Recently, the KCM Blog (a great resource of real estate news from KCM Crew) reported on shadow inventory levels across the U.S. They have an interesting infographic that shows the states with the highest and lowest levels of shadow inventory. Massachusetts has the lowest level in New England, and this is good news for sellers.
That's all well and great, but if you're left scratching your head saying, 'what the heck is shadow inventory and what does it mean to me?' we'll shed some light on the shadows
You've probably heard a lot about the foreclosures that resulted from the 2008 housing crisis. Many of these foreclosures have been on hold as the banks and the government have been working on a foreclosure solution. In addition, according to a definition by Investopedia:
"There are lenders that have been slow to put inventory up for sale for fear of flooding the market and further driving down prices, which would in turn lower their potential ROI."
So you're left with shadow inventory: a potential flood of homes coming on the market - either from foreclosures or sellers that have been in a holding pattern - which could drive down prices and values even further. But, the fact that Massachusetts has a low level of shadow inventory means that there's less guesstimating and less potential for the market to be flooded - because to flood assumes volume.
When you take this one step further and apply it to Arlington - a densely populated area with low real estate supply and high demand right now, there's even less risk for unknown shadow inventory to impact the area.
Again, this bodes well for potential sellers because they are not likely to be competing with a multitude of foreclosed properties that typically sell under value, and sellers have a better chance at retaining the true market value of their homes.
And for buyers? Don't hold out for a shadow inventory flood - what can occur in other parts of the nation doesn't always apply here. Those that have been waiting on the sidelines should get into the game to take advantage of low interest rates. If you've been looking to buy in Arlington you know there is a lack of inventory - and many buyers are already getting out there making offers before the prices start inevitably increasing.
Still not sure whether now is a good time to sell? We won't leave you in the dark. Contact us today and we'll give a full comparative market analysis of your home.