Though inventory constraints continue to frustrate many would-be buyers in Marin County and throughout the Bay Area.
Sales and listings typically pick up during spring and early summer, but even so there won't be nearly enough for the seemingly insatiable housing demand we are experiencing.
Looking back at the number of homes sold in 2015, January and February presented the lowest numbers in seven years for those two months. You can compare it with the lack of rain, each year there is a hope that the lack of inventory will change back to normal, but the opposite keeps happening. The plunge in sales solely reflects a lack of inventory, NOT a lack of demand.
Why aren't homeowners putting their homes up for sale?
- Fear of finding a replacement home. Whether they are downsizing or upgrading, sellers know they'll be up against tough competition.
- Interest rates are still low and many sellers opt to refinance and stay longer than originally planned (even if the house is becoming too small or too big for them).
- Tax relieves are not attractive enough. For many in Marin County, a $500,000 capital gains exemption may not mean that much if the house have appreciated several millions.
- Add to this a drastic decrease of foreclosure sales (back in 2009 foreclosures accounted for more than 50% of the sales in the Bay Area and now they are down to only 4.5%!)
- Favorable conditions to cash in as a landlord as rents are sky-high.
Cash is king is the old saying, and cash offers are usually favored by sellers as cash buyers often waive the appraisal contingency and offer a quick close. All-cash deals have accounted for approximately 25% as of the beginning of this year.