Some areas have less than a month inventory

[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.

Makes me want to flip my house, except that I like it here and don’t want to move, and there are basically 0 nice houses on the market in the 550-700 range that I like, which is why I posted earlier about building one.

I see the same huge decrease in Linda Vista and western Claremont. Point Loma inventory is also way down, but not quite as much, and PB/La Jolla/UTC seem to only be down 20% or so. It is stange to see such a big difference in the central coastal areas.

[livinincali]

[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.
[/quote]

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.

[an]

92126 inventory problem is even worse than OB. July 2011, there were 165 SFR and 65 condos. A year ago, there were 90 SFR and 36 condos. Today, there are 22 SFR and 7 condo. I too wonder how long this will last. This spring should be interesting.

[gzz]

Prices right now seems to be about 10-15% higher than a year ago. I might be priced out of what I want, which is an updated 2 story with 2+ baths and a view on a full lot. Several of these sold for around 600-700 in 2011 to mid 2012. Now there are none on the market at this price and the closest are 800k+. 160k downpayment and then paying jumbo rates are beyond my budget.

[SD Realtor]

I agree with the inventory and price assessments. It is a very frustrating time for buyers and I don’t see it changing at all in the near future until rates move. Bodes well for those who have purchased in the last few years. Does not bode well for families looking to buy a home/condo for themselves or for a long term investment.

[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

…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.

[carlsbadworker]

[quote=ctr70]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.[/quote]

Technically, RE is not a bubble when the mortgage payment to rent ratio is in multi-years low.
Bond however is a different story and it may be the most damaging bubble that we ever see.

[Jazzman]

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.

[an]

[quote=Jazzman]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 [/quote]
According to redfin, in December 2011, the San Diego county sold $/sq-ft was $198. Today, it’s $220. That’s 11.1%. December 2010, it was $212, which is 3.7% increase over 2 years. But we all know price came back big time w/in the last 12 months while it declined through the last 6 months of 2011.

[ctr70]

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.

[ctr70]

[quote=Jazzman]

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
[/quote]

I have heard the two best minds in the state of CA regarding the housing market, Bruce Norris of The Norris Group and Sean O’Toole of foreclosureradar.com speak in person. And they say there is no wave of REO’s coming (in California at least). The REO listing agents have actually laid off all their staff and many have changed careers because the banks are telling them there is NO inventory coming. Also, it’s a total myth that banks are “holding on to a ton of inventory”. Yes they are letting people squat in their homes for 3-4 years not making payments, but they are not physically holding on to inventory.

Another thing is with prices rising this year and next, it’s creating less underwater owners. And it’s creating a psychological change with owners. Home owners are now getting hope they may be able to sell some day without losing money, so they may decide to make their payments and keep their property. Rising prices creates a positive domino effect with less owners underwater + construction starting up and creating jobs.

I’m saying all this being a huge housing bear myself. Bruce Norris was the most famous housing bear in the state in 2005 writing reports and speaking throughout the state telling people to GET OUT of the market. He is a contrarian thinker. And he is predicting prices to rise very steadily in CA the next 3 yrs due to no relief in site for low inventory issues + low rates for the foreseeable future + boomerang buyers coming back in the market.

[ctr70]

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.

[ctr70]

It’s amazing to me that everyone criticized & demonized Greenspan so intensely for keeping rates so low for so long and playing such a big part in the housing bubble, yet Bernake is doing the exact same thing now. No way prices would be rising if 30 yr fixed rates were at a long term average of 6-8%. With a 3.5% rate right now, they are going to have to stay low for a long, long time for prices to keep rising and not fall. Or we would need incomes to start rising at a healthy clip to accompany a rate rise & house prices to not fall.

I mean freaking 3.5% 30 yr fixed. This is not even close to anything anyone has seen since the 19th century!

[livinincali]

[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
[/quote]

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.

[Jazzman]

I agree with livinincali there definitely seems to be time lags produced by buyer and seller perceptions which affects supply and demand.

Ctr70 the median can prduce results all over the shop. Look at Rich’s comments for condos recently. I’d definitely put more weight on CS. The question of where is the inventory going to come from, is answered by where did it go? I don’t see why CAR’s seemingly ‘negative’ comments should be dismissed since they have an interest in pushing for a recovery.

While I share your views on the craziness of low rates, I don’t see it as a cause to celebrate.

[Author]

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