Steve - historically, doesn't inventory increase in the spring and summer as people move when kids are not in school?
Looking back decades, yes. Looking back the last few years, no.
I created a chart here (or is it a graph) which shows how many homes were on the market in each of the past 10 February's. I didn't have time to make it nicer.
I still think this is false hope and troublesome when so many of the buyers are investors. For various reasons, I don't see that as a solid foundation. So, "real" owners are, once again, settling for inflated prices being driven-up directly and indirectly by these investors and someone at the bank is, once again, approving loans at these prices that I don't think would be sustained if the investors stop being as active or, as happened in many cities a few years ago, they start selling and there aren't as many buyers anymore and prices drop a little and they get freaked out and start, once again, dumping to cut their losses.
I think we'll be ok if it is a quick jump to get back to a reasonable price (which is about where we are at, I think) and doesn't continue to get crazy like it did before.
I hope I'm wrong, but my highly calibrated spidey sense is tingling. Although, my underwear are a little tight today, so it might be a false alarm.
Many folks are going along with the line of thinking that this is really a case of getting back to more reasonable values than it is an indication that prices are going to soar.
While there are many 'buy and hold' investors out there, there are also many first-timers, relocations, downsizers and folks returning to the market after foreclosure or short-sale.
The competition changes by price-point and market. For example, most Folsom and El Dorado Hills sales are over $300K, and most would not be attractive to investors due to the monthly payments vs the rent they would bring. Sellers will still get multiple offers on them, however, because they are affordable to so many owner-occupant buyers.
I listed a property in El Dorado Hills for $399K last month. In 3 days I had 3 offers, all over asking price. Final price $425K.
On the hand, people trying to buy in Elk Grove are facing fierce competition from big-time investors, small investors, flippers and a slew of first-timers.
One agent I know listed a home in Elk Grove for $150,000. He had 70, yes, 70 offers on it. He said that from his recollection, less than half were investors.
These 2 examples tell me that even without investors, there is a lot of demand....today.
It's just a perfect storm or low prices, low rates, a lot of buyers and very little inventory.
