FreedomCM brought up the new data from Mr. Mortgage on the San Diego real estate supply and demand, and mounting foreclosures:
He has his usual colorful charts and commentary – here are a couple of his notes:
(T)he housing market — particularly in the mid-to-high — is highly unbalanced with supply outpacing demand at levels never seen before.
Unless sales demand more than doubles from here, this market will remain under significant pressure. But the doubling of demand would take total sales back to peak levels seen in 2005 and is unrealistic.
While I think we’ll all appreciate his reasoning, I disagree with his last sentence here. I think the doubling of demand/sales is VERY realistic – and PRICE IS THE ANSWER!
For an example, let’s look at Carmel Valley. To confirm his ‘doubling of demand’ to get back to 2005 levels, let’s look at the period March 15 to April 15:
|Year||# of sales||$-per-sf|
It would actually take more than doubling of sales to get back to 2005 levels, but we have foreclosures to help get us there! We saw 36 foreclosures brewing in the CV shadow inventory, what price will it take to move them?
Of our 24 closed sales this year:
TWO were under $300/sf, and both were bank-owned.
Thirteen of the 24 sales were under $340/sf, and their average time on market was 10 days from their last price reduction.
The banks don’t have a problem listing at the right price, and if 36 REOs came on the market EVERY month around $300/sf, I don’t think there would be any shortage of buyers. If you’re on the street, you’ve seen hordes of folks looking at the marginal buys, and jumping at the good buys.
Take a good look at his charts, because the evidence is clear – there are loads of foreclosures coming to the county. It’s great news for the buyers who have been waiting patiently for better pricing, and there should be enough to go around.