The scant number of homes coming to market is frustrating many a buyer.
This is the prime-time selling season – where are the sellers?
It seems that prices have gotten so low that elective sellers are staging a boycott around NSDCC. Here are the number of detached listings that came on the market between March 1st and April 7th, and the number of closings in the same time frame:
| Year | # of New Listings | Avg LP/sf | # closed in same period | Avg SP/sf |
| 2009 | ||||
| 2010 | ||||
| 2011 | ||||
| 2012 |
A few of the sellers coming on the market might get lucky and sell for a tad more just due to the supply and demand.
However, buyers are enjoying these prices, and they’d have to find a far-superior house to justify paying a lot more than the last guy. But there are few superior homes for sale for a reasonable price – the people who own them are fairly comfortable, apparently.
“It seems that prices have gotten so low that elective sellers are staging a boycott…”
I’ve heard this argument before. But wouldn’t most sellers want to turn around and buy?
“There’s Nothing Price Won’t Fix”
— JtR
“But wouldn’t most sellers want to turn around and buy?”
If they have enough downpayment/rehab money from the sale of their current house.
Buyers seem to be holding the line nicely on pricing despite the low inventory. I wonder how tighter lending standards relating the appraisals based on past comps are going to limit the price increases this time around.
Sellers can boycott, but with interest rates at record lows unless we see the rebirth of zero down neg ams prices are as high as they can get. A family of four making $150K simply cannot spend much more than $750K for a house regardless how upsetting this is to potential sellers.
Desire is a small part of demand, income and wealth are far more important.
Jim, listings are picking up in my part of Sonoma County. I looked at 5 on the broker’s tour today (sebastopol is a small town). One that was listed last thursday had an accepted offer by the time the swarm of agents reached it, all cash and 10% over asking. Another is priced close enough to market (1.095MM)it will likely get an offer close to asking and the other three sellers have been taking bad drugs and think it’s still 2006.
@ #5 … Its all location. $150k Salary logic has no meaning on the Coast when we see 750k+ all cash multiple offers. Salary logic works inland … but we want to be on/near the coast, right 🙂 🙂 .
I was hoping that coastal market will go down another 10-20% … boy I was wrong … I have been waiting for that for the past 4 years.
IMHO sellers have already won … because my landlord have increased the rent to $3750 for a < 3000 sqft house in NSDCC. I can keep on paying my landlord's mortgage or compete with all cash offers … either way as a buyer its NOT a winning proposition … well atleast NOT on/near the coast.
He who has the gold makes the rules. Sorry bitter sellers, you have no control over this.
When was the last time area homes sold for $368./’, anyone know? I thought the one reliable point about r.e. was over the long haul home prices track inflation, not income. Now, if our measurement of inflation has been so skewed to nullify this correlation, I’d expect prices would grow faster, not slower, than inflation (cpi has NEVER been adjusted upwards). I do know upkeep costs have continued to rise throughout these sorry r.e. days. And, I also know our beach community is a pretty nice place to live for those liking a mediterranean climate, great coastal views and still reasonable population levels.
So, as prices compress, it seems pretty reasonable to me prospective sellers WHO DON’T HAVE TO SELL won’t.
Elective sellers now believe prices will increase. Therefore, they are waiting to sell until they do. The REO inventory has all but disappeared. I’m surprised the decline in listings is only 20 percent.
Over the next couple of months I figure we’ll see the spring bounce start showing up in prices. It will encourage sellers to optimistically list high although who know if the buyers will take the bait. The buyers out there seem to be educated and they’ve probably been waiting for awhile. If they waited out the bubble in the first place what’s another 6 months or a year.
#11.
So, Lets see how buyers think currently : 4% interest rate ,Dow Peaking at 13K (401Ks are doing good ) and Decently priced home prices and stable job market in San Diego ( remember TopGun and Q). And still not many are pulling the trigger , why ??.
Simple reason (me included), we know for sure, interest rates are going to increase after 2014( praying it to be earlier), so there is a possibility that housing price might fall little further. So question becomes is it expensive to rent ( 20K per yr) for next two years VS buying a little expensive home right now at low interest rate. Another thing to consider is once we buy a home, we can’t move for a better paying job , unless we take a loss on home.
#12, Raj,
In which area are you paying $20k per year for a decent Single Family Home? I am playing close to $50k per year in rent for 3000 soft home with view in Aviara (92011). Most of the Craigslist Rentals in my zip code are listed at the same rate or more.
Following was listed as available rental in Aviara for $3750 per month this week … got multiple offers within 3 days and got bid up … by the time I contacted the owner, he has already increased the price to $4000+.
http://sandiego.craigslist.org/nsd/apa/2948412720.html
Here is another one going for $4250+
http://sandiego.craigslist.org/nsd/apa/2943641722.html
Personally I’ll never understand why people pay so much to rent. Who pays $4000/month to rent a home. If people are paying that kind of coin to rent it doesn’t surprise me that there ready to buy. 4 grand a month probably does feel like throwing money down the drain. If you got stuff that fills up a 3000+ SF home, so you can’t do the townhouse thing, and you love/schools location then might as well just bite the bullet and buy.
The problem with biting the bullet and buying now is the lack of quality inventory. As Jim has documented here very well, your options if you’re dead-set on buying now appear to be either 1) jump into the bidding-war fray on the few quality properties out there and be willing to outbid everyone, or 2) settle for a property with alot of warts. If neither one of these options sounds particularly appealing, it may make sense to rent for awhile and see what develops over the next few years.
@Kishan Khurana #13.
92127 – Hunkering down and renting a 2 bed/2bath Condo(~1100-1200sft) with mini backyard and 2 car garage. 4S Neighboorhood. Precise rent = 24K.
Income -Above 200K.
House Range I would be delighted is : 400K.
Reality : 650k-750K with Mello. I can’t afford more than that.
DownPayment : More than 20%.
Family : Single Kid. Has 4 Years before school starts..
I would Pay 50K for a rent home, if my Income range is around 300K+ and I have 2 kids and we want both of them in a good school( neighboorhood).
If not, I would humble my lifestyle.
++ Adding.
If i can deduct my entire rent for a home based bussiness/work, I might consider paying little higher rent.( It is not my scenario).
Raj,
“If not, I would humble my lifestyle”.
You said it man … those are the Wise Words.
Unfortunately market is not led by the wise ones … its led and controlled by the least educated, worst informed, greedy, most flamboyant and gotta-have-that-ocean-view-house-because-life-is-short types. I tried to be that wise one with reason, and got my ass handed over to me multiple times when trying to buy the “right house” at “right price” on/near the coast.
On a related note … Why people pay $4000+ per month rent for living near the coast …. its like asking why folks drive Mercedes & BMWs, when most of us perhaps dont NEED more than a Honda Civic. We do certain things just because we WANT/LIKE it that way … its beyond reasoning & logic … or else everybody would be driving a Silver Honda Civic LX with Grey interior … (no offense to Civics).