Why is the inventory so low in San Diego?
This is a question everyone is asking. While there is not one easy answer, there are many contributing factors.
First, following the collapse of the housing market, home prices along with historically low interest rate led to a very affordable housing market. Buyers and investors who were in a position to buy did so at a rapid pace. Much of the lower-priced inventory throughout San Diego was absorbed very quickly.
Secondly, as foreclosures and short sales moved into the hands of new owners, the supply side of homes did not increase much. Furthermore, poor economic conditions played a huge role in a decline in new construction. We simply were not and are not building new construction at a pace to outpace future housing need.
Thirdly, there is an estimated 15 % or 1.3 million homeowners still underwater in California yet many are finding ways to stay in their homes. Loan modifications are becoming successful and the gap of underwater verses market value is shrinking. Much of our foreclosure and short sale inventory in San Diego has simply dried up.
Lastly, to add fuel to the fire, I see a growing trend of many investors holding onto their inventory rather than “flipping” it. Thus keeping their assets off the open market.
The low inventory environment, and high demand, is however great news for sellers. Most sellers in San Diego can expect multiple offers if there homes are well priced. If the home is especially unique, buyer’s will often times find themselves in a bidding war agreeing to pay over appraised value. As long as demand stays high, inventory low, it truly marks San Diego history as a great time to list and sell your home for top dollar!
Tami McCraw
