Blog Entry Nov. 2, 2008

 

It’s a “Buyers Market” so where are the buyers?

 

 The prices are down. Here in Oceanside you can get a 3 bedroom 2 bath home from $180,000 to $400,000 (away from the beach). We haven’t had prices this low in 8 years. At the end of the nineties and early naughties buyers were driving up prices driven by the fear that someone else would buy it first. The “For Sale” sign was being installed and people were putting in offers. Today, house prices are down 30 % and buyers are waiting for another 10% drop.

Where is the logic?

First time homebuyers are scared. They’re waiting on the sideline to hear that the market has hit bottom.

As I searched for a property yesterday It was confirmed what I have been thinking for two months. Homes have been selling at an increased rate. The number of properties available to buy (active listings) has shrunk. The average days on market has shrunk. My search, in North County for 3 bedroom homes under $200K only produced a few choices. Most of the choices were for $199,999. Two months ago there were dozens to choose from.

Now unless we get an influx of new listings, especially new foreclosures, which have been driving prices lower, prices are going to start upward.

As I studied the figures from the San Diego Homedex Reports during the past six months, the movement is only slight. Days on market has only dropped from the high fifties to low fifties, March through August. During that time average home sale prices have dropped also.

 

I understand that to truly measure a trend, many criteria need to be measured. I have read RT entries discussing whether or not banks are placing low prices on listings, without the intention of selling. This throws off the “days on market” average. Also, if investors are the majority of buyers, how is this affecting next months sales? The economy, unemployment, inflation, rent prices; they all matter, how do we measure?

 

Will my clients want to buy now or will they wait until prices have outpaced their salaries?