While speaking at an investment conference recently, John Stumpf, the President of Wells Fargo & Company stated that this current real estate crisis is the worst he’s seen in his entire career. In fact, he likened it to the same slump that existed nearly 80 years ago. “We have not seen a nationwide decline in housing like this since the Great Depression,” he said. Angelo Mozilo, the CEO of Countrywide Financial Corp. also echoed that feeling in a recent speech he gave.
We all know times are tough and getting tougher everyday. Home values are dropping at a rapid rate and foreclosures are rising just as rapidly. Just last month, nearly 25% of all Moreno Valley sales were foreclosure homes leaving the sellers of the unsold 75% feeling frustrated. Foreclosures are starting to flood the market and this will cause a continued decrease in home values as banks unload their huge inventories of vacant properties.
The local market snapshot looks like this:
Riverside-2,947 homes currently listed for sale. In the past 30 days, 97 closed escrow. This means that only 3.3% of the homes sold.
Moreno Valley-2,315 homes currently listed for sale. In the past 30 days, 56 closed escrow. This means that only 2.4% of the homes sold.
Corona-2,325 homes currently listed for sale. In the past 30 days, 95 closed escrow. This means that only 4.1% of the homes sold.
If we look at the number of sales versus the number of listings over the past several months, we see that Riverside alone now has a 30 month supply of homes. In other words, under the normal circumstances and if things don’t get any worse or better, it would take 30 months for a home on the market to sell.
I've instructed our team to tell all of our sellers to reduce, reduce, reduce. With all the advertising and marketing we do, we sell more homes than most but it's still not enough. In order to sell a home in this type of buyer’s market, one thing is important: PRICE. If you’re not the best priced home available, you won’t get sold. And if you’re not getting 2 to 3 showings per week, your not the best priced home.
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