Our market in Southern California has changed so much. We are seeing many short sales and foreclosures. Great neighborhoods have abandon homes that the bank has not started marketing.
Most of the sales in our area in the past few years were 100% financing with the seller paying closing cost. The new buyers might have gotten into their new home with $1,000 to $2,000 ernest money! Since their payments on their adjustable started low, they had extra money to buy new SUVs, boats, motorcycles, four wheelers. Then this year when their loan payments adjusted where their payments went up $1,000, families got in trouble.
Others in larger homes had pulled out their equity to work on their homes---new hard-scape, pools with boulders and many waterfalls (each waterfall raises the price of your pool) If they could get a higher appraisal, it just meant more money could go back into their home because they felt that they were just raising the value---------and then times changed.
Now when I go to list a home, one of the things I hear over and over is----
I'm not going to give my house away!
You are not giving your home away.....when inventory goes up and buyers become more scarce, you go back to the classic example of supply and demand which runs our entire economy! If you don't need to sell, you need to back out of the market!!! You are going to be upset that all of your hard-scape, granite counters, and stuff are not bringing you bigger dollars. You will be competing with short sales, foreclosures, and even other seller that need to sale because they HAVE to move because of job relocations, divorces, or financial problems. You, as a non-emergency seller (trying the waters because I think I might want a larger home), do not have any control of the market! The value of your home is not based on the high listing price that was on a flyer in front of a neighbor's home---that eventually was pulled off of the market because the price was too high!! (How many times have I heard that!) The value of your home is determined by what someone will pay for it not by what you need (want to have to upgrade) for your new home!!
Todays homes have to be priced to sell. Price is the selling point----
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