I recently received a call from a potential home buyer referred to me by past clients.   They have great credit, over $100,000 for a down payment, prefer a quiet street don’t require a large yard and would love to purchase a home in a Silver Lake or Glendale neighborhood for under $600,000.  This should be easily attainable but the problem is that there is a shortage of well priced homes, especially in their competitive price range.

Too many homeowners lack the equity to sell; they either owe more than their home is worth or if they do sell their home, won’t realize enough of a profit in order to move on to the next one.  LA Land states that one in ten homeowners are in default.  Until these defaults hit the market as foreclosures we may experience a shortage of well priced homes.

The New York Times writes: Bailouts, loan modifications, can’t seem to stop the onslaught of more homeowners under water (owing more than their home is worth). Experts predict a steady drumbeat of defaults over much of the next decade as these interest-only loans mature.

Los Angeles Home Buyers: Patience is a virtue, wait for the right home.  There should be a little less competition after the $8,000 tax credit expires (November 1).   Most of you have been waiting for awhile, as long as interest rates don't increase, a little longer won't hurt.