A frustrating spring

User Forum Topic
Submitted by SD Realtor on February 9, 2009 - 11:46pm

A few months back sdr had posted about his projections of a robust spring. I am definitely seeing those results come true for certain home types. Homes that show well and are in good condition and are priced right are moving.

A secondary effect that we have not discussed much is the inventory problem. Quite frankly the inventory is horrible. Most inventory that is out there either has been on the market for a long long time or it is distressed inventory that has offers into the lender (for short sales). What we are seeing here is the prototypical seller who feels that they can fetch a higher price by sitting out another year or two. Of course I am not saying they will, but I am saying they will not list under these conditions. Thus the inventory remains poor, very poor in some of the desireable areas.

It will be an interesting 8 weeks. Seasonally this is when we see more homes coming on the market. Let's see if that is the case.

Don't mistake this post for a call that we have hit bottom or anything like that. It is more of a statement that it is going to be a frustrating spring. Additionally if we see increased stimulus in the form of credits, lower mortgages, things like that, make no mistake about it, more buyers will get off the fence.

Just reading posts over the past 6 months I believe we have seen more buyers then in the past 3 years here.

‹ Taking my medicine... Rental market in Carlsbad ›
SD R Pretty much a spot
Submitted by sdrealtor on February 10, 2009 - 12:05am.

SD R
Pretty much a spot description of what I was trying to prepare people for. For the most part no one will list unless they have to. There are quite simply not enough properties in the distress/REO pipeline in the areas most Piggies would be interested in to satisfy the demand that is there. I have a handful of nice short sale properties in nice areas. If I got an approval tommorrow on any of them, I could pick among 4 to 6 buyers on each. Prices are down and more buyers are back in the game. Inventory is abysmal. In Rich's January resale data rodeo he pointed out that months of inventory has fallen by 50% since last year. We both know it has dropped a lot more than that as there is probably between 20 and 40% of the inventory out there are short sales most of which have offers on them.

I think we may see sales volume drop a bit because there isnt adequate sellable inventory on the market to meet demand. By sellable I mean a property you can make an offer on and actually buy within 30 to 60 days. I guess you could call this effective supply. It will be interesting to keep our eyes on the months inventory figures which while overstated should continue to plummet.

Take a home that show well in good condition and is priced right and I'll show you a property in or about to go into escrow.

Hey the SDR and sd .... r, A
Submitted by cashflow on February 10, 2009 - 1:40am.

Hey the SDR and sd .... r,

A realtor mentioned to me that they thought May would be a telling sign as this is when the delay caused by the moratorium on foreclosures would catch up...meaning more homes would actually reach foreclosure and come on the market; is this the case?

I'm definitely feeling the
Submitted by AK on February 10, 2009 - 2:10am.

I'm definitely feeling the part about the frenzy, and the inventory. There are some ****ed-up houses out there. As a buyer I'm also seeing a lot of pricing games ... not sure if this is increasing or if I'm just paying more attention.

Just as an example, I saw one house in O'side go from $231K to $262K to $274K in the span of two weeks. I suspect I'll see more of this in the near future ... asking prices going up exactly 10% or $15,000 :/

One question for those of you in the business ... I see a lot of pendings but not a lot of closings. Is it just a matter of overworked REO property managers, or do you suspect a lot of these pending deals will fall through over financing, inspections, and so on?

Take a home that show well in
Submitted by barnaby33 on February 10, 2009 - 10:17am.

Take a home that show well in good condition and is priced right and I'll show you a property in or about to go into escrow.

That is SUCH an escapist tactic. EVERY HOME has a price at which it will sell NOW! All you are really saying is that distress hasn't hit the areas that are nice as hard as it has hit the areas that aren't nice. I'm pretty sure we can all agree on that.

If I remember correctly, you were predicting quite a spring bounce. Not just in well priced 4 bedroom, nicely staged homes, west of the 5. That's not a spring bounce at all.

I don't think you remember
Submitted by sdduuuude on February 10, 2009 - 12:18pm.

I don't think you remember correctly.

It seems a little early to be
Submitted by peterb on February 10, 2009 - 12:49pm.

It seems a little early to be talking spring sales volume. But I have noticed the volume in homes under $300K is pretty brisk. But, who would be willingly selling a home in this environment? Seems like most inventory would be due to some kind of pressure to sell at this time.... REO, divorce, death, etc... Otherwise, why sell now?

Maybe it's time to go out on a new limb?

I think that those people who
Submitted by SD Realtor on February 10, 2009 - 1:31pm.

I think that those people who are really actually looking for a home understand the points being made here. It is one thing to be viewing statistics all the time and humming along as you post. It is another thing to be a buyer out there submitting offers and getting rammed by multiple bids, short sales with offers in and not accepting any other offers, and just a very poor inventory selection right now.

It is a simple statement of fact, nothing more, nothing less. I cannot even say what the median prices, or the sales volume will look like this month compared to last year. However I can say with absolute certainty that so far this spring has a different activity level compared to last for houses in the say 600k and lower price range. As much power as buyers have right now, if you are a buyer and hoping to get something this spring prepare to be frustrated due to these factors and an extraordinary poor inventory selection.

