Home Prices are going up. How we can tell...
By now most of the buyers and sellers know that homes are going up. They went up about 5% nationwide in 2012 and they are expected to rise again by about 5% in 2013. Of course, the numbers will vary by regions, but this is an approximate national average.
I can tell that prices are going up by the fact that interest rates are still at historic lows, there is a shortage of inventory, the buyers have become impatient after waiting for long time to see the prices finally leveling off and many buyers have been saving up for the down payments! All this indicate the pent up demand for homes and thus adding to the price increase.
I would say that prices will keep rising for the next few years and we may even catch up to the 2006 levels sooner that we thought.
Here are 3 reasons that I personally feel the prices will rise at least 5% or more in the Orange County area:
1. Listings are coming in at a higher price.
As one of my marketing efforts, I call on a daily basis, to the sellers whose listing did not sell previously for whatever reasons.(usually it is the price!) On my recent calls, when I have talked to several sellers who said that they are getting ready to put their house back on the market again for sale, they said that they will re-list their house at or above the previous listing price. Generally speaking, when a listing expires, sellers reduce the price to re- sell! This trend is gradually changing.
These sellers have seen are or now aware that multiple offers are coming in on homes for sale the first few days of the homes go up for sale. Many homes are selling above asking price and have 1-2 back up offers in line.
2. Re-listings are coming back at a higher price.
When an offer is accepted the house goes into escrow, there are many factors that may cause the transaction to fall out. Not all escrow close. Some fall out of escrow for various reasons. The buyers may not get qualified, or the appraisal may not come in, they buyers may change their mind after inspections or reviewing the CC and R's(Home Owner Association rules and regulations) and any other reason. There is a small percentage of homes that come back on the market. I have noticed personally and by talking to other agents that these days many homes that come on the market are actually asking for a higher price than what they had first went into escrow for sold!
In case you are wondering what happened if the appraisal values comes in low, many buyers, specially all cash buyers are paying the difference of the lower appraised value and the sell price. There are multiple offer waiting as a back up offer and one of those buyers will take a slightly higher price than what they had initially offered.
3. Arrows pointing up in the MLS.
The proof is in the Multiple listing service posting by the listing agents who represent the sellers. As agents, one of the things we see in the listing details is how long the house has been on the market and has there been a price DROP on the listing price since it first got listed. For the last five years we got quite used to seeing price drop arrows on the multiple listing service. It is a Red arrow pointing down indicating price drops! We also the day on the market the homes has been on the market. Many home sat for over 100 days or even over 180 days before they sold.
Well that is changing, recently we have been seeing price increases! Yes we are seeing more of the Blue arrow pointing UP indicating a price increase! Many sellers are increasing the price after the first week or so when they see 'hundreds' of buyers go through the house and decide to up the price!
In the chart below for homes for sale in Anaheim CA you can see 3 red arrows and 3 blue arrows from the Multiple listing service as of the date of Feb 12th 2013!
Just 3 weeks ago I wrote an offer for a small 2 bedroom single story unit in Anaheim. It was listed for $193000.00 We were lucky to get our offer accepted at $200,000. There were multiple offers on it. Once we went to escrow, another unit in the same complex came on the market a week later listed for $205000.00 and is actually in escrows at $210,000. The 2 sales in that tract in the last few months had been sold less than $197000! I just talked to seller in that complex and the same type of unit is coming on the market at $21000o or even $215000.00 Funny thing is, it will sell within 10 days.0
Home Prices are going up. I can tell! There is a lot of momentum for home buying!
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If you are a buyer, don't wait, buy now! We seemed to hit bottom in the 2nd quarter of 2012!
Sellers... it is a sellers market again!
Call Me And Consider It Done!
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