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May 8, 2017

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California Home Hunting

by Bob Schwartz

California Home Hunting – The Millennial Home Buyer

This is a very humorous, and unfortunately very true ( especially here in California)   depiction of a young millennial trying to buy his first home.

I’m sure some might think this is true of our current housing market situation in California . . .  and it is!  but, the overpriced housing market in California has been around for decades!  what’s different now, is the fact that due to a shortage of available, and affordable homes in California the situation has been compounded in the last 2 to 3 years.

The last time I was working with a millennial couple looking for a two-bedroom condominium here in San Diego, it took over a year, and three different offers on properties, before we were able to close escrow on their first home.

Now, keep in mind that my first-time home buyer clients were well qualified for their price range, and with help from their folks were putting 20% down.  Yet it was very frustrating to find a decent property that did not have multiple offers on it within days of its original listing.

California Home Hunting

Sure, we were looking at the lower end of the home buying range in middle income areas, where the demand is the highest. But, what would of taken a couple of weeks, or at most a couple of months, five or six years ago, now took over a year! Also, keep in mind, we were looking for a condominium.  If we had been looking for a single-family detached home, in similar areas, not only with the cost be substantially higher, but I believe the acquisition time would most probably have been at least equal to, if not greater than the time it took to find a suitable condominium.

home sales -San Diego home price appreciation   -  California Home Hunting

Because of our current housing appreciation and very tight market there are those who are saying the housing market may be topping out in a new real estate bubble phase. Who can really say whether the California housing market is in a bubble or not? But, our last housing bubble was mainly caused by people who really weren’t qualified for the mortgage payments on the loans they were granted.

Today’s San Diego and perhaps all of California’s housing appreciation, is mainly due to the fact that there is not enough affordable housing inventory. So, in my humble opinion what it boils down to is a basic economic principle,  the law of supply and demand!

Now, if you’re interested in my opinion of where there really is a possibility of a real estate bubble, here’s a link to my post on that subject: 2017 real estate bubble

 

Latest info on the Case-Shiller house price index

California Home Hunting

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