Sonoma County Real Estate Market... When to buy.

By
Mortgage and Lending with Sequoia Pacific Mortgage

This article helps to support the idea that working with a Real Estate Agent that understands the market is more important than you may think. I work with all my clients to get them the house that is right for them and their budget. I am very aware that the market is shifting and advice my clients to do what is the best for them.

Below are a few highlights from an article written by George Mannes, from Money Magazine that helps to outline what the signs are for a shifting market and which way the shift is heading. In addition to these I feel that it is crucial to take a look at the economy of the region in addition to lending practices. If we have weak job growth for example I would be hard pressed to think that we would see a large increase in housing prices. Mortgage interest rates also play a crucial role in the market so keep a good eye on what is happening. When rates are low more money is borrowed, when rates are high less money is borrowed.

How will you know?

Housing markets are intensely local, it won't do much good to check national figures. Instead, stay alert to leading indicators of recovery in your local market, such as:

Inventory is declining

"A real estate agent should be able to tell you the months' worth of inventory - that is, the estimated amount of time, given the current pace of sales, that it would take to sell all the homes currently up for sale.

In markets with fewer than 6.5 months of inventory, homes tend to be appreciating faster than inflation, says Mark Dotzour, chief economist at the Real Estate Center at Texas A&M; above 6.5, prices are lagging inflation.

Above nine or 10 months, prices start to drop, creating an ice-cold market for sellers. Compare the current data with that of the previous few quarters to see whether the trend is downward or upward."

Houses are selling faster than they used to:

"While you're asking your broker about inventory, ask how long the average house that sells has sat on the market and how that compares with figures from last quarter or six months ago.

Generally, if the average house is selling in less than a month, it's a seller's market. By 90 days it may be a buyer's ball game."

Realtors are feeling better:

"Your broker's thoughts might not be reflective of what's really going on. So check the website RealtyTimes.com and click on Local Market Conditions to read agents' reports on specific markets with ratings from 1 (buyer's) to 5 (seller's).

The agents have an agenda - they pay for the privilege of posting - but their collective wisdom and specific entries can help you determine the mood."

This can offer great insight into what is happening in the market but ASK aournd! Do not take 1 agents opinion of the market as factl.. what does the local press democrat say? What do the numbers say? What do veteran Real Estate Agents think? ASK people who KNOW the market!

Sellers are acting less desperate:

"Either by reading the classifieds or by scanning FOR SALE signs on your way to work, pick a handful of homes comparable to yours or one you might buy (think similar size and school district) and check on them weekly.

Does the asking price get reduced? Are the owners constantly holding open houses? Are they throwing in incentives? Does the ad gain more exclamation points?

All this should give you a hint, says Sacramento broker Elizabeth Weintraub. "If you're seeing no decrease in FOR SALE signs, balloons and banners and OPEN HOUSE signs, and the SOLD signs aren't popping up right away, that's pretty much telling you it's still a buyer's market.""

 

You can read the whole article at:

 http://biz.yahoo.com/hmoney/070619/061907_housing_rebound_moneymag.html?.v=1&.pf=real-estate

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