Happy New Year 2011
Some observations as we move forward into 2011:
Buyers will remain hesitant – a condition of overall low consumer confidence, and concern about employment stability buyers remain on the fence, some confident that prices will drop further
Inventory levels will remain high – the high level of listing inventory leads to “decision paralysis” – many people when faced with an abundant number of choices choose to make no choice at all. Buyers want to see as much inventory as possible for fear of missing the “right” home
Buyer and seller conflict – buyers are seeking deals and driving hard bargains, in both price and seller concessions. They are well aware of a days on market figures, and as that number increases their offers decrease accordingly. Sellers are sometimes hesitant to accept the reality of the market and downplay the importance of trying to negotiate with a buyer – who knows when the next one will come along?
Economic Factors – many indicators point to the slow gradual rise of mortgage interest rates over the year. The national average rate for 30 year mortgages topped 5% last week. A economic wildcard is the steady increase in the price of gasoline, the average price of a gallon of gas in the PA suburbs of Philadelphia reached $3.16 – an increase of 46 cents from the same period a year ago. Rising gasoline prices have proven to have adverse effect on consumer confidence and spending.
