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The number of San Diego County homes listed for sale on Zillow plummeted by 39.4% for the year ended late February, the company reported today (March 7). Among the 30 largest metro areas, the contraction in California was dominant: Sacramento's drop was the nation's largest, down 48%; Los Angeles was down 45.7%, and San Francisco 40.9%, followed by San Diego. The nationwide number was down 16.6%. This portends higher prices ahead. Zillow Chief Economist Stan Humphries says, "The supply of for-sale listings continues to dry up, driven in part by potential sellers trapped in negative equity [value of the home less than the balance of the mortgage] and homeowners that won't sell out of fear they won't be able to find a suitable home to buy later." But the lower inventory will result in higher prices, and many homeowners will no longer be underwater, and will list their homes, thus easing the inventory crunch.

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Comments

Visduh March 7, 2013 @ 8:38 a.m.

Who'd a thunk it? A sellers market for single-family homes in San Diego already. I'd have expected the depressed prices and flooded market to last several more years. The reasons quoted in the post are valid, yet I think there must be something more afoot. If the local employment situation has at least stabilized, then many of those who can handle the mortgage payments on their homes are deciding to stay put. This sort of contraction in the offerings is most unusual, and is sure to have prices climbing. That is, until all the homes recently purchased by flippers and speculators go back on the market. We may be in for an oscillating market for homes here, a pattern of sharp reductions followed by big increases in the number offered for sale, and so on.

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Don Bauder March 7, 2013 @ 11:53 a.m.

Visduh: Yes, speculators are major buyers of homes on the market. As prices escalate, the gamblers may get wise, but don't count on it. You are right that we can expect homes purchased by flippers and speculators to come back on the market at some point. Best, Don Bauder

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