Most Americans Think Now Is The Time To Sell
Fannie Mae’s National Housing Survey recently revealed that rising prices, no surprise here, are the primary catalyst driving the market. What is interesting here is that fear of the market collapsing, isn’t the driving force. This is why there is tight inventory, fear is not driving the market and frankly, neither is greed. If either of those two factors were responsible, we would see many more properties on the market. But in fact, inventory is still extremely tight. People are staying in their homes longer than the traditional 5-7 years; try 9-13 years. Profit alone is not enough to motivate a homeowner to list their, home, or even to refinance their property. Even though this may cause some sluggishness as we head in fall and the fourth quarter, is it really so bad?
Homeowners are not treating their home as an ATM to pull equity every time they can. In fact, a recent article in the OC Register pointed out that although rates are dipping down to pre-election rates, there is no race to the refi happening. And a lot of the refis that are being done are going into a 15 year fixed or 10 year fixed, designed to build equity more quickly and of course, pay off the home loan completely.
As of press time, approximately 2 million California homeowners own their homes free and clear. Of course all this hanging around creates additional housing needs, hence all the bills the Governor just signed and the boom in construction hiring. We in So Cal are in a definite housing crunch, and it may get worse before it gets better, but as always, we southern Californians are very resourceful and creative.
Hiring in the county is up 6% in a year, and we are tied at #6 in the nation for the construction sector. Riverside and San Bernardino added 15,800 jobs for year over year ending in August. Orange County added 6,100. At the state level, California added the most construction jobs in the year-47,400. This increase in housing starts at all levels from apartments to luxury represents future inventory for the resale consumer who will eventually list that new home after the initial purchase.