It always boils down to the fundamentals — Supply and Demand. We know that the Bay Area is always supply constrained and the real estate collapse took many of the higher density projects and put them in a deep freeze, meaning we had even fewer new projects adding to the supply from 2008 ’til today. Now we have a new phenomenon, for all the people that got foreclosed on and were supposedly going to be renters the rest of their lives, it turns out they still want to buy homes and for the many that got foreclosed early in the cycle their time in the penalty box is over.
And as foreclosures in CA and the Bay Area continue their downward trajectory, people waiting for that ‘distressed’ buying opportunity may never see it materialize.
Rather than competing with 10-20 other offers as soon as a ‘bank-owned’ home hits the market, buyers are finding the process of buying a new home to be more appealing as builders ramp up community production.
Source: Steve Reilly, Marketing Consultant, (925) 368-3128