In spite of a WFB survey showing that a third of Americans will not have enough money on which to survive during retirement – and me providing some recent sales data that might back it up – readers here were having nothing to do with the notion that we’d see an exodus of baby boomers. We live in an affluent area, and certainly most homeowners are probably flush.
Let’s keep exploring who the future sellers might be. If we can identify a source that might boost the inventory counts, then sellers and buyers can adjust accordingly.
Another category is the waiting-for-the-top-to-sell folks.
These come in all shapes and sizes, young and old. Here are a few of the groups that could be potential sellers lurking – and just waiting for (more) signs that we’ve squeezed all the price we can out of this low-rate environment:
1. Formerly underwater and now positive enough to at least pay costs.
Roughly one out of eight homeowners in SD County are underwater, which is about half of what it was at the bottom a few years ago. Those who have reclaimed some equity will need to move up, down, or out of town, because a lateral move doesn’t do any good – they’ve survived the current payment this long (loan mod or not) and are tempted to stay put. If some can get their price now and need to move, they just might.
2. The unsuitables.
Those who own a house that is unsuitable – too big, too small, or too much maintenance – might sell if they get their price and move to a better fit.
3. ‘Downsize and travel’ folks, usually baby-boomers.
Probably not desperate, but if they got their price, they’d be on their way. They are more motivated by moving closer to grandkids than anything else.
These are lukewarm sellers compared to the previous discussion where I suggested that some baby-boomers would need to sell to survive. There is crossover between the groups, and a common thread is that they are only motivated by a price – theirs. Any new listings will attempt to push prices higher, and we’ll see if buyers are willing to step up. These sellers aren’t necessarily going to buy another home locally, which could help balance the supply and demand.
Because these sellers have suspicious motivation, we can probably expect that “The Great Wait”, as Shadash called it, will be with us for a long time to come.
Stay tuned for tomorrow’s Case-Shiller report!