Interesting article out of Southern California recently.
They’re looking for housing inventories to rise. And it some cases it looks like it’s already starting to happen.
One person wrote from San Diego:
“Lots of houses are coming on the market now where I live in San Diego. The most I’ve seen in years but they are all listed at the highest prices I’ve seen since the crash. The prices are not dropping one bit either, but nobody is buying them anymore. They just sit on the market for a few weeks then the seller removes them.”
I find this interesting because California is often times the canary in the coal mine. That is, stuff happens first there and moves east.
From the piece:
“There has been a distinct momentum shift that has come from two major events in the mortgage markets. The first had to do with FHA insured loans becoming incredibly expensive even though these products are targeted as options for working families. As if a working class family is really in the market for a $729,750 property (the FHA max in high priced markets). That is one event.
The second larger event has to do with the Fed hinting at a QE taper which sent the mortgage markets into a tizzy. This has definitely tempered the nearly unrelenting real estate mania that has been gripping the country. Incredibly, even after the quick turnaround in prices 14 percent of US homeowners with a mortgage are still underwater.
Banks have leveraged a low supply market coupled with selective disposal of properties to their advantage. However, with inventory now rising thanks to the quick turnaround you are seeing some brakes being applied to this market.“
Personally I’m all in favor of rising inventories, because that will bring prices down, which helps everyone who is buying rental properties.
What’s your take?
You can find the article here: