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Real Estate Recovery – Is it Too Strong? Where are the Sellers?

Real Estate Agent with Realty One Group - www.FindCARealEstate.com BRE# 01708749

December 13, 2012 11:20 PM

Real Estate Market on Fire In California and most parts of the country the real estate recovery is well under way. No doubt that local market conditions vary from one area to the next but most would agree that the majority of the regions are well on their way to recovery. In Southern California I am concerned that the recovery is simply too strong? There is a drastic shortage of inventory of homes for sale and an equally drastic in-balance in supply vs. demand – maybe one of the greatest seller’s markets of all time! So where are the sellers?

Record low interest rates are certainly a key factor driving buyer demand but as prices escalate we are not seeing a proportionate number of sellers come to the market. This may be partly due to the fact that homeowners are well aware of the fact that inventories are extremely low and have real concerns that they will not find their replacement home. Just how low are home inventories? In a few communities that I serve they are well off “normal” inventory levels:

· Dana Point has only 7 active single family home listings under $600,000

· Mission Viejo has only 26 active single family home listings under $600,000

· San Juan Capistrano has only 8 active single family home listings under $600,000

I am cautiously optimistic that the New Year will bring equity sellers out of the woodwork. With prices up close to 20% over the past year in many Orange County communities, it is a great time to be a seller. While there are no guarantees of finding a replacement home quickly, selling and renting for a short period of time can be a very good strategy. For those sellers sitting on the fence, keep in mind that record low interest rates – a key component of this seller’s market – can easily disappear. A ½ point increase in interest rates will make your home close to 20% more expensive for a potential buyer. Now could very well be the perfect time to sell and buy your Orange County home!!

David Grbich is the Broker Owner of San Juan Capistrano based Ventana Coastal Properties. If you are looking to buy or sell a home in Orange County I would welcome the opportunity to work with you. I can be reached at 949-500-0484 or via email at dave@ventanacoastalproperties.com.

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Anonymous

Heather Upton

The longer we wait now, the further away that train will get and the harder it will be to catch. This low inventory is pointless; it makes no sense & if our elected officials do not make decisions now. Our industry & our Country deserve to have a strong Real Estate Market in 2013 extremely low inventory is not helping our clients or us make that a reality. Again outside influences are making this much more difficult than it needs to be.

The inventory is out there but Government inserting themselves is not helping the housing Market recover, its delaying it. Our industry is already complex; how did they manage to make it more complex?

We need to work together & get involved by contacting our Elected Officials, & stressing the importance of homeownership in our wonderful country; that "homeownership Matters"

We have to take a stand so our clients; especially sellers are comfortable with the decision to list their homes. & we can return to having a balanced inventory. So much of our business in the Inland Empire is distressed properties; a homeowner who lists today might close escrow midyear 2013; half way through the year; many of our clients who are distressed homeowners have signed listing contracts with us in the past two months have decided to hold off until our congress decides on the future plan. No one anticipated they would take so long to reach an agreement.

If our small office is experiencing owners holding back than im sure it’s happening all over, There lies the problem. Politics influencing our business & it’s managed to get worse…. Shocker.. The ridiculousness in our area of the inland empire is that we have the inventory, between short sales, REO’s, Standard sales we have the supply to meet the demand, its being artificially held back. Inland empire has a lot of sitting inventory. Many underwater homeowners are ready to sell & move on with their lives but understandably are on the fence because there could be tax consequences etc. ….Waiting, & waiting for Washington to get a plan in place. How is this helping us again? What’s the point of having values go up but there is no homes for people to buy & sell?.

Let’s take a stand & not tolerate politics to continue to affect our wonderful industry of helping clients buy & sell. Real Estate plays such an important role in our counties recovery; and the American Dream so why it’s on the chopping block because of reckless government spending? We realtors don’t get all the perks & kick backs we work hard, we make money; the way it should be. Home ownership/Real Estate is so important. Let’s take a stand. Thank you!

Dec 15, 2012 05:28 AM

#46

David Evans

RE/MAX TOWN AND COUNTRY - Cumming, GA

HUD NLB Cumming GA

All we see here is lack of supply and over priced listings. Rates are low but that is all that is good right now. The few priced right listings have 10 offers on them and are very hard to get for your buyers. What we really need is some orange county equity rise, and that would wake up our retail market and start some form of recovery. Until then it is foreclosure and short sale chasing like the last 4 years...

Dec 15, 2012 06:46 AM

Kimo Jarrett

WikiWiki Realty - Huntington Beach, CA

Pro Lifestyle Solutions

I think Californians are being cautiously optimistic about their personal economic and income situation. The median price of inventory is rising as investors and movers purchased most all of the distressed properties.

Californians are concerned about the state's government fiscal irresponsibility and the effect it might have on their own income and sustainability, therefore they're reducing their debt service and purchasing only essential goods and services until they are very confident about the economy.

There are more people leaving the state of California than entering, as much as 162k differential in November, so the economy is stagnant and that's the effect on the RE market in my opinion. Most people don't believe in trickle down economics, yet it works both upwards and downwards and until the perception of the future grows positively optimistic, the RE inventory will be stagnant too, especially in California.

Dec 15, 2012 06:49 AM

Dorte Engel

RE/MAX Leading Edge - Bowie, MD

ABC - Annapolis, Bowie, Crofton & rest of Maryland

Dear David,

That is what I hear from aquaintances looking in your area. Hopefully, there will be more homes available in the coming year.

Dec 15, 2012 07:40 AM

Rob Arnold

Sand Dollar Realty Group, Inc. - Altamonte Springs, FL

Metro Orlando Full Service - Investor Friendly & F

Sure would be nice to see prices rise. Then equity sellers can actually sell and move on to other places. There is a lot of shadow inventory from people who are just waiting until prices rise so they can get rid of their property.

