Inventory Is Lower = Demand is Higher

Posted by Hamid Grinage on Wednesday, July 18th, 2012 at 4:21pm.

One of the reasons why we are seeing more multiple offer and overbid situations is because the inventory of real estate in Oakland and surrounding areas is lower than it was this time last year. One reason for this seems to be that there are significantly fewer foreclosures that are coming on the market. It could be that the various loan modification/principal reduction programs have been gaining more ground and helping more homeowners avoid foreclosure. Also, short sales are more and more prevalent as information is reaching more homeowners through Realtors and other professionals.

When inventory is low, demand increases because buyers are competing for fewer homes..so the homes that are available are getting more attention than in previous years. It's a very welcome sign, and it shows that real estate is local. If you watch the news you may get the impression that sales are sluggish..however news coverage tends to use National statistics, which doesn't take into account local market conditions. The East Bay Area and Oakland in particular have always been desireable places to live, and this is reflected in how our market is changing before most other markets in the Country.

One exception to this is properties in the 500k and up range. There were much fewer foreclosures in this price range and therefore the inventory of these properties is higher than the properties worth under 500k.

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Inventory Is Lower = Demand is Higher