July 25 Comments

It is really surprising how many fine homes are available on the market these days. Jean and I went on Hidden Meadows 'caravan" yesterday and saw some terrific homes at almost unheard of prices. One, just four years old here in the Meadows on more than 2 acres was $1,200,00 -- now $785,000 in foreclosure, The $/square foot works out to $242!

One home in Rimrock is $750,000! It is a nice home -- owners want to go to a retirement home and the home has usable room for a guest house. The $/square foot works out to $250!

In past caravans, we have seen some absolute "dogs" -- all at the lower end of the market, where Sellers simply could not afford to pay their mortgage. They also failed to keep up the property -- but this caravan yesterday was amazing for the low price of some really fine homes on beautiful view acreage!

My best guess is that the motivation for most of these sales is moving to be near family or retirement facilities, and not being able to hold on for several more years for the large inventory to clear.

The particularly good buys have moved into the Executive Class homes, and even some of the Luxury Class homes.

Just to show you that statistics are not all they appear to be, there have been no listed homes sold in the Meadows in the past 10 days.

That mean that no homes have OFFICIALLY gone into pending – I sold one home before it was ever listed! It will not appear in the MLS statistics until after it closes.

The owner, a Realtor, put his sign in front of his house because he had bought another in the Meadows, but he had not intended to list his home officially for 10 days to give him time to make it ready for sale.

My clients were driving The Meadows, saw the sign and called me. We put it together the next day. It will not appear as a pending until it is also a sale – in another month or so 

Official statistics are an indicator, but they are not totally accurate.

May 2008

Here, in the second week of May we have had four new listings, four homes went into pending, and there were two price reductions. No homes fell out of pending and came back on the market.

March, 2008

While the weather is not yet warm, it is warmer – and if there is going to be an increase in home sales, this is when it will start.

In the stock market they say, “Bulls make money, Bears make money, but Pigs don’t make money.” That is their way of saying that Buyers and Sellers can’t judge the top and the bottom of a market, so they should be happy to just be somewhere near the top and bottom.

If we are not at the bottom, we are certainly near. If you find a home that meets your requirement AND it is reasonably priced, this u=is the year. That is not to say that the offer should not still be lower, each home currently listed has either a large or small need to sell. While local Realtors sometimes know something about the Owners pressure to sell, NO ONE REALLY KNOWS!

I do not know, and do not WANT to know how much a Buyer will eventually offer on a home, or how much a Seller will eventually sell for. Those decisions are made between spouses, and the Realtor is not privy – nor do they want to be – so only an OFFER will determine the eventual selling price.

But I still advise the use of an Appraiser – on both sides – to have a third party place an objective value on the table. I was designated an Expert Witness on the Subject of Real Estate Values before the Superior Court, State of California, so I know the values. Nevertheless, since I have a dog in the fight, I advise the use of an outside Appraiser.

February, 2008 Outlook

We remain in a slow market, but is is slower than it really deserves to be.

A home is NOT an investment!

 I am not an “Investment Broker! 

A home is a warm place to stay dry, and if a person is warm and dry in their home, that meets the basic requirement. Additionally, it helps if the home meets a number of other requirements – like close to work, and in a neighborhood of compatible people. 

But an investment?  Not until you are ready to take your money into a Retirement Home! Before that, if the value of your home goes down then the price on the home you want to move to also went down. In a rising market, when the price of your home goes up, so will the price of the home you want to move to go up! The relative distance between the two homes remains about the same – so if you want or need a new home, just about ANYTIME is a good time to buy.

I am not big on trading homes quickly – my first home was ours for 13 years, the second one 22 years, and this one 13 years and counting. I keep my cars, my homes, and my spouse as long as possible. (She has been with me more than 50 years, and will be forever.)

But as a society we have come to think of a home as an investment. It isn’t. It is a place to LIVE! If, by chance, it also appreciates, more the better, but you didn’t marry your spouse as an “investment” – and for certain your car is NOT an investment.

Neither is your home – at least not by design. If it does appreciate, that is frosting.

Outlook for 2008

The outlook for the local housing market over the next year is that it will continue to decline, but probably at a lower pace than 2007.

Buyers should shop carefully for bargains – vacant homes, and those advertised as “Bring Offers.” Buyers should also be aware that local Realtors know of homes that are for sale that are not listed on the MLS – some Sellers just don’t want to go through the hassle in a slow market. I do not usually recommend “Short Sales” or Foreclosures because in the case of Short Sales the “decider” is the bank, and they are notorious for slow decisions, and Foreclosures have many pitfalls. If you are a serious Buyer, there are bargains, and there will be for another year – but if you find a home you love and intend to live in it for more than five years, the home and the longevity of the purchase dictate that you buy when that home becomes available.

Sellers who do not have to sell, should not try. IF they must move, they should rent out their home for the next three or four years. If circumstances dictate that Sellers must sell, they must be prepared to accept next year’s price to facilitate the sale. I recommend employing an independent appraiser, THEN pricing the home 5%-10% below that appraised price! NO, YOU ARE NOT LOSING MONEY! You are simply not making as much money as you thought you would two years ago. If you have lived in your home more than five years, believe me you are still making a tidy profit! Don’t ne greedy – it will just leave your home unsold and on the market for a long time. Life is too short to go through that. Price your home below the current market, and move! (The “current market” is not what you, or even your Realtor believes it is – both of you have an emotional component in the pricing. Get the emotion out by employing an independent appraiser, then pricing the home to sell at substantially BELOW that price.)

I know Sellers don’t want to hear this – but it is realistic. The market will change about March of 2009, but that just means a stable market because there are thousands of homes being currently held off the market that will slowly be fed back into inventory.

We will not see a potential Sellers Market for five or six years. Buyers and Sellers must deal with REALITY!