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Multi offers over asking price in NoCal ... sellers market or a bounce on the bottom??

By Doug Boedecker

Services for Real Estate Pros with Sunbelt Network

May 14, 2009 11:59 AM

We knew we had a great property but we were very surprised that we received 10 offers all well over our asking price. This was on a SFR in Patterson, CA. Our research showed a strong rental market for this product that was selling for $500k+ at the peak of the market. The replacement cost is much higher per sq.ft than the $154k we were asking. With 20% down this cash flowed a little positive on a 30 yr.

We did not get a sniff on the investor market (o.k., a couple, but no offers).

Once we put on the MLS/owner occupied market we received 10 offers 10% or more over the $154k asking price within a 5 days. All offers were from local owner occupied buyers. Here's a link to pics and property info: http://northpointgroup.vflyer.com/home/flyer/home/2369089

We are hearing from our realtor connections in Modesto, CA that they are getting about 5 offers per listing, about 50% from the 1st time buyers market and 50% from the investor market.

Not sure how long it will last but we have experienced the shift from a buyers market to a sellers market almost on a dime. I am now lining up buyers in advance of re-hab work being done in order to have the best chance at the best properties. Remember, investment offers may have an advantage over FHA buyers because of the holding costs and other factors.

Is this truly a sellers market or, as one of my more colorful colleagues called it, " a dead cat bouncing"???

Any thoughts?

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Bob Foster

Century 21 Lanthorn R. E. Ltd. Belleville, Ontario - Belleville, ON

We're seeing the same thing up here in Canada, Doug. Increasing prices and still lots of competition. It hard to sort out what part is spring bounce and what part may be market recovery.

May 14, 2009 12:07 PM

Renee L. Norton

Birmingham, AL

Whichever it is just be grateful for the business while you have it!

May 14, 2009 12:13 PM

Sandra White

John L Scott Real Estate - Port Townsend, WA

Experienced Residential Resale Broker

This is a very different market...haven't seen any thing like it in 29 years of business. Only time will tell if your bounce will last. All the craziness going on in the government has to have a long term effect.

May 14, 2009 12:17 PM

Bob & Carolin Benjamin

Benjamin Realty LLC - Gold Canyon, AZ

East Phoenix Arizona Homes

Same thing is happening here is Arizona -- will be interesting to see how it all pans out.

May 14, 2009 12:34 PM

Doug Boedecker

Sunbelt Network - Pleasanton, CA

thanks for the responses. I guess it's an illustration of how all real estate is local. I'm wondering how all the Alt A ARM's adjusting will affect the foreclosure rate/market. At some point the 1st time buyers market will dry up, then what? Investors, right now, seem to be more cash flow concentric than appreciation, at least as far as SFR investments go. Many of the the Alt A foreclosures will probably be in areas that won't cash flow with 20% down. Are there enough owner occupied buyers to soak up the inventory?

May 14, 2009 12:37 PM

Konnie Mac McCarthy

MacNificent Properties, LLC - Cobb Island, MD

Broker/Owner - VA & MD "Time To Get A Move On!"

I say bounce at the bottom...we are seeing that too here...multiple offers.

May 14, 2009 12:53 PM

TIM MONCRIEF

Tim Monciref - Austin, TX

Over 2,000 homes sold…..

There is usually a bounce during a recession, though that is not a rule. The key is jobs. When you start seeing unemployment start to flatten, then you will see reality. At this point we are seeing hope and optimism. God willing, that will turn into a better job market. We are definitely not there yet and only time will tell. This summer will be a good test of where we are going. It still could go either direction. i.e. Be cautious.

May 14, 2009 01:12 PM

Road House Realty

Road House Realty - Orlando, FL

We are having the same thing happening in Central Florida right now. People are just buying up all these bank owned properties left and right. We have few customers that have been getting out bid in more than 3 properties... by people offering above the asking price.We are like are you kidding me????

May 14, 2009 02:22 PM

Konnie, are they REO properties that are getting multiple offers primarily? That's definetly the case out here.

Tim, I think I agree with you that this summer will tell alot. I'm not sure if a slowing in the unemployment rate is really a flattening that was just announced, I think it needs to go down much more. How's Austin looking? I placed a few investors there in the last couple of years. Not so much lately, mainly because we can't find cash flow with 20% in the neighborhoods we want.

Road House Realty, thanks for the reply, we did have properties in Jacksonville about a year ago but we couldn't generate much interest from our clients out here in California. Now that prices are so low here most want to stay closer to home. Good luck to you.

May 15, 2009 06:08 AM

Multi offers over asking price in NoCal ... sellers market or a bounce on the bottom??

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