The infographic above from the California Association of REALTORS(R) shows nothing less than a transformation in seller attitude between 2012, the start of the current boom in many parts of California, and 2013--and we can only imagine how euphoric sellers are now, in 2014.
Like I always say, momentum breeds momentum. And tomorrow will always be like today, only more so. Yup.
Unfortunately CAR only measures seller euphoria (or despair) statewide, but my guess is that the Bay Area--and more specifically, our little patch of sunshine called Silicon Valley--was maybe a year or even two years ahead of the statewide feel-good curve. Optimists abound here, with only a small but vocal minority under the unhealthy sway of their favorite economist prophet of doom--folks, that's why economics has been called the "dismal science" almost since it started claiming it was a science.
So if sellers are feeling so gol' darn good these days, why aren't there more of them? After all, you'd think more homeowners would notice how giddy their neighbors get as soon they put their homes on the market, and maybe want some of that action themselves.
I could give you twenty reasons that supposedly explain our lack of inventory, but I think the biggest reason is right there in that inforgraphic. In the immediate past, sellers sold because they had to, although relatively few homeowners in places like Los Altos and Palo Alto had to. Today, they sell because they want to, and apparently very few Los Altos and Palo Alto homeowners want to. Sell to move up? Sure, that's a tough move to pull off here in the Valley these days, but it always has been in a boom market. It isn't like multiple offers were invented last year. The very first offer I wrote competed with four other offers, back when cell phones were as much a novelty as Google Glass is now.
Besides, where would a Los Altos or Palo Alto homeowner move up to? Back in the day you could've answered "Los Altos Hills", but how many buyers, move-up or first-time, are interested in living twenty minutes from a gallon of milk? Not many, based on the market stats.
So maybe the reason is buried under all that seller euphoria: if home prices are going to be higher in a year (yeah, probably) or in five years (yeah, maybe) or in twenty years (I'd be willing to bet) then why sell now? Why not sit back and feel all that equity piling up? Why not keep living in paradise, with your 1998 property tax assessment thanks to Prop 13, then sell in five or twenty years or, even better, let your reverse equity loan pay your bills as you age in place?
I'm up for that, except for that stuff about aging.
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