Where Have All the Sellers Gone?
Followers of the market report know inventory in San Diego County has been at or near the low end of the spectrum for the past year.
This has had a salubrious effect on prices. The median price for single-family, re-sale homes is up 10% year-to-date, using a 3-month moving average.
The 3-month moving average median price is up 26% from the bottom of the market: March 2009.
Which brings us back to the question, “where are all the sellers?”
You can forget about the banks. There is no “massive shadow inventory” that will suddenly increase inventory. Currently, banks own about 3,562 properties in the county, which is about six weeks of inventory, if they were all dumped on the market at once. Only 1,131 homeowners had a notice of default filed in September, while 1,345 homeowners had a notice of sale filed.
The only other explanation for low inventory is homeowners who are underwater and unable to sell unless they do a short sale. Rising prices will mitigate this problem and more homes will be coming on the market. That will take awhile, because we’re still 35% off the peak price reached in July 2006.
For the foreseeable future, we will have rising prices fueled by lack of inventory and multiple offers.
With money at an all-time low, and property prices 35% below their peak in 2006, those who have cash or can get a loan are in prime position to make a purchase.
September Market Statistics
Sales of single-family, re-sale homes were off 14.1% year-over-year.
The median price for homes rose 10.1% year-over-year. Year-to-date, the median price is up 10%, using a 3-month moving average.
Inventory was off 44.6% from last September.
Pending sales were up 0.8% year-over-year.
for homes dropped 1.8 points to +1.1. Condo sales momentum dropped 1.6 points to –10.3.
continued moving upward in September, gaining 1.6 points to –2.7 for homes. Condo pricing momentum rose one point to +1.4.
sales momentum by using a 12-month moving average to eliminate seasonality. By comparing this year’s 12-month moving average to last year’s, we get a percentage showing market momentum.
The median price for condos gained 12.2% year-over-year. Sales were down 19.5% from last September.
This is an extraordinarily tough market for buyers. It’s important to be calm and realistic. If you don’t know what to do or where to begin, give me a call and let’s discuss your situation and your options.
Rick Campbell writes and publishes the San Diego Real Estate Market Trends Report.
Rick is a California licensed broker since 1991: CA DRE #01114738.
He actively sold real estate in Bel Air and Beverly Hills.
Rick now devotes his time entirely to the Real Estate Report.