It seems like we have gone from one weird market to the next weird market since 2004. I remember a listing appointment in 2005 where we priced the home $5000 above anything that had sold in the area and I told my sellers by the time the appraisal was done (3 weeks later) there would be comps to support that price. Sure enough there was!
When the market first started into its downward spiral 2006, it was difficult to be the first listing agent for a property. The first agent had to disappoint sellers with the initial list price and then try to keep up with a market that was dropping $5000 a month in some area. Price reductions and no offers were hard for everyone. Often the first agent was not given an extension on the listing or worse yet fired. That was hard as none of us could have predicted such a quick, sharp decline.
Then we moved onto the market of short sales. I think this market was the worst. To show up at a listing appointment to meet with people who have often paid their adjusting mortgages with credit cards, lost jobs, cars, etc is heart breaking. I went on more than one listing appointment where the clients were crying. That kind of stress is heartbreaking and all we could do was price the home to entice a buyer to wait for 3-5 months while the banks approved the sales. Not a very fun or glamorous time to be an agent.
Along with the short sale market, the REO market was on fire. Homes where the sellers just walked away, unsuccessful short sales, etc created a huge foreclosure market. It also created some beat up, vandalized pits that were almost impossible to finance. Which created the....
Investor market. There was a period of time that the values were so low and interest rates were below 4% that it created a huge market for investors. Which just showed that the market is always good for someone.
So what do investors do? They rent them or fix them up and put them back on the market. With home values on a slight rise and plenty of buyers looking for homes that could be financed, investors started flipping homes.
All at once we had short sales that had to be slightly under priced to attract buyers to wait, REO homes that were difficult to finance due to condition and flip homes that generally came onto the market over priced. I felt bad for appraisers during this time. What a mess of conditions and prices.
As some of the short sales have dropped off, the REO market has leveled out. Interest rates went up a bit so the investors have slowed up as well. With a slight increase in values, the market has again shifted. Now what is it doing? Well, let's look at the MLS graphic below which shows active, pending, sold in the last six months in Placer, Nevada, and Sacramento counties.
Inventory is slightly up but pending and solds are level. So how about prices for the tricounty area?
Look at the graph above...the lesson there is to NOT overprice. To re-cap, short sales are down, flip and REO home sales are stable, Pending and sold are flat with prices remaining virtually unchanged in the last six months. Does that mean that the market has stabilized and returned to normal?
I think we are in the "new" normal. I started real estate during it's boom, survived the downturn and have never known a normal market. I do know that the market is ALWAYS good for someone and for the first time in my career it's pretty good for both buyers and sellers. I also know that with my new brokerage, carefully watching the market, learning the latest marketing tools and continuing to adapt to whatever the market is doing, I'll be able to provide great service to my clients no matter the market.
If you'd like a CMA for your property or may be thinking about a purchase, give me a call and let's see how I can help you where you want to be. I also have specials for new and returning clients. Call today!
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