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Statistics on San Jose Mortgages show that although roughly 2% of San Jose area housing is currently vacant, less than 1/5 of 1% (0.2%) of housing, just over 700 homes, are currently vacant and available for sale. The problem isn’t that homeowners don’t want to step up to bigger and better housing, but rather that the gulf between their current home’s marketability and that of the next step is growing on a near daily basis.
According to the San Jose Mercury News, “there’s a 36-day supply of houses for sale now, half the supply of a year ago,” in the wealthier neighborhoods of Palo Alto, Mountain View and Los Altos. Meanwhile in the lower and middle class areas of “central, East and South San Jose, it would take more than a year - 389 days - to sell off the current inventory of houses for sale”.
In other words, the rich just keep on buying houses while the working class just keeps on paying rent to the rich, enabling them to buy even more expensive houses. According to the New York Times, “There seem to be three main causes of the split in the market. The first is that affluent families continue to do better than others, thanks to healthy income gains and a rising stock market. ’To some extent, it is the rich getting richer,’ Andrew LePage, an analyst at DataQuick, explained. ’The folks who don’t rely solely on a weekly or monthly paycheck seem to be doing better.’”
This does not bode well for those of us struggling to pay our bills, of course, but what ever does? The real tragedy here, though is that those who have managed to find a road to wealth are now hitting a brick wall. After years of hard work building their net worth to the point where they can “move on up” to nicer streets and better schools for their kids, they’re unable to liquidate their largest asset in order leap the breach and land safely on the wealthier end of the market. After following all the “rules” handed down to them by their parents and financial advisors they find themselves stuck in a home that they cannot sell, and are therefore unable to place competitive bids in the next tier of housing, where houses are still being sold within days, if not hours, of being put on the market.
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