Dec 15, 2012 09:15 AM

Roy Kelley

Realty Group Referrals - Gaithersburg, MD

We have a very low inventory in our Maryland market. Many sellers are waiting for higher prices.

Enjoy the holiday season with your camera in hand.

Dec 15, 2012 10:05 AM

Frank Castaldini

Compass - San Francisco, CA

Realtor - Homes for Sale in San Francisco

What a great question. I don't know if it too strong, but inventory level have certainly plummeted. We have about one month of inventory in both single family and condo inventory. Supply and demand balance indicated higher prices. As price rise we should see more sellers surfacing. I do have some great llistings coming in the beginning of 2013.

Dec 15, 2012 12:02 PM

Farooq Khan

5 Star Realty Partners - Newark, CA

Real Estate Broker/Owner - CDPE

David, Your observation is correct that there is a shortage of Active listings on MLS. But look at the pendind listings, Most of them are short sales subject to lender approval. Thats the hidden/shadow inventory which will linger on for some time in California.

Dec 15, 2012 05:33 PM

Richard and Jean Murphy

Harborview Properties - Portland, ME

(207) 712-4796

All good information and we are happy to see the direction our industry is going. Cautiously optimistic is how we operate and are trying to make the most of these market conditions.

Dec 15, 2012 06:48 PM

Jamie King

Hoty Enterprises, Inc. - Huron, OH

Sandusky, OH

The same is true in Ohio. Plenty of buyers, but few sellers. Many that needed to sell, have sold. Those that just "opt" to sell can't find a replacement home or they prefer to wait until home values rise. Supply and demand is definitely skewed!

Dec 15, 2012 08:48 PM

Trey Swain - Your Savannah Real Estate Expert

Savannah Real Estate Experts - Savannah, GA

Work With The Experts!

Inventories are also dropping significantly in the Savannah, GA market. Agents should definitely beshifting their focus ahead of the market, but there may still be time to change your target audience and benefit from this seller's market!

Dec 16, 2012 12:50 AM

Mike&Marie Edwards

Estes Village properties & Plains Real Estate in Greely/Windsor - Fort Collins, CO

"We Bring You Home To Colorado"

That's great news for your area. We're in Fort Collins. CO and seem to have a shortage in certain price points also. We are a much different market than yours. Right now we have 22 listings that are 3bedroom/2bath between 100,000. - 200,000. and exclude short sales.

Dec 16, 2012 05:05 AM

Bob Miller

Keller Williams Cornerstone Realty - Ocala, FL

The Ocala Dream Team

Hi David, we agree with "where are the sellers?" Appraisals are dampening a price explosion here in Florida.

Dec 16, 2012 07:07 PM

Jeanne Dufort

Coldwell Banker Lake Country - Madison, GA

Madison and Lake Oconee GA

wish we had that problem, but in my local market we are still experiencing high inventory levels, except at the lowest price points.

Dec 17, 2012 12:13 AM

Ric Mills

Keller Williams Southern Az - Tucson, AZ

Integrity, Honesty, and Vast Real Estate Knowledge

It is the same here in Arizona. We went from Glut to Shortage in less than a year. Hopefully 2013 will bring more regular sales on the market. There are still a lot of short sales but that number is ging down also.

Dec 17, 2012 01:26 AM

Nina Hollander, Broker

Coldwell Banker Realty - Charlotte, NC

Your Greater Charlotte Realtor

We've got the same issue in Charlotte, NC--seriously shrinking inventory that is quickly putting us into a seller's market. Buyers just don't want to believe it! We've had good steady increases in prices, but they are not yet running away with themselve. It's mostly finding the inventory. And if you're a seller, priced and marketed right, you will sell quickly.

Dec 17, 2012 03:11 AM

Victoria CB Trees

Victoria CB Trees Real Estate Services - Chiloquin, OR

Principal Broker

I think of three things about why more sellers are jumping to put up For Sale signs... 1) they're still under water with their loans and don't want to go short and 2) many are still owned by banks/loan companies and haven't rotated through the system and 3) when prices are on the rise it's a bit of a risk for a seller to sell low and buy high, later, when they can find a replacement.

A fourth thought... lots of investors bought and are using them for rentals, and they haven't adequately depreciated them out yet?

Dec 17, 2012 04:39 AM

David Grbich

Realty One Group - www.FindCARealEstate.com - San Juan Capistrano, CA

Orange County Real Estate - 949-500-0484

Thanks to all for your comments and really looks like we have a strong recovery underway in most parts of the country. In my area I really think it is a severe lack of inventory causing prices to escalate vs. solid fundamentals - will be very interesting to see how sustainable the current market is - happy holidays!! Regards Dave

Dec 18, 2012 05:40 AM

Gene Riemenschneider

Home Point Real Estate - Brentwood, CA

Turning Houses into Homes

Dave,

I do think the banks are holding back inventory. However, there are plenty of buyers. Putting more homes on the market might slow down the price increases, but not stop the upward trend for a while.

Dec 27, 2012 03:32 AM

David Grbich

Realty One Group - www.FindCARealEstate.com - San Juan Capistrano, CA

Orange County Real Estate - 949-500-0484

Hi Gene, agree that buyers can absorb any inventory the banks throw at us and hope they do! Regards Dave

Dec 29, 2012 12:08 AM

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David Grbich is the Broker Owner of Ventana Coastal Properties serving the needs of buyers and sellers in Orange County, CA. David is Ranked #1 Agent in the San Juan Capistrano area per ActiveRain.

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