The market has changed. A wake up call for Sellers.
I originally wrote the following in June of 2008. Some of my earlier posts are dated so I am removing them but the longer I am in real estate the more I believe that market trends are cyclical. The precise timing of what happens and exactly how much it does it is not predictable. The general timing and what happens and exactly how much it does it follows a pattern that I bring up often. It’s almost like the changing of the seasons in that you don’t exactly know what week or even month temperatures will rise or fall, but after enough years pass you start to expect a certain range of variations on a similar theme.
For those of you who don’t already know, June of 2008 was when people in our area started to worry about a coming drop in home prices. To this day, I think it was made much worse than it had to be due to media hype. When people believe that the market is going to get bad, they act accordingly and so it gets worse, the same is true in the other direction. Personally I am a believer in Warren Buffet’s famous quote of “Be Fearful When Others Are Greedy and Greedy When Others Are Fearful” if you are trying to play as an investor. However, as most people are looking for a home, I have written out my thoughts about a straightforward philosophy of when to buy and sell as a homeowner.
There has been an increase of active listings of late. We’re not currently seeing a drop in home values, but time will tell if that is going to happen or not. Right now, the numbers are still showing increases in value but in a way that is showing some uncertainty as to whether it will continue, flatten out or drop slightly. Only time will tell. You’ll hear lots of pundits speculate, but you won’t hear it from me. The closest I come to this is telling you what I’m hearing from all the economists, and the jury seems to be out at the moment.
Regardless, if you’re selling a home, list it realistically. In a boom market like we’ve had for the past few years, people have virtually been able to get away with murder with how they price their homes as even an overpriced place might get sold as buyers snatched up listings. But now, you have to price competitively. Remember, your house is only worth what someone will pay for it. Not a penny more. And when there’s lots of competition out there you’ll have to think carefully about not overpricing it. (Read some of my “tips for sellers” on this.)
Buyers, first time buyer especially, guess what? More to choose from, hooray! First time buyer thinking of holding off and waiting to see if prices drop? Don’t hold your breath, I’ve yet to hear anything convincing to say that we’ll have a drop in prices that would be of the sort that would make it cheaper in the long run to rent for a while rather than buy. Buy something modest if you’re unsure. Like I always say, the time to buy a home when you need it and can afford it. Besides, prices only go up and down in the short term, in the long term they increase, it’s just a matter of time. If you’re an investor, or planning on moving to a totally different market it’s another game.