Almost $2 million for 2br/2ba, 1,468sf – and worth it!
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It seems the inventory is so picked over that the remaining would-be sellers need to lower their price to get in the game – but Yunnie won’t ever say it outright. At least he didn’t blame it on tight credit this time. From HW:
Lawrence Yun, NAR chief economist, says although pending sales decreased in June, the overall trend in recent months supports a solid pace of home sales this summer.
“Competition for existing houses on the market remained stiff last month, as low inventories in many markets reduced choices and pushed prices above some buyers’ comfort level,” he said. “The demand is there for more sales, but the determining factor will be whether or not some of these buyers decide to hold off even longer until supply improves and price growth slows.”
According to Yun, existing-home sales are up considerably compared to a year ago despite the share of first-time buyers only modestly improving. The reason is that the boost in sales is mostly coming from pent-up sellers realizing their equity gains from recent years.
“Strong price appreciation and an improving economy is finally giving some homeowners the incentive and financial capability to sell and trade up or down,” Yun said. “Unfortunately, because nearly all of these sellers are likely buying another home, there isn’t a net increase in inventory. A combination of homebuilders ramping up construction and even more homeowners listing their properties on the market is needed to tame price growth and give all buyers more options.”
Recently we’ve wondered how many first-timers are participating, but actual data has been scant. D.R. Horton says that 41% of their buyers are first-timers, which is probably similar to the resale market and sounds fairly healthy:
Here are the current market conditions through the eyes of D.R. Horton:
Check their #3 point. Entry-level sales are growing because the builders are getting better at devising new products for first-timers.
Case-Shiller Index cumulative changes since 2000:
Here are the San Diego NSA changes for 2015:
“Over the next two years or so, the rate of home price increases is more likely to slow than to accelerate,” Blitzer said.
For those wondering if there will ever be any more bank-owned properties for sale, here is the list of 38 houses between La Jolla and Carlsbad that are owned by lenders, or 3rd parties who purchased them at the trustee sale:
A few are listed for sale, and others are still waiting for occupants to vacate or lawsuits to be settled. This Bressi Ranch home was foreclosed in April, 2014, and just hit the open market last week at what most would consider to be pretty close to retail price:
The former owners had worked the system – they had been in default since 2008, and endured four different trustee-sale dates before finally giving up the ship. In the meantime, the lender probably did everything they could to modify the loans?
I don’t think anybody has to worry about getting foreclosed unless they have significant equity.
Today’s inventory is about 4% less than what it was last year at this time. Sales this month look to be on track to match those in July, 2014, but pricing is starting to flatten out. The median sales price is only about 3% higher, and the average cost-per-sf only 1% higher than last July.
Click on the link below for the complete NSDCC active-inventory data:
Shiller calls the real estate market inefficient and irrational in the article below – and I don’t know if we can even call it a market. Entry and exit takes weeks at best and are clumsy. You don’t know who, when, or how much until – and if – luck happens to find you. The entire game is rigged to encourage over-paying, so the conservative buyers have a hard time competing.
By Robert Shiller at nytimes.com – an excerpt:
Home prices have been climbing. They have risen 27 percent nationally since 2012, even more in places like San Francisco. But why worry? If you accept the efficient markets theory — and believe that real estate is an efficient market — then these prices are based on “new information,” even if you don’t know what that information is.
The problem with this kind of thinking is that the efficient markets theory is at best a half-truth, as a voluminous literature on market anomalies shows. What’s more, even that half-truth is grounded mainly in the stock market, which attracts professional investors who sometimes do make the market behave efficiently.
The housing market is another matter. It is far less rational than even the often irrational stock market, for a couple of important reasons. First, most investors find it difficult to understand how housing supply responds to changes in demand. Only a small minority of people think carefully about such things. Second, it is very hard for the minority of smart-money investors who do understand such matters to bet against bubble-level prices in real estate markets. In housing, the smart money has relatively little voice.
Read full article here: