Recent housing data, in part driven by rising rates,
has been raising red flags as indicators reflect deceleration.
Should we really be worried?
Jim Klinge, aka Jim the Realtor, says that, at least in the San Diego metro area — which has seen prices jump 19.3% over the past year — there is little cause for concern.
In a new blog post, he says a small group of investors — ones largely immune to economic data — will continue to drive the market.
…with a [San Diego] county population of 3.14 million people, we don’t need everyone in the pool — we only sold 3,466 homes in the county last month.You could exclude 90% of the population from the market and we’d still have enough demand…at least until the baby-boomer liquidation sale starts around 2020.
The flow of rock-bottom deals may be dropping off, he says.
But the profile of the average buyer has not really changed — and won’t for a while:
I still get emailed every day by investment groups wanting me to send them deals. If there are fewer investors buying, it’s because there are fewer deals, which would mean prices are holding up or going higher — too high to make sense for flippers. Investors are supplying the floor to the market.
There is definitely room to run.
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