Happy August everyone!
Ricki and I returned late last night from the StarPower 20th Annual Conference in Denver where we spent 4 days talking with and learning from 1,200 of the top real estate agents in the country. It is one of the only forums in which agents freely share their ideas and experiences in the hopes of mutually growing and improving.
The consensus of opinions was that the market is bottoming out and that real estate performance is highly localized. To say the entire market is good or bad is like saying the average temperature in the United States is 79 degrees, when obviously that means nothing. Here is San Diego we have seen TREMENDOUS activity and interest in the lower price ranges. Over the 2 weeks prior to our Denver trip I wrote offers for clients on propeties that had received 20, 16, 9, and 8 offers in the first week on the market. These properties are now being priced with "energy pricing" which means they are probably listed about 10% under the target sales price in the hopes of generating aggressive activity, and it's working! In the past we would usually list property slightly above the target price and come down until a sale was made, but that has given way to this newer strategy. The lower price ranges, especially in the equity or bank owned sales, is showing market times of a week or so, while the short sales and anything that is not energy priced staying on the market longer. I am now recommending to my clients that we set their search maximum price about 10% below their target to allow for the over-bidding that will probably occur.
Acitivity in the upper end, especially any home that requires jumbo financing, is slower.
A big emphasis was placed on letting homeowners know there are options that are much better for their credit than foreclosure, namely a short sale. If you know anyone who's home is worth less than they owe let me know. If they live in San Diego county I'll be happy to help them, if they live somewhere else I can find a qualified agent in their area to help. A short sale will have dramatically better effects on their credit than allowing the foreclosure to occur. Typically, if a homeowner takes care of his credit, he/she can buy a home in about 2 years after a short sale while it can take 7 or more after a foreclosure. Prime candidates are anyone that bought a home in the last 5 years with less than 20% down and anyone that bought new construction in that period. People in this situation typically go through the stages of grief (anger, denial, barter, depression, acceptance) but can lose their home if they don't take action early in that process.
Also, keep in mind that when interest rates increase (which they will at some time), say from 5% to 6%, buyers lose 20% of their buying power, so that if home prices do drop a little further but rates rise they could save money by making the move now.
Here are a few articles I "clipped" over the last few weeks that expand upon what our market is doing...
http://www3.signonsandiego.com/stories/2009/jul/16/1n16housing014116-median-home-price-june/?uniontrib
SD Median Price Up 3rd Consecutive Month
http://home.sandiego.edu/~agin/usdlei/
San Diego Economic Index Improves Again
http://www.inman.com/news/2009/07/27/california-housing-inventories-shrink
CA inventories shrink
http://www3.signonsandiego.com/stories/2009/jul/29/index-finds-price-gains-homes-county/?uniontrib
Prices level out
Call me with any questions...
Rick Ungar is a Certified Distressed Property Expert, solving the foreclosure issue one homeowner at a time. Contact us today to learn about the best options to preserve your credit and buy again soon.
