Homeowner, Are You Thinking of Listing Your Home? Consider...

I've been away awhile and it wasn't because I was off in Hawaii or Vegas or something fun like that.  My husband shared his virus with me and rather than put off seeing the Doctor until I had pneumonia, like he did, I went to the doctor on day one of feeling sick and she said, "Go home, get in bed, and stay there for three days and you just might kick this without antibiotics." 

I did the bed thing, but didn't get away without having to take antibiotics.  Today is day 6 and I'm finally feeling better, thank you for asking. 

Tonight on the way to Bunko, my friend said she believes home prices in Del Norte County are going to rise by quite a bit very soon.  I asked her why she thought that to be true and she said because the baby boomers want to retire to somewhere like Del Norte County. 

Well, I totally agree with baby boomers wanting to retire or relocate to Del Norte County.  I worked with a lot of buyers in 2007 and the majority of those were people relocating from the Inland Empire, the Bay Area, Santa Cruz, and L.A.  All of my clients said they had had enough of traffic and rude people (Del Norte does not have traffic or rude people BTW). 

Unfortunately for my friend, because she is hoping to sell pretty soon, positive thoughts will not drive up prices.  I gave her the following example:

You have three homes for sale on the same block in a neighborhood and all three are fairly similar except for their owners. 

1. Moe is relocating due to a job transfer.
   
   
2.  Curly is moving up to a bigger home on some acreage.  He has owned his home for 10 years, so despite the drop in prices he still has equity, but he does need to get a certain price for the home to keep his new mortgage affordable. 
   
   
3. The other homeowner, Larry, purchased his home at the height of the market in 2005 and his ARM has started to adjust up.  He thought his home would have appreciated enough for him to refinance into a 30 year fixed by now, but the home is actually worth less than he paid for it. (If you need to consider a short sale, please call someone who has experience in that niche of the market [just so happens I do].  And do not wait until 10 days before the bank auctions off your home.) 

Fair market value for these homes is in the $285,000-$300,000 range.  Larry, the guy who is upside down in his home, is 3 months behind in his payments, so in a last ditch effort to avoid foreclosure, he lists it with an agent adept in short sales and gets an offer for $250,000, which the bank agrees to accept. 

Moe lowered his listing price from $299,000 to $280,000 in order to try and compete with the short sale that listed at $275,000 .  Hurray, Moe got an offer once he lowered his price but the buyer came in at 10% off the asking price, or $252,000.  Moe and his agent negotiated it up to $265,000. 

Now Curly wants to list.  His listing agent is telling him he will have to consider those two comps in pricing his home if he wants to get a timely sale.  Holy cow.  Just a few months ago Curly's neighbors sold their home for $325,000 and he was counting on getting at least $315,000, but his agent is telling him that is pretty unrealistic. 

Prices can fall very quickly in a market where seller's are highly motivated.  In this current market, there are a lot of very highly motivated seller's out there, and a plethora of sophisticated buyers who are coming into the market with their Zestimates in hand (I find them to be totally inaccurate, but that's another story) and want a deal. 

Curly, sadly decides to wait on purchasing that nice home on acreage until prices recover and he can get the price he wants.  If prices can fall that quickly, surely they will rise that quickly.  Uhhh, no.  Doesn't work that way too often.  For one thing, every other motivated seller in that neighborhood just dropped their listing price further hampering Curly's listing price. 

Since every single expert I have read says that prices are going to continue to decline for at least a year, when they do come back up, it will be slowly.  One neighbor will get $275,000 for their home, then the next seller will have the comp to support a slightly higher price, he'll get $280,000 maybe $285,000 for his house, that will be a comp to support a slightly higher price and so on.  It will more than likely be a slow, but steady progression. 

In Del Norte County we are more sheltered from what is going on in the housing market than the rest of the country and the rest of California in particular because we did not overbuild, leaving a huge inventory of newly constructed homes without any buyers, our lifestlye seems to be a bit more simple than that of most Californians, and we are a highly desirable place to relocate to.  Our median price only dropped 6% from 2006 to 2007, compared to California's average of about 14%. 

Del Norte is definitely holding up better than most markets, but prices are declining and will more than likely continue to do so for awhile.

If you need to sell your home in this market, make sure your home is properly priced.  You can still realize your dreams with a timely sale if your listing is handled in the right way.

 

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Thank you for stopping by. Your comments on this post are welcomed and appreciated.
No one sold more homes in Del Norte County in 2012 than Fran Gatti. Put Fran to work for you!

 

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