Quick edit, on the 600k and less number please understand that scales with the neighborhood. Obviously 600k in Mira Mesa is NOT moving but 600k in other areas is moving. So apply the statement priced well relative to the local submarket instead of using a raw number. When you get to the higher end though, things are definitely hurting.

So basically it seems that
Submitted by kicksavedave on February 10, 2009 - 1:48pm.

So basically it seems that the bargain hunters are out in force, and are even competing with each other for their percieved.. bargains?

Only time will tell if they are really finding bargains, or just catching knives. And I'm sure a decent percentage of the buyers these days don't care much about the next few years of market fluctuations. They just want their own house and can finally afford it.

My "dream home" is still
Submitted by AK on February 10, 2009 - 2:36pm.

My "dream home" is still overpriced and could easily drop another 10 to 20 percent in the coming year or two, IMO.

But I wouldn't be able to afford my dream home comfortably, even with that price drop.

Houses in a more comfortable price range seem to be selling like crazy at or near asking, as long as they're in livable condition. By "livable" I don't mean spotless and move-in ready ... I mean fit for human habitation.

I don't think you remember
Submitted by barnaby33 on February 10, 2009 - 2:41pm.

I don't think you remember correctly.

I'm open to that my memory is crap. Why have memory, google remembers all.

I am seeing the same thing
Submitted by IONEGARM on February 10, 2009 - 3:37pm.

I am seeing the same thing but I think the real effect will be felt in the # of sales closing. Sales were only this "good" because there was motivated inventory willing to cut until it sold.

Now that has thinned some sales will slow down. Frustration is a good term. Frustration for agents, sellers and buyers as the market starts freezing up again.

I have been wondering when
Submitted by JustLurking on February 10, 2009 - 3:42pm.

I have been wondering when the "spring selling season" starts. Would we normally be seeing new stuff coming on now? I am looking at SFRs in La Jolla and there is not much new inventory at all. Most of the "new" listings are the same old retreads that have been on the market forever at 30-50% OVER peak pricing.

Waiting for the high end correction ($2Millon plus homes) is like watching paint dry. Urbanrealtor implied in another thread that La Jolla won't drop much. Why not?

barnaby33 wrote: I don't
Submitted by sdduuuude on February 10, 2009 - 4:10pm.

barnaby33 wrote:

I don't think you remember correctly.

I'm open to that my memory is crap. Why have memory, google remembers all.

sdrealtor wrote:

I beleive supply will be low as folks hunker down into survival mode for the next few years and that the limited demand of buyers will balance well against limited supply of sellers. I dont consider my prediction to be for a bounce but rather a nice balanced, stable market throough this Spring.

http://piggington.com/spring_housing_pre...

You are right - google works. You should use it.

Are many areas matching these
Submitted by ibjames on February 10, 2009 - 4:16pm.

Are many areas matching these numbers?

Clairemont is getting closer, but still has a bit to go, Mira Mesa is way off, any areas match these numbers?

If I saw numbers like this I would be more convinced it is time to jump in

2001 Prices

Good points by all.
Submitted by SD Realtor on February 10, 2009 - 4:34pm.

Good points by all.

JustLurking captured the essence best:

"I have been wondering when the "spring selling season" starts. Would we normally be seeing new stuff coming on now? I am looking at SFRs in La Jolla and there is not much new inventory at all. Most of the "new" listings are the same old retreads that have been on the market forever at 30-50% OVER peak pricing."

This is mainly the point I was trying to make. Also there is no doubt in my mind that this is not the bottom of the market. In some places yes we are closer to the bottom. In others not at all.

The smart sellers should
Submitted by sdrealtor on February 10, 2009 - 5:51pm.

The smart sellers should start coming on in the next 2 to 3 weeks. The think they are smart sellers will come on in May and will have missed their best opportunities.

Looks like I owe sduudde a beer at the meet up. For those of you that didnt click on the link that quote was made on November 17th.

sdKreskin

To illustrate the challenges
Submitted by SD Realtor on February 10, 2009 - 5:56pm.

To illustrate the challenges of the market for buyers right here and right now...

Please look at Richs posting for the January resale numbers. In particular look at the months inventory. It is HALF of what it was this time last year. HALF! That is a non trivial movement. I have been making calls on behalf of clients today for a few homes. Here are the results.

Home in Penasquitos. On the market about a week. 8 offers.

Home in 4S Ranch. Short sale and they have offers into the lender and are only taking backups.

2nd home in 4S Ranch on the market less then a week. 6 offers already.

Home in Torrey Highlands, short sale two offers but are still accepting offers.

Home in college area, been on the market less then a week and has 6 offers on it.

Home in Mira Mesa been on the market less then 5 days. Yesterday there were no offers. Today there are "several" according to the listing agent.

Like I said, it is just frustrating right now.