San Luis Obispo County is experiencing a record low of houses for sale on the market. Is this a sign that the housing market is bouncing back? Local REALTOR® Dawna Davies doesn't think so.
According to Davies, there are 47.8 percent less properties on the market and the number of sales are up 5.6 percent in the county, as compared to five years ago. When there are more sales, there is less inventory, which creates more competition for buyers.
"Over the past 10 years in the San Luis Obispo County real estate market, we have seen that August through October have traditionally the lowest inventory. In addition, and specifically to this year, the interest rates are even lower than last year, and there are still many buyers for real estate at declining prices," said Davies.
The months of inventory is calculated by the number of available properties to buy divided by closed sales in the recent period. For example, if there are 100 properties in the market currently, and 20 were sold the previous month, there would be five months of inventory. As of September, Davies calculates that there are 4.7 months of inventory for the county.
Davies states that demand should be increasing, based on these market conditions, but speculates that it is not growing because of lack of optimism about the national economy, lack of jobs that support a mortgage, as well as a continued stand-off between buyers and sellers on the low prices.
"I predict that the inventory will rise starting in November, peaking again in April of 2012. There are still more foreclosures and short sales coming as the problem loans continue to reset with higher payments and lack of options for property owners who want to keep their property, but who cannot afford to refinance. Buyers should not get discouraged with the current low inventory because more properties will come," said Davies.
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