Inventory Down Across San Diego County
The biggest surprise for today’s home buyers is the shockingly limited amount of available inventory across the county. This is something I have been sensing for months but it is now without any doubt a reality. In fact, I dare say that San Diego is turning into a seller’s market.
Sound completely incongruent with news you hear on TV and in the papers? Well just ask anybody that has looked for a home in the past few months and you will not believe what they tell you. Truth is that even the national media is starting to come on. The April 27, 2012 issue of the Wall Street Journal ran a story on its front page si-highlighting the fact that inventory is own and that bidding wars are back across the country. This is especially prevalent on the coasts.
Home buyers today will tell you of how they just can’t find a home they like and once they do spot one there are bound to be multiple offers within days. Cash buyers acquiring distressed properties will tell you how they had to let a potential deal go they really wanted because it got bid up too high by the competition. Luxury homes buyers in communities like Santaluz or La Jolla will tell you they are having trouble finding a good property that makes sense for their family. That there is not a lot to choose from and the good ones go fast.
This is happening in almost every San Diego neighborhood for a number of reasons. Here they are:
- Sellers that have not been willing to meet today’s prices have simply taken their home off the market in hopes of higher prices in the future.
- Other sellers have been willing to drop their price to meet the realities of today and have found that there are plenty of buyers out there ready to purchase well priced property. In fact, the often end up with multiple offers and are surprised by how fast their home sells. This has brought inventory down.
- There have been virtually no new home communities to break ground over the course of the last three to four years up until very recently when we have started to see signs of new activity. Nearly all of the new home developments in San Diego over that time frame got their start prior to the crash.
- Banks have been slow to release their inventory since the robo signing scandal took hold about 18 months ago. However, that case has recently been settled and we may start to see more foreclosures hitting the market. However, San Diego does not have anywhere near the level of distressed properties as do other parts of the state. In fact, new bank owned inventory may very well be welcomed by the market as there is not enough to satisfy the appetite out there for San Diego Bank owned homes and condos.
These four elements have worked to bring inventory levels down to amazingly low levels. In fact, some neighborhoods, such as La Merida in Scripps Ranch, literally have nothing for sale. I know because I listed a home there a few weeks ago and was flooded by desperate home buyers that could not get in to see it fast enough. We were in escrow within three days with multiple offers.
Now, of the above four factors contributing to fewer homes for sale, two of them are going to start to change. New home builders are going to start kicking off new projects as they become more and more confident about the recovering real estate market, and banks are going to start releasing the inventory they are holding and inevitably have to unload sooner or later. However, as touched on above, any active full time working real estate agent such as myself can tell you that a little more inventory will be very welcomed by our clients who are having a lot of trouble finding the home or condo they want. It is ultra competitive out there right now and the good well priced properties are moving so fast that it leaves both the buyers and sellers in shock. I am personally ready to welcome new inventory to our market.