San Diego home inventories remain low
Concern continues to mount over a low inventory of homes for sale in San Diego. According to a recent article in the San Diego Union-Tribune, professionals in the real estate industry are wary that shortages in supply coupled with growing demand could produce a dynamic that will prohibit significant progress in the housing market recovery.
The source revealed that competition for homes among qualified buyers began significantly picking up earlier this year as foreclosure resale activity began a steady decline and investor activity began picking up. This resulted in a simultaneous increase in prices and sales, in San Diego and across the state of California.
A professional in the California housing market divided the housing inventory into three categories for the Union-Tribune: equity, bank-owned and short sales. This expert revealed that equity sales, or traditional sales, make up 60 percent of total California home sales, and this number stood at only 30 percent in January 2009. Bank-owned properties made up 60 percent of the market in January 2009 and have fallen to 20 percent of the market today. Short sales are also up today, resulting from a streamlined process from lenders.
The Union-Tribune reported that a speaker at a San Diego real estate conference said, "This shift in the sales makeup indicates an increased demand in inventory, a higher presence of investors and a lack of distressed homes hitting the for-sale market. In other words, more potential buyers are competing for fewer homes, which can keep the market from moving forward, or at a standstill."
Construction in San Diego has also seen its share of changes. The source revealed that traditional subdivision construction is a thing of the past, and more builders are moving toward vertical construction. One of the reasons that new home construction has hit its lowest levels in 50 years is that San Diego county is running out of available land for building, which is a major reason for this shift in construction to taller buildings that occupy less space on the ground.
Another recent piece in the Union-Tribune showed that downtown San Diego is no exception to the recent inventory shortages. While sales are up in this popular area of town for investors, the lack of new construction and widespread negative equity have kept many buyers out of the market, producing an interesting situation.
Eric Martin, vice president of development for major downtown builder Bosa Development told the Union-Tribune, "If you ask any Realtor downtown, they say there isn't enough inventory to satisfy the broad range of buyers."