This conversation has centered around the vast sea of pent up demand that sdr and others have told ad nauseum. I would like to propose a rationale for why this demand has little effect on driving prices up, rather they drive it down.
You have all mentioned how there is this large pool of buyers waiting to buy, with the added caveat, “well priced homes.” You are essentially stating that people are not going to pay fair market price based on comparables. They want less than the FMP.
So I pose a question, what happens when some of those homes are bought at less than FMP? Is the sea of demand satiated at this new comp price, or are they going to be screaming for “well priced homes.”
I have a strong feeling the latter is true. There are always people searching and willing to pay for a “deal.” Look at the dagger catchers of 2007-8. But when enough people get a deal, it is no longer such and a new deal value must be struck.
Note, this may not be true in every neighborhood in SD…so please do not give me countless examples of bidding wars on homes.
