Lack of housing inventory is a problem in the Bay Area
By Rose Meily, for Silicon Valley Community Newspapers
04/16/2012 07:34:28 PM PDT
04/16/2012 07:34:28 PM PDT
Bay Area is seeing more improvement than other markets nationwide, but
its lack of inventory is a problem, according to Rick Turley, president
of Coldwell Banker Residential Brokerage for the San Francisco Bay Area.
Turley recently told Silicon Valley agents they need to educate their
clients about the real story behind their local markets.
have a dearth of listings everywhere. Inventory is the lowest it's been
in four to five years in every county," Turley told members of the
Silicon Valley Association of Realtors.
Turley said the market is
heating up but hampered by very low inventory, which have resulted in
numerous multiple offers. Places like San Francisco have a mere three
months supply of inventory. A healthy market has at least four to six
months supply of inventory, said Turley.
"Inventory is what is going to put a cap on what we do this year," said Turley.
also observed that the Facebook factor and improved employment picture
in Silicon Valley has led to a shift in buying patterns of San
Francisco's younger buyers, who now prefer properties in the Mission
District, Potrero Hill areas, places that are closer to their employers
in the valley.
The lack of inventory in the Bay Area has much to
do with confusion among consumers, according to Turley. He suggested
more one-on-one conversations with clients to let them know that while
it is a good time to buy a home, it is also a good time
sell a home. With the low inventory and growing demand, Turley noted
"sellers have an advantage not just in price, but in terms that can be
favorable to them." Some buyers are proposing free rent-backs, waiving
contingencies and are even willing to purchase homes as is, he said.
remarks echo those of the California Association of Realtors, which has
indicated home buyers in most of California's markets are experiencing
multiple offers, even for distressed and foreclosed properties.
According to the state group's data, sales of bank-owned homes are
closing in an average of less than 60 days, and often above the list
price, without government intervention.
The California Association
of Realtors is opposed to the implementation of bulk REO sales in
California due to the extremely low inventory and high demand for homes
in the state. The group last week applauded California congressional
mem- bers who wrote a letter urging the Federal Housing Finance Agency
to refrain from implementing its "REO Initiative" pilot program in the
state. The letter written to FHFA acting director Edward J. DeMarco by
U.S. Rep. Gary Miller (R-Brea), along with 18 other members of
California's congressional delegation, stated the REO Initiative pilot
program in California would negatively affect California's housing
market and raise costs for taxpayers. The program calls for the sale of
more than 600 Fannie Mae-owned foreclosed homes in Los Angeles and
Riverside counties to institutional investors.
at the national level have likewise registered their concern with the
government's use of real estate owned bulk sales at a time when
investors are already absorbing much of the nation's housing inventory.
The latest National Association of Realtors report on second homes
indicates investment home purchases represented nearly one-third of all
existing-home sales last year. The national group says instead of REO
bulk sales, more must be done to expand the availability of financing
for qualified home buyers and investors to help draw down REO inventory