Buyers and Sellers - You need to have a good understanding of your real estate market
There are many observable changes going on in the Del Norte County real estate market right now.
We are having our annual slowdown that happens around the holidays as far as sellers go. Listings that expire don't tend to renew until after the holidays (something about having people looking at the home on Thanksgiving and Christmas). This gives the sellers who are hanging in there, despite having showings during the holidays, a little boost because inventory shrinks (less competition is always a good thing).
Active residential listings are down from a summer high of about 310 to about 277. I'm noticing that a large percentage of the listings that are not renewing tend to be in the upper price range (above $350,000). Since this is the impacted segment of the active market (26% of the active listings but about 7% of sales so far in 2008 ), this segment could use the break of lower inventory.
However, I have shown more upper end homes in the past two weeks than I have shown for the preceding months of 2008 put together. So far this upsurge in showings in the upper price range hasn't equated into writing a purchase agreement. It's hopeful that at least consumers are looking, but what I am experiencing is clients have a strong desire to buy, but a definite fear of "pulling the trigger."
For instance I found a client his self described perfect home. He loved it; it was perfect for what he was hoping to achieve with his purchase, but...he emailed me two days later and said, "Fran, I don't know why, but I'm afraid to pull the trigger." He asked me to continue to email him listings, but I think if he passed on the "perfect" home for him, the chances of his pulling the trigger aren't too good.
What's creating fear? You don't have to look hard to see, the economy and uncertain times. Buyers in the upper price range are wary. They want to jump, very much so, from what I'm observing, but fear is keeping many from taking the leap.
What does this mean for sellers? Well, I hear all the time, "I don't want to give my home away." If you are trying to sell your home, you need to know this, your home is only worth what a READY, WILLING AND ABLE BUYER is willing to pay in the present market.
Let's take my home pictured above as an example. When we built it, homes similar to ours were selling for $600,000, maybe even a little more. Not anymore. We have lost about $100,000 in equity, but what does that mean? Did someone come and take $100,000 out of my savings account or steal it out of my checking? Nope. I NEVER HAD THAT MONEY. I would have if I sold my home THEN, but I didn't. That money was really never mine. It maybe could have been if I got a second mortgage or a home equity line of credit (the much maligned HELOC), but thankfully I didn't, because if I had, I would be upside down in my mortgage right now.
To get back to my point, if you are selling your home, it has to be priced right for THIS MARKET. Why? Well, would you pay $50,000 more for a home just because you don't want the sellers to feel like they're "giving it away?" No, especially when you are already suffering from, PTTS (pulling the trigger syndrome).
When a buyer finances a home, there is also the consideration that the home has to appraise in order for the bank to make the loan. If your home is priced above comparables, having your home appraise at the purchase price will be tough if not impossible. With all this in mind, remember, you are not giving your home away if you are selling it for what it is worth in the current market. (Having your home priced properly will be helpful in having potential buyers overcome PTTS.)
Buyers, yes, I can understand your wariness in plunking down money right now, but for some of you, now is the only time. You are approved, you can get a loan (a huge hurdle), prices are lower than they have been in several years, and its a buyers market (sellers are pretty willing to negotiate. This won't be the case in a seller's market).
And what am I going to do? My husband and I built our home to sell, but have decided, "Hey, we have to live somewhere, it may as well be here," and we're going to stay put for awhile. I'm thinking we will be in this home at least another 2-5 years and I don't expect my home to be worth $600,00 again for many years, if ever.
Being realistic about the real estate market isn't much fun at times, but you will fair better in the long run if you have a good understanding of your homes value based on facts and not your emotion, your neighbors opinion, or what's happening in other markets. Your real estate professional can help you have a good understanding of your current market if you are buying or selling, just ask.
I am here to assist you with your real estate needs!
 Brought to you by Fran Gatti at  THE REDWOOD COAST REAL ESTATE CONNECTION Bus: 707-464-5400, Cell: 707-218-8162 Email: fgatti@charter.net Website: FranGattiHomes.com My Blog: Fran's Blog Fran is the #1 buyer's agent for 2007 per CCMLS |
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No one sold more homes in Del Norte County in 2009, 2010 and 2011--*in units sold and volume--than Fran Gatti. Put Fran to work for you!
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The Crescent City/Del Norte County market report for October 2008 is improving...thanks to REO's which comprised 21% of sales.