- Redfin Real Estate Forums
- Buying A Home
- First-Time Home Buyer
- Home Repair & Remodelling
- Housing Market Trends
- Inspection, Title and Escrow
- Selling A Home
- Bay Area
- Dallas - Fort Worth
- Inland Empire
- Las Vegas
- Los Angeles
- New York
- Orange County
- San Diego
- Washington DC/Baltimore
01-19-2013 10:15 PM - edited 01-20-2013 11:22 AM
....now the big question enquiring minds want to know. Will it fizzle out like in 2012..only to continue the downward death spiral? Or actually make something of a an actual come back to semi-normal levels of inventory?
Love you perma-bulls....there's something to be said for being a glass half-full kinda person. But the real test for this market is to see how it does under semi-normal inventory conditions (come on...you know I'm right!). Until then....these rising prices for more likely to be the result of anemic inventories than high tech job growth, stock options, lack of land, housing fairy dust or whatever other reasons of the month.
Personally I want to see what stomach those holding off from selling have. Like last time, a few bad down months in a row and suddenly there were lots of weak hands in the game...and the pigs got slaughtered as we all saw. I am loving this show.
*goes back to eating popcorn*
01-19-2013 11:33 PM
It is alreayd the 3rd weekend of the new year but inventory is still not coming back. It is quite abnormal indeed.
Could it be because of the cold winter that sellers defer the open homes? Don't really know.
01-20-2013 12:13 AM
Sunny 70 degrees and 11 houses for sale in PA. 3 condos for sale in Redwood City.....lowest inventory in history...and your point is? sales season has already started... 26 offers on 40 Tom Suden, RWC and no guareentee that the septic system will work... We could see the highest price rises in history. I am a bull but extreme price rises are not good. We need emergency relation of our ridiculous building and planning rules to allow more newconstruction and housing, now!!!!!
01-20-2013 01:00 AM
The case in point in PA. There are only 24 active listings. In a normal season in the past, there are about 80-120 active listings at any point. This week, there are only 4 new listings: 3 are about $2.5M and the other is $800k (but a 2/2 condo). Nothing in between. Those looking for buy a starter (3-bed) must be very disappointed.
01-20-2013 02:19 AM
I went to 3 open houses in evergreen yesterday. There were multiple people looking at each open house, usually two or three couples, but not the amount I saw last year. Is demand dropping or are people waiting for better weather?
01-20-2013 09:17 AM
When homes are getting 10+ or 20+ offers, it'd take a LOT of inventory to lower prices. You'd need to increase inventory by 5x and decrease buyers by 5x. That's a pipe dream.
01-20-2013 10:17 AM - edited 01-20-2013 11:44 AM
I'm not sure where you are seeing seasonal upturn in inventory. It's not even happening where I live (out in the sticks, nowhere near "RBA")
This is the general area where I was looking... and inventory was already lower than normal when I went into contract in late 2011 (darn, Redfin's own forum won't even let me embed their own widget for the graph): http://www.redfin.com/county/330/CA/Napa-County <-- tick the # for Sale box and uncheck all others
And here's from Redfin's article on Bay Area inventory:
Am I sounding like a bull yet??
Not so fast. I'm just acknowledging reality. The reality is that inventory has gotten absurdly low. In fact, it had started dropping quickly as soon as my wife and I started looking for a house (in 2010). 4-6 months into our search, inventory was HALF of what it had been a year before.
Meanwhile, our agent told us he knew for a fact that there was a huge shadow inventory -- he personally knew about many vacant/foreclosed REO properties that were only being put on the market at a trickle rate, one by one.
Whether that is true or not -- or if those properties have now been bought and absorbed (seems most likely that they disappeared in closed-door deals to major investors without ever even seeing the light of MLS. But what then? They should still be showing up on market or flooding the rental market...), it's irrelevant because what we are seeing is:
The fact of the matter is that prices are jacking up due to this illusion of low inventory. Yes, I call it an illusion because:
- population has not changed dramatically in the Bay Area recently. It has grown at about the same pace it has for a few decades now. Some will argue that it doesn't count because population growth (ie. demand) was offset by frantic building of new homes (supply) in the exurbs during the bubble, and that may be true... but it doesn't explain the period before the bubble when inventory was fine and normal and prices held steady/stagnant throughout the 90s.
- it's not primary-residence seekers who are buying up the properties. It is investors and/or 2nd-home buyers. Right now the percentage of houses in this area being sold to investors has hit an all-time high record. What do you think that means will happen?
This is not a sustainable economy, because it's not driven by need -- it's driven by greed. You can't keep a commodity market afloat by only swapping the commodities back and forth between people who are all, in essence, sellers instead of buyers. This would be like manufacturers/wholesalers selling to resellers who then sell to resellers who sell to resellers... with no end-destination bottom consumer in sight. It just doesn't work. If your sole motivation for buying a property is to "sell" it (either all at once, or as a "rental" which is similar to a sale because either one requires a consumer ie. resident), you're going to be out of luck if the vast majority are doing the same thing and competing for the same clientele (buyers/renters).
Another term for this sort of setup is called "pyramid scheme." Sure, the early buyers make out okay, but the late-comers (ie. anybody buying right now with an intent of "investment") is left holding the bag and losing big time.
So, what we have is a bunch of people who think they have what it takes to be real estate barons but the bottom line is that these houses have to actually go to warm bodies -- not just bank accounts with signatures. That number of bodies hasn't increased at a faster rate than normal, so you're either going to see rents go down (due to a suddenly-spiking supply of rentals, which is likely since that's what most homes are being bought for), or inventory go up (and thus prices likely go down). It's that simple.
01-20-2013 11:13 AM - edited 01-21-2013 09:20 AM
In Santa Clara County releases is holding at the same low level as Nov. 2012. As predicted, short sales this year are not what it was even a few months ago. Just regular sales with an astonishing asking prices.
The potential sellers are waiting til price maxs out by suggesting they will rent out for awhile. Those contemplating to sell and move up are worrying that they can NOT find or afford bigger homes. They claim they don't have much equity.
Historically, it is March sale that surges. For 2013 if the inventory remains to be this low in 30 days, it would still be sellers market for sometime to come.
Keller Williams Realty-Cupertino