Trending in national real estate news this week is the decline in inventory and why it continues. We've been watching it happen here in the San Mateo real estate market for quite some time.
It's gotten to the point of ridiculousness. And it's annoying.
- Many homeowners are underwater. Some are frozen not sure what to do: Short sale? Let the bank take it with a foreclosure? Keep making payments?
- There's no equity. This has been a problem for a while. Home owners with growing families and bulging garages can't move because they don't have equity to buy a bigger house.
- Everyone wants to buy at the bottom, but few want to sell. Isn't that the truth. You can sell high but you're also going to have to buy high. Everybody wants a deal.
- More purchases from investors of all stripes. When investors got back in the market, I knew change was coming. For awhile it was a ghost town - no buyers to be seen anywhere. Then the investors started trickling in. Then there were hordes. Then the first time home buyers had to get in line behind the investors with bags of cash. Now it's a street fight.
- Banks have been slower at foreclosing. They have so many government hurdles to get over, it's taking longer. Plus Bank of America - one of the largest lenders - had to pull back and get their house in order. They all but stopped doing loans while they swept up the Countrywide mess.
Bottom line: we need more houses to sell. We're not even in the busy season yet.
Home buyers and sellers typically ramp up during Spring. Everybody has gotten the cold weather, Christmas and the Super Bowl out of the way and they're ready to move.
We didn't get the shadow inventory everybody kept scaring us with. That was supposed to be the demise of home ownership.
The latest upheaval is whether or not we'll keep the mortgage interest deduction. When 30 years of house payments are mostly interest, you need that deduction.