I love my work as a Realtor. I love it so much that I seem to always be on. I wear my name badge all the time, usually because I have forgotten I have it on, but you will see me at the grocery store, coffee shop, gas station with my badge which pegs me as an agent. Invariably someone will notice the badge and ask, “So how’s the market?” I heard a quote recently, real estate is the national pastime, everyone talks about it at some point. So now I am having a conversation with someone about what is happening in our neighborhood. What’s not to like about meeting new people all the time.
This brings me to the subject of the article – so how is the market? Actually there are several new reports that speak to stabilization in the market. In San Diego, the number of home owners falling behind on their mortgages is dropping. The number of foreclosed homes coming on the market is dropping. The number of multiple offer homes is rising. All of these things point to a market that is finally finding its bottom. Interest rates are lower than any previous time (at least since they started keeping track). Remember the old adage, you have to hit bottom before you can begin to recover?
One area that is particularly interesting is the foreclosure market. There has actually been an increase in the asking and selling price for foreclosed homes nationwide. Now remember, foreclosed homes are usually priced 20-40% under market price, so if the price of a foreclosed home is rising, it doesn’t take a rocket scientist to figure out that market prices are also going to rise. Don’t expect the huge price gains of 2004-2006, but do expect that you will pay a little more for a house in the current market than you might have last year.
So what does all this mean? For sellers, it is pretty obvious, they will be able to sell their homes for a little more than they would have last year. It also means their homes will sell a bit faster than they did last year. I did a recent check in my neighborhood and found that the Days On Market has dropped 11% from last year, less DOM equals faster sales.
For buyers, it means they may need to reassess their home buying process. When I bought my first home, a first time home meant a little less desirable neighborhood. It meant a little smaller home. It meant making changes and repairs to make it my dream home. Buyers today will probably not get move-in-ready in the best neighborhood, but that also means they will follow in the footsteps of their parents and grandparents.
For real estate professionals, it means doing your homework and working hard to provide the very best information to their clients. It means knowing what their local market numbers are so they can help sellers set realistic prices. It means knowing what loan programs and first-time-buyer programs are available to help buyers secure solid financing. It means knowing and understanding the latest real estate rules and regulations to protect themselves and their clients.
Bottom line: Are housing prices going up? Yes, but this can be a win-win not just for buyers, seller and real estate professionals, but for the national economy in general.