What Can San Diego Home Sellers Expect in the 2014 Spring Housing Market
In a few words, maybe some disappointment. We have seen prices escalate all the way through 2013 and more increases in the first 3 months of 2014. So what's the problem?
It is actually a bit hard to define exactly because our market consists of quite a number of sub markets, each with differing characteristics and price points. We are seeing quite different results in each of the sub markets in the early Spring Housing market.
The entry market prices have increased enough to hold off some of the first time buyers, especially in the condo market. Prices have increased over the past couple years but underwriting the financing has become much more of an issue. Many of the condo subdivisions are not able to be financed with conventional financing because of the number of investor owned units. Recall, that investors after the collapse of the market were buying up all the foreclosures for cash. With a disproportionate number of non-owner occupants, these properties are now hard to sell because lenders can't qualify the subdivisions for financing.
In the mid-range markets, we suffer from a shortage of inventory with sellers seemingly wanting to hold on the properties that they currently have. With too few move up Buyers, the lower level of inventory has slowed up the sales. With the home sellers, there is some serious counter pressure on sellers holding off entering the market.The best properties are still leading the sales figures with Buyers demanding move in ready and upgraded homes. Potential sellers are then placed with the dilemma to fix up and upgrade and then take a risk that the market continues to move up the price points or selling for less with investors and savvy buyers that will do the fixing and upgrading of the property themselves.
It seems to be a catch 22 for many of todays sellers at the moment and it will take months to decipher which way the market is ultimately going. Is it a Sellers market or is it a Buyers market? In conclusion, it is a wait and see. In the meantime being in a active mixed market is for sure way better than having no market at all.