02-23-2012 03:48 PM
Is that a chart reflecting national supply? I see it is from NAR so I doubt it is California specific.
My guess is that most potential equity sellers are staying on the sidelines because they do not need to sell so they think they can wait out the housing price decline....there is probably another segment too nervous about the economy to chance moving up or buying right now.
My guess is that if the networks start running stories saying that house prices are rising and if there seems to be better economic stability, then there will be a big house-dump onto the market, erasing any temporary gains.
The rise in oil prices will not be good for housing...if the mid-east situation escalates to war then we will see much higher oil prices...I think housing will take another beating, especially suburban and exurban areas like riverside and san bernadino where commutes are biggest and the mc-mansions will take another hit because of the energy costs to heat and cool them.
02-23-2012 03:54 PM
Fewer equity sellers.
Fewer owners willing to sell at a lower than expected (not lower than market...) price.
Refinanced sellers now committed to paying their house off since they've got a low rate instead of selling.
Fewer REO sales. When Fannie / Freddie / and HUD are rolling out bulk REO sales to large scale investors, that takes quite a bit of possible inventory off the table for individuals to buy.
Thanks for reading,
See all my reviews
02-26-2012 10:03 AM
JW said: "#1-A) Fewer equity sellers.
#1-B.) Fewer owners willing to sell at a lower than expected (not lower than market...) price."
In my opinion, those two points are interelated.
There is ALSO a strong possibility that there is simply a surge in buying activity, that potential sellers haven't sufficiently been made aware of this, and when they DO become aware of these two facts - both more sales happening, AND the that prices seem to be firming up - they'll will join the party, quite quickly.
I showed a property - in Coto - this weekend which had OBVIOUSLY been priced too low - an equity seller, priced LOWER than neighboring distressed listings - most of which were in escrow - at higher prices. The place showed far superior pride of ownership, and there was no good reason for the agent - in MY humble opinion - to have priced it so low.
My client looked at it on its first day exposed to the market, and was agreed - with me - that if he was interested, he should probably offer slightly more than full price - as there was ALREADY an offer, sight unseen. He chose to not make an offer, but only because he didn't really like the floorplan.
As I have tried to clearly state before, there are two tiers of pricing, pretty much anywhere in the O.C.. A lower tier consists mostly of distressed listings - short sales, REOs, and other forms of distress, and a higher tier comprised mostly of non-distressed sellers, offering potential buyers a more turnkey home, at a more stable escrow period. The higher tier is usually close to a 5% premium, which buyers WILL gladly pay for, so as not to deal with REOs in horrible condition, or short sales with no definite outcome.
Bob Phillips - Realty ONE Group - South Orange County, CA
03-20-2012 04:36 PM - edited 03-20-2012 04:36 PM
"So how would you explain what is happening to inventory?"
I'd explain it by saying that that's a NAR chart you have there.
In other words: Not Actually Real!