very soon.
Jeff and Steve