Things are Tightening Up Regarding Inventory, According to Agents ...

Normally the word ?tight? has negative connotations. It could mean a tense atmosphere or a scarcity of money, among other things. It has mixed messages for real estate, however, as a tightening of inventory means things are shifting toward the other end of the pendulum in some spots. More offers on homes means prices could go up, but a limited supply of options could also be the calm before the storm when more bank-owned properties flood the market.

Alvarez said investors and cash sales are driving up the market and that short sales account for approximately half of the activity. She said there was an inventory of approximately 200 homes on the market in February, compared to more than 1,000 a year ago. In late March, that number was down to less than 50, she said.

?Things are so hot, there are multiple offers before the second day is over,? Alvarez said. ?Anything up to $325,000 is getting multiple offers, and it?s sometimes less than a week or so on short sales, which is unbelievable.?

It?s also been a head-spinning start to the year for Craig Fallico, an agent in the Chicago suburbs of Park Ridge and Edison Park.

?This was probably my busiest January ever, and that?s saying a lot because I?ve been in the business for 31 years,? he said. ?I think people are starting to realize that home prices are inching upward and that interest rates won?t remain this low for a lot longer.?

Colorado Springs, Colo., agent Scott Ignatius even uttered the words ?sellers market? to describe the activity there.

?We have two price points out here, with 75 percent of the listings selling for $250,000 or less, and we have less than a three-month supply of inventory in that price range. By anyone?s definition, that?s a sellers market,? he said. ?Banks need to start releasing their foreclosures. I understand why the market isn?t being flooded in certain parts of the country, but release the hounds here, man, because we can sell them.?

Other reports of tight inventory, according to HouseHunt agents include:

Mike Bearden, president and CEO at HouseHunt, recommends that agents adjust their thinking if some of the above scenarios exist in their markets.

?As the inventory tightens and there become more buyers than homes available the shift in negotiating power will go to the seller. The buyer can expect to compete with other qualified buyers on every property. The agent will have to have down payment, loan approval and everything else in place to make sure that his or her buyer is the winner.? -Mike Bearden, President and CEO at HouseHunt.

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