[quote=AN]bearishgurl, What you’re saying is price is the owner has equity, so they don’t need to sell. Which is true, however, that doesn’t change the market price. Comps are not skewed, it’s just the current value, whether you like it or not. If you have equity, you have the luxury to wait for the market to rise again.[/quote]
Yes, comps in CV West ARE skewed because there aren’t very many nice properties to choose from right now in CV west. I don’t know by how much they are skewed, though. It is true that the market price of what is selling IS the current market price. But what seems to be primarily selling are mostly former rental houses and beaters for rock-bottom prices. The lots are large and they can be remodeled.
I haven’t done any studies to see if there is a lot more SFR inventory to choose from in PQ than 91910. When buyers look at Chula RE, they have five zips to choose from. 91910 has the oldest inventory, then 91911, 91913, 91914 and 91915, in that order. They can also consider Bonita if they are not stuck on “newer” construction. The ratio of owners free and clear to encumbered owners follow the same order, highest to lowest, with Bonita inserted in there bet. 91910 and 91911. More buyers seem to prefer newer over older. There are more younger buyers than older buyers and most don’t seem to care about the size of the lot, either. Older people don’t move as often.
I don’t know if buyers who go to PQ to look at RE are considering other zips close by or just stuck on preference for PQ. I also don’t know how many out of the 100 properties that sold since 3/26 in PQ were distress sales.
AN, look at this current list of foreclosed properties for 92106.
These are properties which are already REO’s and may or may not be on the market yet.
I’m using these two zips because one zip is VERY stable with a high percentage of unencumbered properties and the other zip was all purchased during the bubble with the loan products prevalent at the time so their foreclosure lists are in stark contrast to one another.
My point is, in zips with a high percentage of unencumbered property owners with a lot of equity, there isn’t very much on the market so whatever is selling comprise the “sold comps” right now (must-sells). That skews the comps because all the valuable well-maintained-by-owner (not bank) properties are off the market.
Who in their right mind would try to sell in this market if they don’t need to??
