photo credit: christopher.woo
I couldn’t have said it better. Jim Klinge prognosticates on our 4th quarter housing market, and it sounds a lot like the conversation Steve and I have been replaying over the past couple of months.
My personal favorite concerns the first-time home buyer tax credit. Whatever happens, whether it is extended or it goes quietly into the December night, things in the lower price ranges will necessarily settle down. Finality does that; gone is the sense of urgency.
But, all price ranges are not created equal. What I am seeing is the big squeeze. Put another way, homes at the lower price points being more affordable and therefore enjoying the greatest demand are the stuff we are hearing about, with their attendant multiple offers and feeding frenzies. The problem with so many of these properties is that they are dead-end streets. Buyers are moving in but no one is moving out (think short sale or bank-owned), which leaves us one moving van short of a normal market.
This has become a problem for the mid- and high-priced homes. Demand is less, and a smaller buyer pool can wreak havoc on prices and market time. Fortunately for these sellers, inventory is low, but it is low for all of the wrong reasons; too many would-be sellers don’t have the equity position to make the move they might otherwise have, so they stay put.
Here is how the numbers look for two price segments (selected at whim by me because I said so). These visuals are for all property types in the I-15 corridor zip codes of 92127, 92128, 92129, and 92131. Don’t try to read the numbers – you can’t. What we are looking at are the trend lines.
UNDER $700,000
Keep in mind the market time trend line is a little funky. Those short sales hang around in “pretend active” status for months waiting for bank approval even though they have offers “accepted” first week or first day.
OVER $700,000
A better man would have superimposed the graphs so you could more readily spot the differences, but a better man has to shove off this morning to meet the termite guy.
ABOUT THE AUTHOR Kris Berg is Co-Owner and Designated Broker of San Diego Castles Realty. If not-so static web sites are your thing, go here at once where you will find loads of real estate information including homes for sale, market trends, floor plans and more. Kris's hobbies include fencing and spot welding. She likes kittens. 
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{ 8 comments… read them below or add one }
I’m seeing the same sort of thing in Northern Virginia. If you picked the $500k price point it would be quite a bit more dramatic.
I love it that you can actually spell, Kris. Few bloggers understand “wreak.”
Is it intentional that the anti-spam words for your comments are all RE-related? The last two were “rent” and “move.”
Kris -
I’m sure this is true in most areas of the country. I know it is in little ole Kokomo, IN – price points are just different.
Doesn’t everyone deserve a home?Wall street schiesters get 700 bill and you cant even give a hard working american a home?Why is it the working man always gets screwed?I see a pattern here.
Kim – Coincidence. My word is “Dan.” (Maybe Dan is thinking of buying or selling.)
Betty – I am hearing this trend from all corners. I don’t think it is an anomaly.
CAB – A lot of our clients share your frustration. These are odd times.
One other trend – Many of those would-be sellers in the mid-to-higher price ranges who have less (or no) equity are, in fact, moving due to the normal reasons. But instead of selling their home, they are renting them, thus creating a bit of a rental glut (and an inventory shortage of for-sale homes). Add this to the higher than normal number of investor purchases in the more affordable price ranges and we are heading toward a softer rental market.
So what is going to happen in March 2010 when the Fed’s stop buying mortgage-backed securities… who is going to step up? They have been the buyers keeping Fannie and Freddie working. The Mortgage Bankers Association has some interesting data that indicates a bit of a bump in the road if/when the Fed’s stop buying, as they plan to, early next year.
Oh, that’s right, Californians pay cash for real estate.
Great charts I will come to this blog more
Alex Curtis in San Diego