What is driving the low real estate inventory we are seeing right now?
invite response
2012 Apr 23, 3:19am 23,613 views 61 comments
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GUAB
2012 Apr 26, 2:29am
It's not like I said there were no buyers -- I just said there weren't a TON of buyers. Homes up here still sit on market for an average of 60+ days. Suppose you could classify that as a "ton" compared to a few years ago.
Point taken. over $500k, there is zero investor demand, and thus a different market. Under $100K there is 20 days inventory, $100 to $300K about 1.5 months...
For the bay area reader, over $500K is luxury market here, you can buy a hell of a home and live a very nice life... My scottsdale home cost $230K, has 4 bedrooms a pool, 2 car garage and in a very very nice part of town...
Agreed. Yeah, I was figuring you meant a different price point and technically thus we were talking about two different market segments. I'm buying on the higher range of the market where I can get in at a solid price point while it's still possible without heavy competition. Less risk in the lower markets I assume. There's a lot of rental demand in that segment but not a lot of supply. Supply is dropping though up here quick -- and while I wouldn't call it zero demand for investors, it's certainly close enough compared to what you're seeing in your target market.
freak80
2012 Apr 26, 2:29am
For the bay area reader, over $500K is luxury market here, you can buy a hell of a home and live a very nice life... My scottsdale home cost $230K, has 4 bedrooms a pool, 2 car garage and in a very very nice part of town...
And it's 125 degrees F in the shade...
GUAB
2012 Apr 26, 2:30am
For the bay area reader, over $500K is luxury market here, you can buy a hell of a home and live a very nice life... My scottsdale home cost $230K, has 4 bedrooms a pool, 2 car garage and in a very very nice part of town...
And it's 125 degrees F in the shade...
It does get pretty hot here in the summer, lol. But I find it doable with misters and a pool. But come September I just want it to be over.
freak80
2012 Apr 26, 2:32am
But I find it doable with misters and a pool
Misters? A pool?
No wonder the Colorado River dries up before it reaches the sea.
GUAB
2012 Apr 26, 2:35am
But I find it doable with misters and a pool
Misters? A pool?
No wonder the Colorado River dries up before it reaches the sea.
Yep. Love me some misters and pool.
freak80
2012 Apr 26, 2:45am
Yep. Love me some misters and pool.
LOL. Only in America are we so prosperous that we can have water mist and pool in the middle of the desert. ;)
No wonder people in the middle east with barely enough water to drink hate us so much. :o
MisdemeanorRebel
2012 Apr 26, 2:47am
LOL. Only in America are we so prosperous that we can have water mist and pool in the middle of the desert. ;)
Yeah, America is the only country in the world that tries to grow Kentucky Bluegrass lawns with every desert home - at the same time declaring there is a freshwater crisis in the West.
Don't forget airconditioning expenses, in Phoenix you would have to run the Airconditioner 24/7 during summer and for a 2000+sqft home that would probably be very expensive. Many homes here in LA do not even have air conditioning since it is not needed.
GUAB
2012 Apr 26, 3:23am
We don't have to go to Arizona to buy luxury home for those prices. We have plenty of those here in the beautiful State of California. 5 bedrooms, 3 baths, 3 car garage, etc. for less than $200k. They're just located in the wrong cities about 1 to 2 hours from the beautiful Bay Area. :)
Yep, California is certainly a nice place to live -- but there are pro's and con's about both states (i.e., taxes being one of them -- my net income would be an additional ~8% lower if I lived in California). I wouldn't mind living in a nice area of the Bay area though if I could sensibly afford it and not have to change my lifestyle (I can't though).
Bermuda grass grows very easy and hardly needs any water. Not sure what you're talking about ;) Hardly any water does equate though to somewhat of an expense I guess though.. I think my water bills are usually about $90/month that includes watering, pool, spa, misters and 2 people living there.
AC isn't bad here if you have the correct facing view. I have a south facing view and my AC bill is only $150/month for a 2500 sq ft home -- in dead of summer. Now if you have a west facing view with windows -- you'll be double.
freak80
2012 Apr 26, 3:32am
AC isn't bad here if you have the correct facing view. I have a south facing view and my AC bill is only $150/month for a 2500 sq ft home -- in dead of summer. Now if you have a west facing view with windows -- you'll be double.
Paint your house white. Including the roof.
Or put solar panels on the roof and use the electricity to run the AC.
GUAB
2012 Apr 26, 3:52am
LOL that would be hilarious.
How quick do you think my HOA would be on my ass? God I would love to read how they would word that letter.
Solar panels aren't cost effective here yet in my opinion.
it's not entirely true that one does not need AC in California, it does get pretty hot here as well.. sometimes well over 90 in Summer and I have to use the AC and this is in Irvine...I do think that one would need it a lot more in Phoenix but the difference is not 100%, perhaps only 50% more. There is no doubt that one comes out way ahead financially living in PHX, the only thing I would miss living there would be the ocean.
The other thing is that PHX has dry heat so it's not as bad as was mentioned earlier.
2300sqft home in Northwood, Irvine (an upmarket area comparable to Scottsdale) would be around $800,000, property taxes with Mello Roos around 2% per year so $16,000/yr ;) Insanity? Yes :)
GUAB
2012 Apr 26, 4:27am
http://www.zillow.com/homedetails/77-Grant-Irvine-CA-92620/25515720_zpid/
Doesn't seem too terrible. 2500 sq ft, nice finishes. taxes are 8k/yr. asking 799 but zillow thinks 710.
freak80
2012 Apr 26, 4:48am
How quick do you think my HOA would be on my ass? God I would love to read how they would word that letter.
Solar panels aren't cost effective here yet in my opinion.
Gotta love the HOA nazis. Then again, it keeps people from throwing car parts on the front lawn (like they do around here where I live).
Yeah solar is probably too expensive anyway. Fire up the coal plants!
freak80
2012 Apr 26, 6:49am
Exactly. Burn it til there's nothing left and we're forced into solar.
But by then all the starfish will be dead from the ocean acidification from all the extra CO2. ;-)
@GUAB, $8k taxes are probably just base property taxes,
the newer homes have an additional 1% assessed as Mello Roos. Looks like this house was built in 1978 so it has no Mello Roos but it's still a 35 year old home.
freak80
2012 Apr 26, 1:39pm
More house decorations!
But according to your picture, you yourself will become a house decoration! ;)
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Hi folks,
In recent weeks, there have been many references to a decrease in supply in the Bay Area market.
I'd like to explore this a bit. What's driving this and when can we expect it to change?
Is there anything currently cooking with re-finalization of the HARP program? We know that foreclosure sells follow foreclosure starts which follow foreclosure notifications. Has there been some slow-down recently in one of these processes? Is it simply because the first wave of the folks walking away from under-water situations has struck? What can be said about any shadow inventories? Are banks strategically controlling the rate at which REOs are coming on the market and foreclosures are making it to the court-house steps?
I'm looking forward to hearing your theories on this and of course, data is always appreciated!
http://www.mercurynews.com/saratoga/ci_20411232/lack-housing-inventory-is-problem-bay-area
http://www.zielinskiteam.com/2012/04/09/inventory-in-the-bay-area-has-fallen-nearly-40-percent/
#housing