|Where Have All the Sellers Gone?|
|Followers of the market report know inventory in San Diego County has been at or near the low end of the spectrum for the past year.
This has had a salubrious effect on prices. The median price for single-family, re-sale homes is up 10% year-to-date, using a 3-month moving average.
The 3-month moving average median price is up 26% from the bottom of the market: March 2009.
Which brings us back to the question, “where are all the sellers?”
You can forget about the banks. There is no “massive shadow inventory” that will suddenly increase inventory. Currently, banks own about 3,562 properties in the county, which is about six weeks of inventory, if they were all dumped on the market at once. Only 1,131 homeowners had a notice of default filed in September, while 1,345 homeowners had a notice of sale filed.
The only other explanation for low inventory is homeowners who are underwater and unable to sell unless they do a short sale. Rising prices will mitigate this problem and more homes will be coming on the market. That will take a while, because we’re still 35% off the peak price reached in July 2006.
For the foreseeable future, we will have rising prices fueled by lack of inventory and multiple offers.
With money at an all-time low, and property prices 35% below their peak in 2006, those who have cash or can get a loan are in prime position to make a purchase.
Rick Campbell writes and publishes the San Diego Real Estate Market Trends Report.
Rick is a California licensed broker since 1991: CA DRE #01114738.
What this means to the Rental Market.
For the rental market low sales inventory means a higher occupancy of rentals, and therefore higher rental prices.
It becomes a basic economic equation, more demand + less availability = greater cost
As a property owner, this creates the perfect opportunity to enter into the rental market. With the right property management company, this allows you to market the property to in fullest extent, and to receive prime market rates. Your property can reach its full income potential with proper management, from screening and finding the right tenants, to incurring market rate for your property to maintaining the property to its highest standards to ensure you continue to receive prime market rate.
As a perspective tenant, know that you will have to work a little harder to find that perfect home. Give yourself more time to look, and try to be flexible when you find the home you like. Look for a home that’s well maintained, and see if the manager is able to lock in a lease to stabilize your rent.
Remember, the market constantly is going thru ups and downs. For the latest market updates and to find out your homes income potential, or properties available for rent, Please feel free to contact us at Rent@cairnx.com or reach us directly at 619-884-9115