Wednesday, May 27, 2015

Shopping with $1 million in Culver City: gentrifying out the baby boomers and those unable to keep up with the Joneses.

Dr. Housing Bubble reports:
The story of 2015 continues to be one of a stalemate for the SoCal housing market. Prices in some areas are near or even higher from the previous peak. Yet inventory remains low and for many, prices are still beyond their reach. Investors are still a big dominating force in the market. Flippers are out in full force trying to squeeze out profits in every corner of the market. It is always amusing when you hear about people “missing” the market. First, this tends to come from folks who don’t see themselves as speculators. Yet somehow, they feel that they missed the boat on the big equity jump we have seen in the last few years. However, to unlock that equity would mean leaving said area. In other words, you could have easily speculated and bought Apple stock on margin as well. You are simply timing the market. There is nothing wrong with that but please don’t try to position yourself as a non-speculator. What about the 7,000,000+ people that lost their homes to foreclosure? We usually don’t hear from those once they enter a financial grave. Call it selection bias. Just because you live in your speculation vehicle doesn’t mean anything new. Culver City is a prime spot for house lusting shoppers. Zillow has 41 homes listed for sale. What is also interesting is that the city has 33 pending foreclosures. There is no incentive to rush these out to market. Low inventory, low interest rates, and a high number of house lusting buyers and you got yourself a nice speculative market.
Thank you Federal Reserve, thank you California land use restrictions.