Our drop in inventory is the most pronounced of any area in the country.
During the previous peaks in pricing, more homeowners would gladly sell for a record price…..and parlay their gains into a bigger home down the street or around the corner. But that was when you could buy an upgrade for an extra $100,000 or $200,000 – now it takes a million!
What about the long-timers? Those who moved up a couple of times were able to achieve their so-called dream home, and have now become very comfortable. Even though Prop 9 was intended to encourage the seniors to take their ultra-low property tax basis with them when they downsize, it’s not enough of a benefit to change the trend.
The end result? You need to leave town to make moving worth it. But nobody wants to go!
Of all the towns in America, we probably have it better than anyone….which means we should have the fewest number of people who are willing to leave town.
The logjam in the market is caused by the seniors who are aging in place, instead of downsizing or moving to the retirement home. Those who are over 75 years old are probably staying their current home for the duration. We need more people who are ages 55-75 to pack it up!
The only hope is that the baby boomers who haven’t saved enough money for retirement are counting on their home equity to get them through. It doesn’t mean they have to move though – they can get a reverse mortgage to tap a decent chunk of their equity – without monthly payments!
But for those NSDCC locals who are willing to leave town in order to liberate their home equity, they will enjoy a hyper-frenzy in 2022.
I don’t think there will be enough of them for us to get back to normal inventory levels. It could actually get worse in 2022, and inventory go down. Can you imagine a market with less inventory?
Don’t be surprised if we have fewer homes for sale in 2022 – causing the frenzy to blast off:
- Virtually every house sells.
- Pricing goes ballistic.
- Homes are sold differently.
If we do have additional homes come to market, the existing demand will soak them all up. It will take a flood of inventory to cool off the demand – meaning more than twice the inventory we had this year.
One source of additional inventory might be the retiring realtors who can’t hang with the big dogs, and they turnover their client database to an agent before they leave town. If you are in that category, let’s talk!
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