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Home-Buyers Trying to Predict the Market...

I would like to get some feedback from anyone reading this what they think about home buyers putting in their offer based on what they "think" is going to happen in the real estate market vs...where the market is TODAY.

In a declining real estate market, buyers would love to catch the bottom, just like in a declining stock market. So some buyers try and put in offers based on their prediction on where the market will be in a few months etc...not a bad idea ... but... the bottom line I feel is "If a home is price correctly, then it will sell at the most the market will bear" and get top dollar and sell quickly for that area. It's hard to justify putting in a low ball offer on a home that is already "priced correctly" for TODAY'S market.

I know it's a real estate agents job to give direction in price to the buyers by giving accurate comps and explaining the comparisons...

So what do you think? Are you seeing much of this?

Posted by Don Orason San Jose Realtor - Real Estate Agent on 12/03/2006 08:13 PM

Comments (7)

real estate, buyers, sellers, offers, pricing

7 Comments on Home-Buyers Trying to Predict the Market...

DEC

2006

Most of them are thinking of tomorrow when they buy...long term and they don't want to over pay if they think the market is still dropping.

it is much like buying a stock. Who really cares if you get the right one for 300 or 305 when it could be worth 450k in a couple of years. They would be better to notice housing trends in your area which means location and style. Google was selling for 95 and now 500. If you like it you get it. If you dont like then dont buy. What stocks do you like. Bought Loews last week. Eric

Eric, I agree it's like the stock market..I also made the comparison. I always try and do just what you said...I like to show historical views. In fact I have website dedicated to just that http://www.sccrealestate.com/. It shows the real estate trends in my county. Thanks for your input.

One more thing...I have sold off most of my stocks in the last few months...So I don't have any real favorite picks right now...but I am open to suggestions.

DEC

2006

I am seeing a lot of this, from my clients. But personally I think, that the market can not really bottom more here in Santa Clara! Traditionally winter months are always slow, and could an opportunity for a smart buyer or investor to buy it.

Hei, we are in Silicon Valley. It can happen some where else too, but Santa Clara. The market might correct for a couple of months. We just have a lot of media frenzy.

FEB

2007

Many in this area put off buying in 2006 and are getting to where they have to buy in early 2007. They thought they would get a better deal this year with the high inventory of homes. However, I believe if they don't buy by the end of February there is going to be such a buying frenzy in March that sellers will be more in control due to higher demand as the inventory shrinks.

SEP

2007

Don, your stats pulled from MLS are better than nothing which is what most agents offer on their site - so kudos to you!

Have you ever seen Creekside's? http://www.creeksiderealty.com/market_update_new/market_index.htm

Good stuff, especially the visuals given by the graphs!

San Mateo County hits a new all time median high! (see my video post about the "Rich vs Super Rich" you'll get a giggle!) Santa Clara County's relatively flat.

And BTW I don't see ANY problem for ANY agent to refer a client to their site (if relationship has been established and credibility cemented, but even if not, just one little "tip" like this to a prospect could tilt the scale towards your court in their information gathering stage! Try it out and let me know the response you all get.)

For Silicon Valley agents, ask your clients:

Do you believe the local job market is soft or thriving?
Do you know of any large land rezoning projects that'd literally create several new city residential blocks and new communities?
Did you realize that the majority of California's real estate woe's are occuring in the Central Valley? (Merced/Modesto/Stockton areas are in top 5 foreclosure metros in America. Why!? Primarily over building of new tracts so the glut of inventory on new homes and drasictic price reductions which come along with such inventory have dramatically dropped home values so that Bay Area and LA FTREIs (First Time Real Estate Investors) who got 100% liar/liar, I mean, stated/stated loans who are now trying to move their vacant "rental home" - because most the renters got 2/28's w/zero down because buying actually was only a bit more than their rental! - AND many of those FTHBs just mentioned can't afford their now adjusted ARM nor can those habitual subprime borrowers who stripped $60-$75K of their equity each year from 2003-2006 to pay down their credit cards (again!) and pay off that new truck!

Silicon Valley real estate (especially San Jose on up into Google View and into Law Firm Alto) has a vibrant job market, an economy fueled by nano/bio/& of course software/networking/computer technology that is NOT being seriously impacted by the woes in the financial sector and has no major new construction inventory to worry about. Point this out to your clients and look like the heros you were all meant to be!

Stock picks:

SanDisk (building a mega flash drive that will enable your PC to fire up as quickly as your iPod and Treo/iPhone/Q! Per Zacks, their 6 month target is 50 or 60% higher than what it is now!)

Western Digital (just got this pick this today! Disclaimer: my dad works there! ;-)

Selection for Monday September 10, 2007

Western Digital Corp (WDC, $22.37, -0.66)

Technology is back in the spotlight this week and we highlight Western Digital Corp., which was formed in 1970 and began designing and manufacturing hard drives in 1988. The company is headquartered in Lake Forest, California and currently employs 27,000 people worldwide. Western Digital is one of the largest in the world by production and should generate profits from the rising demand for storage.

Hard drives - are the storage medium in desktop and laptop computers as well as all servers and mainframes throughout the world. They are also used in printers for storing fonts and print jobs as well as digital music players and a myriad of other portable and stationary computer-based devices.

From the company report:

Western Digital Corporation (WD) designs, develops, manufactures and sells hard drives. It sells its products to original equipment manufacturers and original design manufactures for use in computer systems, subsystems or consumer electronics (CE) devices, and to distributors, resellers and retailers. Its hard drives are used in desktop computers, notebook computers and enterprise applications, such as servers, workstations, network attached storage, storage area networks and video surveillance equipment. Its hard drives are used in CE applications, such as digital video recorders, and satellite and cable set-top boxes. It markets hard drives under brand names, including WD Caviar, WD Raptor, WD Scorpio, WD Passport, My Book, My DVR Expander and GreenPower. In September 2007, WD, through its indirect subsidiary, State M Corporation, acquired Komag, Incorporated. As a result of the merger, Komag became an indirect wholly owned subsidiary of WD and changed its name to WD Media, Inc. Komag develops, manufactures and markets thin-film media for storage of digital data in computer hard disk drives

For the previous 12 months Western Digital had sales of $5.47 billion with a net income of $564 million. Their price-to-earnings multiple is lower than average for most stocks that StockScouter is currently tracking. Western Digital Corporation announced that for first quarter 2008 it expects revenue to be between $1.45 billion and $1.5 billion and earnings per share of between $0.43 and $0.47. According to estimates, analysts on an average were expecting the Company to report revenue of $1.42 billion and EPS of $0.47 for first quarter 2008. Zacks currently rates the stock a strong buy while StockScouter pegs it a 9 out of a possible 10. Buy and hold shares of Western Digital traded on the NYSE ticker symbol WDC.

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