Many parts of the Valley have finally returned to normal markets, with balanced supply and demand. A normal market does not necessarily mean a market in great shape. There is a normal level of loan delinquency, little distress, no shadow inventory to speak of, investors are not dominating the market and many (but certainly not all) homeowners are feeling good that they have some equity in their home again.
But, given the higher prices, interest rates that seem to be on the rise, media scare stories and the recent government shutdown, many buyers are choosing to stay out of the market and demand essentially collapsed. Expect significantly fewer sales in the 4th quarter of 2013 compared the same time last year.
All this is great news for the buyers who are still in the market or for those buyers who have been sitting the fence. Offers are getting serious respect at last and the upward pressure on pricing is dissipating extremely fast.
NOW, for a WEST VALLEY Snapshot: Pending sales are down 31% compared with a year ago, continuing a trend in weaker demand that started in July. At 2.9 months of supply, we are still well below normal, but we may reach a balanced market by Mid-December.
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