We are hearing a lot these days about "shadow inventory" -- particularly now that the new year has begun. An understanding of this term is KEY for anyone attempting to sell or considering selling a home in 2010! Shadow inventory refers to the vast wave of foreclosures that are currently being processed but have not yet hit the market. All economic forecasts point to these really becoming a factor in Spring and early Summer. What does this mean for you?
Appraisers used to be able to "ignore" foreclosures when they did market valuations because they just weren't the norm -- not so anymore. Foreclosures are now being considered by appraisers as comparable properties simply because of the sheer number of them and because they now infiltrate all price ranges. The more foreclosures with which you are competing, the more your property value is driven down by them. If the number of foreclosures is going to go up and up and up in a few months, we need to do all we can NOW to position your home in the market.
If you have been considering a price reduction but think you should wait til Spring, do it NOW. If you have been considering listing your home but think you should wait til Spring, do it NOW. The longer you wait, the more negatively this shadow inventory will affect you!
Additonally, the extension of the homebuyer tax credit has buyers looking now. The deadline for this is to be under contract by April 30. Waiting til February to list is missing out on a window of opportunity for those buyers looking to take advantage of that credit!
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