In my opinion there are three contributing factors to the low homes sales inventory:
- Banks are holding on to inventory and piecing properties out slowly, or selling property off in bulk to investment companies who plan to lease them for a while, and turn them for a profit in a few years.
- Sellers want to sell, but have no confidence that they will find another place to live.
- The market is still rising and because some sellers are on the verge of breaking even, or even making a bit of money on their house, they are waiting until they hit “their number.”
Factor number one needs little explanation. Banks learned their lesson years ago when they foreclosed on too many homes at the same time, flooding the market. There is very little data on mass property purchases by outside investors in the Benicia Area; this is much more prevalent in areas harder hit by the bubble.
Factors number two and three combine to account for the lack of inventory here in Benicia. We are in a rare situation where there are very few properties for sale, while at the same time very few properties for rent. This is a direct result of factor number two. Sellers, who would immediately purchase another home, are now forced to rent until they can find another home that meets their needs. Those who had a short sale or foreclosure will need to rent for a longer period of time until they can qualify to purchase again.
At the time I am writing this article, the total number of single family homes and condos on the market in Benicia is 96, out of 11,000 households. Of those 96, only 23 are active and not currently in escrow with an accepted offer. To further break down the 23, only 3 of these units are condos. The average list price is $470,422 and the average square footage is 2003, making the average price per square foot $252.
Please understand this is just a snapshot in time, but from a buyer’s prospective there is not much to choose from, prices are climbing, and nearly every listing will have multiple purchase offers. Great if you are selling the home, but if you don’t already have a place to move to before you list and sell your property, these factors can paralyze you and potentially keep you from listing your home at all …and the circle continues.
The key to making it through this, or any real estate market, is patience. I am a firm believer that in this circumstance, you will have trouble, but in the end good will come from it. Ultimately, this is a pretty good problem to have—everyone seems to want to live in Benicia.