As of 8/20/07, there are 77 detached homes actively for sale in the Sandicor MLS in the Villages of Rancho Del Oro(including the Beachwood community). This represents the highest inventory we have seen this year. At the start of the year, there were about 55 active homes, and we held that number steady until about May when it started to gradually increase.
In 2006, for much of the year, we had about 90 active homes in this same area. Then starting at the end of summer, since homes weren't selling, they were either pulled off the market and not sold or turned into rental properties and very few additional homes were listed which allowed the inventory to decrease.
In retrospect, 2006 seemed to be a harder year for Rancho Del Oro home sales since prices were falling, and the slowing of the market caught many by surprise. 2007 started out well since buyers realized the bubble wasn't bursting and interest rates were still reasonable.
It looks like from now until the end of the year, we will have the typical seasonal trend of prices coming down after peaking in June, and buyer activity slowing between Thanksgiving and New Year's. Prices will also fall due to increasing levels of foreclosure, REO, and auction homes driving down prices, and fewer buyers able to get financing. Here in the Oceanside area, so many buyers have relied on creative financing that new restrictions on 100% financing, increasing jumbo loan interest rates, only self-employed allowed to do stated income loans, and more, have put home ownership out of their reach.
Consequently since people still want to live in a nice neighborhood with good schools, the rental market is doing quite well with rent rates going up, and it is fairly easy to find qualified tenants. Owners will need to consider the after tax bottom line when considering turning a primary residence into a rental property.
What does this mean for Rancho Del Oro sellers? If you have equity, you should price aggressively to be ahead of the downward price trend. Start with too high of a listing price, and you might not be able to sell it before the end of the year. For those owners without equity who are forced to sell, short sales, deed in lieu of foreclosure, or bringing money to the table to close need to be considered carefully. In worst case, foreclosure may be the only answer. You need an experienced real estate agent and tax advisor to make sure you understand your best course of action.
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