Pent-up Housing Demand Will Soon Rip Loose
Tuesday, February 8, 2011
SAN DIEGO Home prices in San Diego have ebbed and flowed since the spectacular run-up became a spectacular nose dive. Lately they’ve been ebbing. And real estate experts have spoken of pending drop in the median price of homes due to the “shadow inventory.” These are distressed homes on the cusp of foreclosure that will soon flood the market.
But that’s only one side of the coin. John Karevoll is a housing specialist with DataQuick and he says the pent-up foreclosures are accompanied by a pent-up demand for housing. Falling home prices and the difficulty people have in getting mortgage financing these days have stood in the way of many people who want to sell or buy.
That means college graduates are living at home with mom and dad. Homeowners who want to make a lateral move, to a different neighborhood, have been unable to qualify for financing. Karevoll says even divorced couples are still living under the same roof because they can’t get financing or have been unable to sell at an acceptable price.
Once financing becomes more available, he expects to see a “tsunami” of home sales as the pent-up demand is finally expressed. Take a look at my iPhone video interview with him (forgive the shaky frame). In case you’re curious about the background scenery, he’s on the patio of the Living Room, on El Cajon Blvd.
Karevoll begins with another interesting point. Old homes, built in the 1930s and 1940s, have been very resistant to the whims of the marketplace and have held their value extremely well.