There is an interesting dynamic shaping up in the Valley. Home sales keep dropping, and prices keep going up. Read: Bay Area home sales drop to lowest year-over-year rate since the recession.
Logic would tell you that this activity would have a limited life span. Yet the real life dynamic makes me ask - why do they think people are all of a sudden going to put their homes on the market? Anyone who can, has, refi'd at rates they know they will never get again. AND the banks have put us through hell even trying to get that. Why would you put your house on the market when the world is so uncertain? It's probably a small victory you still have that house if you bought it before the recession in the first place. I know everyone else has moved on - but that scar runs deep. I'm not even above water in my house right now. My rental I could sell. But I'm locked in at a super low rate. And I don't even like being a landlord!
It's not rocket science why inventory is so low. The question is, prices don't keep going up. Right? I don't see the inventory thing getting any better. It's a huge chunk of the market locked in at rates at 4.25% or better. It's hard to figure out how this works out. It has the classic inflationary pressure though. To much money chasing too few products.
I do ask again though - how are banks making money?
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