Monday, February 13, 2006

What Goes Up, Must Come...Up?

The experts speak...

Kelli Yates (1-30-06):

The bubble has NOT burst! Sellers and Agents have become spoiled by the fast sale of homes in the past couple of years. The current market is typical for this time of year and as spring approaches will pick up. Prices have dropped on current listings due to Sellers panicking that their homes are taking longer to sell. Hang in there Sellers and be patient - spring will bring more Buyers!!
Jimmy Castro (2-10-06):
What's in store for 2006? The unsold inventory index is expected to increase somewhat in 2006, current inventory levels should remain lean enough to drive continued price appreciation throughout the year ahead. Meanwhile, new home building will again fall short of household growth in 2006, resulting in a long-run housing shortfall that will contribute further to higher home prices. All in all, sales in 2006 are expected to decline by 2 percent while the median price of Sacramento homes will rise an estimated 10 percent.

If you are planning to buy a home or invest in Sacramento in the near future, I highly recommend taking advantage of the "stall" in the market right now. Get into a home now while sellers are willing to negotiate and interest rates are still reasonably low.

Then just three days later he changes his tune a bit (2-13-06):

What's going on with the Sacramento real estate market? Well, last year at this time there was half as many listings, and the market was on its way to becoming one of the strongest seller's markets in history. Those days are over, and instead of buyers having to decide how much over asking price they should offer, they now are wondering on which of the 20 houses they've seen should they make an offer on and for how much under list price should they offer.

Many sellers are still not in touch with the reality of today's market and are pricing their homes like their home is the only one for sale. That is why we are seeing one price reduction after another, and instead of homes staying on the market for one or two days, we are seeing 30, 60, and 90+ days depending on the area and price range.

Investors are now dumping their properties as eagerly as they were gobbling them up at the same time last year. This is one of the reasons there are so many vacant homes for sale. Instead of bringing the price of housing up as they did last year, they are now bringing it down as they create a much greater supply than there is demand.We'll see what happens as the strong spring and summer season approaches and those families looking to move before the start of the new school season begin to come out. Yes, that does mean more buyers, but it also means more sellers!

Yes, those families with kids who have already been priced-out are going to save the market! Even with this grimmer outlook, he ends with the same-old buy now, it's a "stall" language.
Travis Chatwin (1-17-06):
In the last couple of months we have seen our inventory grow to larger numbers. It is that time of year where the buyers are able to see more available properties. Seller may become a little more motivated with the competition that has come to our market. We have been consistent in homes sales yet the buyer's are definitely feeling like they are able to make a better decision now and not to be rushed into any purchase from any bidding wars. I believe we will see the market continue to climb for the year of 2006 and continue to have people interested in our wonderful surroundings!!
Last October, Michael Lyon, CEO of Lyon Real Estate, predicted the following:
    • Placer and El Dorado Counties to appreciate in 2006 by 10%
    • Yolo County to appreciate by 11%
    • Sacramento County to appreciate by 12%
Then there is this bit of wisdom from the Sacramento "anti-bubble report" put out by the National Association of Realtors® last fall:
[T]he local housing market is in excellent shape with a potential for significant housing equity gains....

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