December 1, 2012
As many of you know, I have been complaining about the lack of inventory available for home buyers in San Diego County for several months now. There are currently 3347 single family homes and condos for sale in San Diego County. 2480 Homes sold during the last 30 days. 2739 homes sold the 30 days prior to that. This is still off from the numbers I was seeing during the bubble, around 5000 sales a month. However, some factors spurring the current market are:
• Interest rates are at an all time low. • Homes are more affordable than they were just a few years ago. • Home prices have not only stabilized, but appear to be on the rise again. • Financing is once again available for qualified buyers.
Now here is the really interesting bit: only 1474 homes were put on the market in San Diego during the last 30 days and only 836 the month before and only 645 homes were listed during the 30 day period prior to that. So why is nobody selling? People are still getting job transfers, families are still expanding and needing more space, people are still retiring and wanting smaller homes, all of the reasons for people to move are still in place. Well, for starters a lot of homeowners still have negative equity.
Negative equity or owing more on your home than it’s worth, is preventing many homeowners from selling. However, with the recent increase in demand and resulting increase in home prices the gap may not be as wide as many people suspect. Furthermore, most people are unaware that it is currently possible for a homeowner to sell their home for less than they owe and still qualify for the purchase of a new home concurrently. Selling your home for less than you owe on it is referred to as a “Short Sale”
The federal government put all kind of programs in place to help homeowners who became distressed or developed negative equity during the recession: Making Homes Affordable, HAFA, HAMP, PRA, 2MP and HARP to name a few. Some people really benefited from these programs. However, it seems that once again the “Invisible Hand” has created a once in a life time opportunity for people to escape negative equity and make a secure purchase in a safe investment that not only provides a solid return, but a place to call home as well.