It seems like the San Diego real estate market has been a buyers’ market since the crash the end of 2007. With low interest rates, plenty of inventory, and low housing prices, buyers have been in control for quite some time because they’ve had their pick of available properties and motivated sellers. With thousands in foreclosure or short selling, it seems as if San Diego real estate inventory would continue to go through the roof, leaving the market wide open for buyers and a tough go for sellers.
In a previous blog Feb. 4, 2012 I wrote aboutSan Diego Housing Inventories dropped drastically, I mentioned the previous average number of active homes in all of San Diego County real estate MLS (multiple listing service) was 11,000 to 12,000 since the end of2007.
The current number of active homes in all of San Diego Countyjust dropped again.
| Date | # of Active homes and condos for sale |
| Mar 1. 2012 | 7333 |
| Feb. 4, 2012 | 7,879 |
| Dec. 2011 | 9,161 |
| 2007-2011 | Average of 11,000-12,000 |
Typically as the inventories in San Diego decrease below 8,000 the market goes from a buyers market to a sellers market. The national market trend has a similar trend. Good deals in this market can also mean multiple offers.
If you’re considering selling your San Diego property, however, I’ve got some great news! Conditions are rapidly changing to favor sellers. How, you ask? The answer is really quite simple.
Foreclosures are being released onto the market quite slowly and being snapped up by bargain hunters. Bargain hunters are bidding early on San Diego short sales in search of a great bargain, as well, so those properties are disappearing almost before they hit the market. At the same time, banks are holding onto “shadow inventory” in order to keep their stocks from becoming devalued, disorganization, and political pressure. House flipping has slowed because profit margins are so thin, meaning there are fewer flipped properties on the market, as well. In fact, many who would have previously flipped real estate may be holding onto it and renting until the market picks up or getting out of the game altogether.
Because it’s an election year and nobody wants to be the one forcing people out of their homes, the government is pressuring banks to modify loans for delinquent homeowners rather than pushing a short sale or foreclosure. Likewise, homeowners facing foreclosure have gotten much more savvy about gaming the system, and some are managing to stay in their homes rent-free for months or years before the bank finally forecloses or they are forced to short sell. All of these factors create a perfect storm, where inventory finds its way onto the market very slowly – a situation that is quite different from the flooded markets of 2008-2011.
Inventory is only half of the picture, however. At the same time that listings are slowing, more motivated buyers are entering into the picture due to record low 30-year fixed interest rates (below 4 percent!), record low home prices, and an uptick in employment. The result of all of this is an influx of available cash to purchase San Diego homes with decreasing availability of properties for sale.
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