Why are there no homes on the market?
The number of available homes to buy in Glendale CA is up from last month… but that is typical for the summer months. We have fewer homes for sale than the same time, last year. this is not a surprise if you remember my 2018 economic forecast post earlier this year.
Market Watch posted the article, “Why aren’t there enough houses to buy?” and I felt the reasons ring true for Glendale CA homes.
A healing housing market doesn’t have as many distressed properties, meaning fewer easy pickings.
In April, data provider Black Knight said that more than one-quarter of the reduction in mortgaged properties for sale over the past 12 months was due to a reduction in distressed listings. Distressed sales volumes have gone from more than 100,000 a month at the peak of the postcrisis period, 2009-2012, to about 25,000 today.
Black Knight’s Ben Graboske told MarketWatch that delinquent borrowers are four times as likely to list as those in good standing, so even a rise in non-delinquent homeowners looking to sell won’t offset that big decline in distressed listings.
Home builders got walloped when the housing bubble burst, and they aren’t back to capacity yet.
As the crisis took hold, a million and a half residential construction workers were laid off. Barely half that number has been replaced since. The home builders industry complains that labor is too hard to find, an idea that many economists find hard to swallow. Higher pay would go a long way to enticing workers back, they argue.
But it may be more difficult than that: many of the workers who lost jobs left the industry altogether, and many would be too old to return now. Some economists speculate that job security might be a stronger attraction than higher wages. No one wants to live through a repeat of what happened in 2007.
Anyone with eyes knows lots of building is taking place in Glendale, but most of the splashy new complexes are luxury rentals in Downtown Glendale. Labor, however, is definitely difficult to find.
Millions of homeowners don’t have quite enough equity to make it worth selling.
Lots of attention goes to “underwater” homeowners — those who owe more on their mortgage than their home is worth. But there are another 4.7 million who only have between 0% and 10% positive equity, according to Attom Data Solutions, which isn’t enough to convert into a payment for a new home, upgrades, Realtor fees, and so on.
Those millions of owners represent “laden inventory,” Attom VP Daren Blomquist told MarketWatch. And because they’re sitting tight while people who do have enough equity are out shopping, builders and sellers are marketing to those people, who are likely to buy higher-end homes.
Glendale is fairing a bit better than the nation in this department. On average we are about 12% above our peak prices in 2006. The normal cost of selling is about 7%, so many, if not most, homeowners can afford to sell and even realize a bit of a profit. Still, it is not a compelling reason, and Glendale homeowners are content to sit tight.
“I’ll never get another mortgage rate this low!”
Economists and other analysts have studied the idea that people with ultralow mortgage rates may be reluctant to give them up. Data provider Black Knight offers some evidence that “rate lock” is already creeping into the market even though rates haven’t budged much.
The higher the rate on a mortgaged home, the more likely it is to be listed for sale, according to their data, which is as of April. “I think there’s a perception that mortgages are not inexpensive any more,” Black Knight’s Graboske said. “Borrowers just perceive that they can’t get a better deal.”
Wall Street wants to be your landlord.
In the wake of the financial crisis, the number of Americans renting rather than buying skyrocketed. Large institutional investors like BlackRock began buying up single-family homes to rent out. The Urban Institute’s Housing Finance Policy Center estimates that these investors have bought a small sliver of the market — perhaps 300,000 houses — but that’s still thousands of houses out of circulation, mostly in the entry-level segment of the market.
“I don’t want to be a buyer!”
There’s evidence that the frenzied housing market weighs on owners’ decisions to sell, since most sellers have to turn around and buy something themselves. In a January survey from Redfin, one in four respondents considering selling a home said they were uncertain about doing so because they were worried about finding a replacement.
Michael Doyle, a Realtor with Windermere in Seattle, one of the country’s hottest markets, sees it all the time, including with recent clients, a family of four with school-age children: “They would love to list their property and then go shopping but they know that the number of homes that are appealing and affordable to them are very few and they understand that their chances of securing the homes aren’t 100%.”
The risk, of course, is that an expensive property today will be even more expensive tomorrow. Doyle advises both buyers and sellers is to move forward. “Shame on the buyer who looks at what a property sold for three years ago,” he said.
I hear this from Glendale CA homeowners all the time! It is one of the reasons I started my Best Places To Retire series, interviewing Realtor friends in other areas of the country. I thought I might inspire someone to “get out of Dodge”. I realize that sounds like I am a mercenary… but I just want to find homes for all our good buyers!
You might be feeling frustration if you are a Glendale Ca homebuyer. Frankly, you’re probably pretty frustrated if you are looking in any of our communities.
You know that seeing a home on the internet is not enough. You want the inside edge, catch a break, be “in the know”. Call DIGGS. We offer a Buyer Strategy that is unique and effective.