Explaining Inventory Pileups In a Seller’s Market

Contrary to popular perception, the most common explanation for skydiving fatalities isn’t due to a parachute failing to open.

chain reactionRather, the first parachute opens partially.

Then, instead of cutting the first chute loose and pulling the reserve, the (understandably) panicked skydiver immediately opens the backup — which runs into the fouled, trailing first chute, rendering both useless (grim but true).

Tangled Parachutes & Clogged Pipelines

Even in a seller’s housing market with scarce inventory, it’s still possible to pinpoint multiple Twin Cities neighborhoods this Spring with supply overhangs.

The most common scenario:  one or more homes listed last Fall or even Summer at too-high prices; fizzled (failed to sell); and are now clogging the sales pipeline for newer listings.

The phenomenon is more common at higher price points (over $500k), where homes typically take longer to sell anyways.

Languishing Listings

Whatever the explanation, the short-term solution is invariably the same:  lower asking prices.

The longer term solution is for one or more of the languishing listings to cancel, and wait for the overhang to clear.

Meanwhile, savvy Buyers (and their agents) know to be on the lookout for just such situations . . .

About the author

Ross Kaplan has 19+ years experience selling real estate all over the Twin Cities. He is also a 12-time consecutive "Super Real Estate Agent," as determined by Mpls. - St. Paul Magazine and Twin Cities Business Magazine. Prior to becoming a Realtor, Ross was an attorney (corporate law), CPA, and entrepreneur. He holds an economics degree from Stanford.

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