Zillow’s Negative Equity Report for the first quarter was released today, and it adds to why we aren’t seeing many short sales or REOs around NSDCC.
The upper tier homes have the most equity, and in San Diego only 5.2% of the higher-end homes are underwater:
With very little pressure on sellers, we will probably just settle into a real estate malaise for the rest of the year – with occasional bursts of activity caused by well-priced homes or price reductions.
without a lot more new inventory (new homes) I think it will be a Permanent funk (maybe the new normal for SD).
IMO anyway.
All the action will shift to the outer burbs where new stuff is still being built (also IMO).
The perm-funk would cause buyers to relax a little, then get complacent altogether.
Will sellers recognize in time?
IMO no if elective sellers, they will most likely pull their listing if they can’t get their price if no new inventory is being built.
IMO anyway.
Sorry, I just don’t get this “negative equity” expectations bias. If homes turn over every 7 years shouldn’t we always expect to see 14% of homes under water – just because of transaction costs? Or, does everyone buying a home believe they’re smarter than the rest of us & are buying below market value?
Remember the old adage,it’s irrational to expect too much of people when 1/2 of us have IQs below 100.