And prices are going up a lot as a result.
Across the Bay Area, buyers are fighting for a limited supply of new and existing condos.
Several factors are combining to create this situation:
- investors have already snapped up many foreclosures and short sales and are renting them out.
- homeowners who might sell in a typical market are either still on the sidelines watching prices rise or are underwater and can’t afford to sell (much fewer now than yesterday!),
- those homeowners who do want to move up cannot do so, as they question rightfully their ability to purchase a "replacement property" in this one-sided market (the lack of bridge loans does not help),
- demand has been growing, because of the good job market in the bay area, and also - interesting trend - because many buyers who went through short sales or foreclosures are becoming homeowners again, thanks in part to loans from the Federal Housing Administration.
article by Nin-Hai Tseng of CNN.
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Thanks for reading, as always!