The retailer has far too many units of a product in his inventory. Last year, he only sold 10 widgets, but he now has 20 in inventory. Based on last year’s sales and prices, it would take 2 years to sell those widgets. He can’t return the widgets. He needs some cash flow, and the widgets’ require maintenance while they sit there in the warehouse. What’s the retailer to do?
Well, have a sale of course!
It is sometimes difficult to get real estate professionals to talk about buyer or seller markets. It seems to be more the realm of business columnists and economists who discuss the market in terms of inventory and absorption rates. Its especially hard for us to admit that a hot market is cooling. With real estate, as with any other commodity, the law of supply and demand rules. More supply/less demand=buyer market. Less supply/more demand=seller market.
I am happy that real estate sales are great in this market. Unfortunately, that is not the case in many markets. Is a correction in store?
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