Bears in the Drivers Seat?
Maybe not quite yet, but we do have our learners permit.
The Northern California housing market is all a tremble over the increasing interest rates according to this item even though it appeared about three weeks ago the handwritings on the wall:
"in Northern California we are seeing hundreds of price reductions daily, but that doesn't tell the true story. Home sellers are pricing themselves right out of the market to begin with, only having to drop their listing price three weeks into their listing"
People don't want to face the fact that they paid too much for their domicile, they can't carry the payments, yet they don't want to take a penny less then their inflated purchase price for getting out, thus a series of stuttering price drops. Sort of like hitting your ass on every step all the way down to the bottom. Painful, yes.
The one thing I disagree with in this article is that it's not yet bargain time. Things haven't fallen far enough for the most part. Of course most RE agents will say now's the time to jump in but the Marin RE Bubble Blog had links to an interesting article: Marin Real Estate Bubble: Deflation is More Likely than Hyperinflation which would be enough to put the skids under any prospective house shopper.
Meanwhile, I checked in on what's going on at ZipRealty, always a great place to look, as they show one the price reductions and the number of days on the market, quite a rarity these days in looking at RE. There are 96 price reductions in todays listings. The average amount of DOM for these reduced price houses is 80 days.
Down in San Diego,,they're writing about the Housing Hangover. Even if the party may be continuing in this movable housing feast, Excederin stock looks to be a good investment.
posted by moonvalley @ 10:53 AM
6 Comments:
i spoke to a realtor i know and respect on friday.he had just done his first short sale in 7 years in santa rosa,and said he is expecting a lot more.he's an old timer,who told me the last two years were the worst of his 15 years selling real estate in sonoma county,but it is now picking up.he told me he now prices a house at $10k less than the latest comp,and that homes in the $600k and below market are losing value at a little less than $5k per month.he estimated actual sales prices are down close to 20% from the peak.open houses are dead,i was the only person at 4 today.in driving aound santa rosa,petaluma and sebastopol to look at new condo's under construction it was noticeable that work had almost completely stopped on some,and at others they were obviously finishing the project as quickly as they could.there has been a large jump in inventory over the last two weeks in sebastopol,which i attribute to the first of the loan resets hitting.
"it's not yet bargain time"
I don't believe the "buyer's market" talk either. Sure, there are nominal "reductions," but I don't see the value. Driving through S. Sonoma CO, we dropped by a few modest homes in the $700-800K range aged at 50+ years, some still requiring major ($100K+) rennovations;, others absolute dumps. Personally, anyone paying $5K/mo. shouldn't need to shell out every remaining penny to a contractor. A house or your life: take your pick (it's easy). We have a long ways to go.
marin_explorer -
They overprice their POS of a house by 30% and then later reduce it by 10% from that markup. Or something along those lines. What kind of a reduction is that? No, the price reductions we are seeing are just carrots to lure in the last few buyers. This is no "buyere's market" yet. It's a "fence sitter's market".
Right, that old trick. Add 30% or some multiple to that elusive, historical “base price”, now forgotten. Catch those last “bargain hunters,” while the many of us struggle to keep a straight face.
Steve,
thanks for the great piece!
marin explorer said:
Personally, anyone paying $5K/mo. shouldn't need to shell out every remaining penny to a contractor. A house or your life: take your pick (it's easy). We have a long ways to go.
No kidding! Friends who paid waaaaaay too much for one of the pricey dumps out there, still have many many thousands to go before it's habitable.
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