Real estate Inventory slips in San DiegoReal Estate, Bottom Highlights Thursday, March 17th, 2016
If you’ve decided a home in San Diego is on your wish list, you’re not alone. When you go out shopping you will find that inventory of homes in every category, both single family and condos, is awfully low. Zillow’s latest report quotes an over 30 percent decline in housing on the market in the calendar year 2015 with a mere 5,617 offerings for sale.
To contrast this with other markets, Miami has over 37,000 units for sale and Phoenix over 19,000; these due both to excessive overbuilding in recent years, and perhaps some reservations about hot climates.
On the other end, Seattle saw a significant dip in inventory with only 7,300+ units on the market.
So what does this shortage of inventory bode for sellers and buyers in San Diego? If you’re a seller, this is good news. With so few properties on the market, there is a veritable swarm of potential buyers when the house hits the MLS. These hungry shoppers are apt to bid the selling price even over the asking price, and to literally swoop in with an excellent offer. They know that if they hesitate, they will just be out of the picture and alas, have to go through the same procedure the following day.
This tends to lower buyer expectations quite a bit, as good alternatives just simply do not exist. They’re in a tough spot, with available mortgage money at low interest rates burning a hole in their pockets, and alas, nowhere to spend that money. Frustrating, to say the least.
In a sense, the low inventory scenario is a self-fulfilling prophecy as sellers who would like to take advantage of the high sales prices, just can’t find a house to buy themselves. They can sell, but if they can’t buy, they can’t move. So sellers are frustrated too.
Something has to give. Sellers may be holding out, expecting even greater gains, but finding the perfect moment to sell a home is always dicey. At some point, sellers just have to jump, just like buyers have now learned to do. With over 4,400 sales in San Diego in June, inventory is less than a two month supply. Analysts say six months is about right.
If you’re a buyer and not married to San Diego, there are alternative locales with less stressed markets. You can try Los Angeles where supply is down, but only by 7 percent, not 30. Values are up though, about 2.6 percent.
Other popular haunts include Charlotte, N.C., with inventory down almost 40 percent and San Antonio, down over 31 percent. Or there’s Austin, Texas with a rousing inventory that is up 30 percent and average values are still in the $200,000s.
But if it’s San Diego you crave, you’re stuck. Put on your best smile; load up your pockets with dough; go shopping, and when you find something that’s well, remotely close to what you had in mind get up your courage and leap. That’s what you get for loving a town that everyone else is also crazy about. Tough luck!
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