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Frustrated buyer? Vent here!

Posted by Scott Van Voorhis August 14, 2012 07:34 AM

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OK, this is definitely not a good time to be a buyer here in Greater Boston.

The few half-decent homes that hit the market too often wind up with multiple offers, leaving a larger number of overpriced dogs in need of work - or a location change - to pick over.

Let's face it, the drop in homes for sale is fast becoming the top challenge facing the real estate market in Greater Boston.

The latest Redin numbers show a 37 percent plunge in Boston-area homes on the market in July compared to the same time last year, the Globe's Jenifer McKim reported Sunday.

It's yet more evidence that the drop in inventory - which has been a hot topic on this blog - is much more than just a seasonal blip.

The big question now is whether the dearth of homes for sale will send the market back into reverse or will self-correct as more sellers get off the sidelines.

The shortage of homes to choose from, at least in the short-term, is helping stabilize prices.

But at some point, will buyers simply throw up their arms in frustration and put their house hunting on hold?

Here's a section of the Globe piece that deals with this issue.

Tim Ellis, Redfin's real estate analyst, said a continued lack of available homes can slow sales.

"It is really just being a big damper on the whole market," Ellis said. "Buyers are really frustrated right now. They look at all these homes but there is not much to choose from."

Then again, maybe this is a lot of hand-wringing over nothing - as sellers see homes snapped up and prices edging up, more will jump into the market.

That, anyway, is what a top local Fed economist told the Globe.

"Once people see houses are selling quickly, they will start listing their properties," said Paul Willen, senior economist for the Federal Reserve Bank of Boston. "It is a self-correcting thing."

So what's your take? Is the inventory shortage self correcting? Or are other factors - Europe, a still shaky economy, underwater mortgages - likely to keep sellers on the sidelines.

After all, most sellers are not going to pull the trigger unless they think they can move up to a better house, kind of a difficult proposition right now given the choices out there.

And selling in order to become a renter isn't exactly all that appealing either, with rents continuing to soar.

Frustrated buyers, here's your chance - fire away.

This blog is not written or edited by Boston.com or the Boston Globe.
The author is solely responsible for the content.

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About boston real estate now
Scott Van Voorhis is a freelance writer who specializes in real estate and business issues.

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