[quote=gzz]How long can this last without a big price increase? A year ago OB/92107 had around 25 condos and 45 single families on the market, now it is 4 condos and 20 single families.
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For as long as buyers remain patient. Put your house up for a with a make me move price and see what happens. That will probably show you the dynamics of this market. It will move if priced right, it will sit if it’s priced wrong.

Where is the inventory going to come from? I don’t see where.

-It’s not going to come from a flood of REO’s, the “next wave” that was always “just around the corner” never happened and was an urban myth
-Not going to come from builders, they can’t build that fast
-Not going to come from normal sellers, still not enough equity
-I don’t see a sudden rush of short sales, anyone who wanted to short sale has had ample chance the last few years

…so I think inventory will be tight all of next year. That plus low rates and healthy buyer demand: boomerang buyers coming back into the market who had short sales or foreclosures 3 years ago, plus household formation, plus investors, etc… will drive prices up again next year. Prices went up about 15% in San Diego in 2012, they should do that again at least in 2013. Wow 30% rise in 2 years? Who was predicting that in 2011????

And as we know well this is mostly artificial based on the Fed keeping rates low & all the stuff they did to stop foreclosures from happening. People don’t realize how low rates are, we literally have not seen rates this low since the 1800’s! But artificial or not, prices are still going to go up.

It’s disappointing they have to blow another bubble of CA prices once again with these rates instead of just letting the market correct once and for all to it’s natural level with normal rates.

Not sure where the 10-15% price rise is coming from. According to y-o-y Case Shiller index, prices are only up 4.3% http://www.mortgagenewsdaily.com/12262012_home_prices_case_shiller.asp

Predictions for rapid price rises may be misplaced according to the CAR. “[T]he market won’t be “corrected” until as far off as 2017, said Leslie Appleton-Young, leading economist of the California Association of Realtors”. http://www.utsandiego.com/news/2012/nov/10/housing-market-update/?page=2#article

If low rates are bringing forward buyers like they did with the tax credit, demand may wobble down the line, and with one in four homes owners in SD underwater, the move up market will continue to suffer.

And not too fast with the declining foreclosures please. The drop may have been largely due to the well publicized ‘mishandling’. NODs actually increased in July in some areas. http://www.nctimes.com/business/housing-foreclosure-rate-falls-but-rise-in-defaults-predicts-clouds/article_97008e26-076a-5500-93f5-c3f845625163.html

I doubt there is enough momentum to produce a strong sustainable recovery. More likely things will just tick along and remain volatile until unemployment improves and all foreclosure are flushed through the system. And by that time both rates and inventory may have normalized, which will put a dampener on appreciation.

http://www.dqnews.com/Articles/2012/News/California/Southern-CA/RRSCA121212.aspx

I’m going off Dataquick which shows a 13.7% rise year-over-year for SD County. Dataquick uses data directly from closed sales from the county recorders office. This is consistent with what I’m seeing being an active investor/buyer in this market since it crashed in 2008. I actually think in certain sub markets it is up much more than 13.7% in 2012. Like the lower end parts of town.

Case Shiller is 6 mos old, tired, stale data.

And I wouldn’t listen to anything Lisa Appleton-Young or at Cal. Association of Realtors or the clowns at the Nat. Assocation of Realtors puts out. They totally missed the bubble in 2006 (see David Learah) and now they are trying to make up for it by being overly conservative. Classic. I would listen to investors with lots of money at stake in the market like Bruce Norris.

[quote=ctr70]Where is the inventory going to come from? I don’t see where.

-It’s not going to come from a flood of REO’s, the “next wave” that was always “just around the corner” never happened and was an urban myth
-Not going to come from builders, they can’t build that fast
-Not going to come from normal sellers, still not enough equity
-I don’t see a sudden rush of short sales, anyone who wanted to short sale has had ample chance the last few years
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FHA is where the new defaulters. Of course that’s government run and if there were foreclosures from FHA it would be coming out of HUD. Right now there’s nothing coming out of HUD and with government help I doubt there will be.

I figure those that really want to buy will do so in the next year or two and then we’ll have a pent up demand to sell from all the sellers hoping to sell for higher prices. Unfortunately I figure the buying pool will be pretty small at that point and sellers will have wished they sold when things were good in 2012-2013. It always seems to work out that way.