San Diego Real Estate – Decreasing Affordability Caused By Declining Inventory of Single Family Homes
With fewer homes with equity coming to market and the increasing numbers of buyers vying for the more limited inventory, there are few choices left for the family on even a reasonable budget. Federal Tax credits for First Time Buyers and move -up buyers within a specific income threshold has increased the competition for affordable housing. With prices for an average per square foot dwelling in San Diego now heading well into the $300 per foot range, the lack of inventory coupled with the increased demand is reducing affordability.
I have seen availability coupled with affordability drop, seemingly to close out the family even with a fair amount of income if they need to occupy the property in a reasonable time frame ( most short sale purchases can be several months off if lender approved). The numbers of Buyers for more moderate priced homes has mushroomed and this week alone I have viewed many properties through much of the lower half of San Diego County and touching into the upper half up of the county to the $400,000 level for just such a family. Many short sales have no acceptable occupancy time line and the corporate REO’s have limited financing due to the 90 day FHA flipping rule.
The market has heated up very quickly since the extension and expansion of the Federal Tax Credit for first time and move-up Buyers in the moderately priced home range. The housing supply is dwindling and the current limited inventory in many cases is going into overbid with multiple offers.
Market conditions in San Diego seem to indicate that the more affordable single family housing is to be found more inland and anything that is priced properly and market ready within 20 to 25 minutes of the coast is getting a lot of Buyer showings and multiple offers within days of bringing the property to market.
Affordability as cited by the economic predictions usually deals with statistics based in medians and averages. I am not dealing with statistics but rather real families with real housing needs. Day after day searches bring me to the conclusion that housing affordability has waned and the price of property is inching up as affordability based on lower inventory is declining.
Please Note: I didn’t bother to check to see how my empirical evidence aligns with the actual statistics since my clients are enduring the ordeal through their own real life situation and statistical numbers don’t mean much to them in trying to locate and purchase a property they can call home.
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