I couldn’t have said it better. Jim Klinge prognosticates on our 4th quarter housing market, and it sounds a lot like the conversation Steve and I have been replaying over the past couple of months.
My personal favorite concerns the first-time home buyer tax credit. Whatever happens, whether it is extended or it goes quietly into the December night, things in the lower price ranges will necessarily settle down. Finality does that; gone is the sense of urgency.
But, all price ranges are not created equal. What I am seeing is the big squeeze. Put another way, homes at the lower price points being more affordable and therefore enjoying the greatest demand are the stuff we are hearing about, with their attendant multiple offers and feeding frenzies. The problem with so many of these properties is that they are dead-end streets. Buyers are moving in but no one is moving out (think short sale or bank-owned), which leaves us one moving van short of a normal market.
This has become a problem for the mid- and high-priced homes. Demand is less, and a smaller buyer pool can wreak havoc on prices and market time. Fortunately for these sellers, inventory is low, but it is low for all of the wrong reasons; too many would-be sellers don’t have the equity position to make the move they might otherwise have, so they stay put.
Here is how the numbers look for two price segments (selected at whim by me because I said so). These visuals are for all property types in the I-15 corridor zip codes of 92127, 92128, 92129, and 92131. Don’t try to read the numbers – you can’t. What we are looking at are the trend lines.
Keep in mind the market time trend line is a little funky. Those short sales hang around in “pretend active” status for months waiting for bank approval even though they have offers “accepted” first week or first day.
A better man would have superimposed the graphs so you could more readily spot the differences, but a better man has to shove off this morning to meet the termite guy.