Tuesday, March 26, 2013

My how the market changes!

As a real estate agent, I deal with large assets and alot of emotions.  Buying or selling a house isn't a cut and dry transaction.  It's not like buying a pack of gum from the grocery store.  There aren't set prices for anything.  It is partially, supply and demand, but that doesn't take into account the feelings of the people involved.  Honestly, I think most people really trust their gut when it comes to buying and selling homes, if they don't feel good about it, they won't do it, and that is perfectly justified in my mind.  Buying or selling a home is big deal!  Along with several other factors (like interest rates, global and national economic, politics, etc.) the general population's feelings helped change the market from a lethargic buyer's market filled with a 6 month inventory of homes to an aggressive seller's market with nearly no housing inventory. 

After the housing price peak in 2006, Southern California promptly got a housing crash in 2007.  There were sellers trying to short sale their homes to save themselves from foreclosure, but buyers didn't want to be stuck with a home that was losing value daily.  Because of this, few buyers bought.  The homes that were purchased by buyers during this time were the REO's, or bank-owned properties.  The transactions were quick and buyers with loans were able to buy gorgeous large homes at affordable prices.  Short sales took 5+ months to complete, which turned off most buyers.  Even if a buyer did offer on a short sale, they would often lose interest and leave to instead, buy an REO.  Inventory was at record highs, 80% of homes were short sale listings, the rest were REO listings, and there were very few standard sales.  This makes sense because the market values were still below original purchase prices, so very few homeowners were able to sell their homes and break even.

In 2012, several things changed.  A presidential election had been decided.  Fewer REO's came onto the market.  Buyer's regained confidence in the housing market.  Prices stopped dropping.  Interest rates started to creep up little by little.  All of these small factors added up to make one big effect - fewer homes for sale and lots of buyers.  In today's market, REO listings and short sales are hard to find, while standard sales are dominating the housing market.  This is because the lack of inventory and the increased number of buyers is causing more competition, which is driving up home prices.  This is good news for sellers because this means they no longer need to short sale their homes.  With prices up, homeowners are able to sell their homes and break even.  Some are even able to make a little profit.  We are seeing some investor home flipping come back.  Cash buyers make up about 30% of the market share of closed deals.  Buyers with loans are really having a tough time competing.  For every affordably priced home that is on the market, it is not uncommon to have 10 offers within the first day on the MLS.  If this situation keeps up, sellers should be pretty excited, because it is a good time for them to sell.  

As you can see, the housing market is constantly changing.  Within just a few years we've seen the beginnings of a total reversal from a buyer's market to a seller's market.

If you have any questions, comments, or want to sell your home, email me at "tinajan@gmail.com" or call/text me at 909-446-2666.  Keeping abreast of market changes will help you be more informed about whether to buy or sell today.  Looking forward to hearing from you!

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~Tina Jan~
DRE# 01505855
Coldwell Banker Kivett-Teeters
1655 E. Sixth St.
Beaumont, CA 92223
Cell: 909-446-2666
Work: 951-845-5520 Ext. 105
Fax: 951-845-4916
tina.jan@coldwellbanker.com
www.tinajan.com

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