High demand only smoke and mirrors
![iStock_000004186637XSmall1[1]](http://firsttuesdayjournal.com/wp-content/uploads/iStock_000004186637XSmall111.jpg)
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What percentage of your buyers are investors?
- 30% or greater. (42%, 11 Votes)
- 5% or less. (27%, 7 Votes)
- 20% (23%, 6 Votes)
- 10% (8%, 2 Votes)
Total Voters: 26
Bidding wars are back as demand for housing surpasses supply, per recent reports.
In addition to low construction of new homes, negative equity has made many homeowners reluctant or unable to sell, keeping these underwater properties off the market.
Further, buyer-occupants for low- to mid-tier housing are losing out in bidding wars to seasoned investors with more financial weight to throw around (read: cash) and visions of scoring big with profit-heavy resales.
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About The Author
Sarah Cantino
is lead editor for the Landlords, Tenants and Property Management and Real Estate Property Management books.
This is probably true across most of California. In Silicon Valley, we sit with 40%-45% of normal seasonal inventory. Few are distressed properties (particularly on the West Side – Cupertino, Saratoga, Los Altos, Palo Alto, Menlo Park, Los Gatos, Sunnyvale, etc.). Most are purchased by end users looking for a (semi) final destination. Good schools and a good commute add $100s of thousands of dollars to the price. Down payments generally range from 20% to 100% with many putting up 35% or more and not moving again for a minimum of 15-20 years. Demand is the driver. 16 out of 17 transactions I’ve had this year involved multiple offers (as many as 20) on properties priced at or near the top of very recent comparable sales. None were Short Sales or REOs. The number of sales and closed transactions is normal (they come on the market, sell fast, and close quickly). There are a few bright spots in the California Resale Market.
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In historically high demand areas, as in coastal areas, there is a severe shortage of inventory, and owner occupiers have few choices, especially in the most affordable price ranges. Low interest rates are the driving force.
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