“At these prices, where are all the fence sitters, waiting to jump into the market?”
CityD,
Some thoughts that come to mind.
1) Our saturation of people who wanted to own (buy a
home on credit) rose to something like 75%. Please validate my estimate. So one point is that all the people who wanted homes, bought homes.(purchase a home on credit)
2) Fence sitting, is not an easy thing to accomplish. When you want an iPod in the US, you go buy one. Flat panel TV, same. Home, same. It takes discipline to fence sit, and that is not a characteristic commonly found in the US. So,
my WAG is that as a percentage, there aren’t that many fence sitters out there. And, the ones that exist, aren’t going to jump in too early.
3) There are now more people who a) can’t affort a home to begin with due to the astronomically high asking prices compared to salary. b) More people are now walking around with bad credit scores, loads of debt or even a foreclosure or bankruptcy. Banks are paying attention to this now (what a concept)and not freely giving loans out to anyone who walks through the door.
4) As a fence sitter, I can tell you it can be brutal. Especially if you and your spouse don’t see eye to eye on it. (If we don’t by now honey, my friend says that we’ll never be able to buy…..). This is a tough one to negotiate, and there is also peer pressure from friends, relatives, and coworkers. We should all have enough self confidence to chart our own course, but most often, we go along with the pack.
It would be interesting to see the total US and San Diego percentages of home ownership (Owned, or purchasing on credit) for each year for the last 20 years. I believe the percentage exploded in the 2000 and an on years, largely due to loose credit rampant RE speculation. With a saturated “owner” sector, there aren’t as many people buying – they have already purchased, and are either happy or just plain stuck. Those who have purchased (loved) and lost (foreclose, short sell, etc) have a bad taste and aren’t likely to purchase again, even if they could. Bubble sitting is a difficult posture to maintain, and few can endure it, they are few and far between.
