Comments Off | Thursday, May 27, 2010
RISING PRICES AND COMPETIONS ON IT’S WAY!
This message goes out especially for you to make you aware of recent trends happening in the market. In the Tri-Cities especially (Fremont, Union City, Newark) and even Hayward, buyer frenzy has begun! For a few weeks now, the prices have held steady, and rising. If you found a house you liked, then chances are a few others have also found the same house and thus begins competition. Short sales are rising, and REOs declining. I tell you all in hopes that it will give you more tools to decide on which way to go in the market. For instance, if a few months ago, you had the luxury of deciding between five properties with similar layouts, those times are now a thing of the past.
Instead we are dealing with multiple offer situations, all cash offers and limited inventory of bank owned homes.
Will those times return? It’s hard to say. It’s summer now and fall is approaching. By the end of summer you might expect fewer choices than at the start of the summer. History shows that the market is cyclical. Where are we in the cycle right now? The California Association of Realtors reports
Median Price Up for Second Month in Row. According to
Robert A. Kleinhenz, Ph.D., Deputy Chief Economist
The median price of a home in California rose two consecutive months for the first time in nearly two years, beckoning calls for a bottom in home prices. The statewide median price of an existing detached home rose from $253,040 in March to $256,700 in April.
The California median price experienced unprecedented volatility over the period from September 2007 through January 2009. During that period, monthly declines in the median price were consistently large if not record setting.
….. While recent rates of change were still large by historic standards, they are expected to diminish in magnitude over the course of the next few months.
Sales of existing detached homes remained in April with 540,360 homes sold on a seasonally adjusted and annualized basis, a gain of 3.2 percent from the March figure of 523,490 and 49.2 percent above last year’s April sales of 362,170 homes.
……..The high levels of sales over the first four months of 2009 may be attributed to large increases in sales in lower-priced inland markets where high concentrations of distressed sales have forced steep price reductions…..
So have prices hit bottom? There is no simple answer. The statewide median has remained at roughly $250,000 for four months running in what appears to be a bottom. If demand for homes continues at the present trend, the median price could hold at its present level or even experience some upward momentum.
…….the desire to get a home at the lowest possible price must be balanced with obtaining a favorable mortgage rate and finding a home that will meet the buyer’s needs over a 5 to 10 year time horizon.
Some economists predict that the housing market will have several “false starts,” meaning that there may be periods when home prices reach a plateau, or may even increase for a brief period, and then decrease again. Although home prices have not yet stabilized, home sales are increasing. It also is important to note that real estate is cyclical and prices will eventually rebound, correcting the current market.
Now having said all this, and given you some fast facts from C.A.R. what need to happen is a change in approach. Change and adaptation is required.
My advice is to consult with your favorite Real estate professional today. Developing a long-term relationship with a REALTOR® is the best way to ensure you will be well armed and informed when making your housing decisions.