Many of my fence sitting clients are now starting to call me because they are seeing the market go up and want to get in before it's too late. These are the folks who were looking a year ago and just couldn't make up their mind. They wanted to buy at the bottom. I don't understand that because it would have been maybe a $5/month difference on their payment if they bought back then vs. waiting a couple months for the market to go lower.
So, have we hit the bottom? Have we started to go back up? I think it's a false reading because the seller's market here in Northwest Orange County, Lakewood, Cerritos, and Long Beach areas are fooling us. It only seems like a seller's market because the bottom fishing properties are gone or if they appear, they are snatched up in a second by a cash-buying investor, often for higher than listed price.
I, unfortunately, have several friends who want to buy - as first-time buyers, and they would like to take advantage of the tax credit. They are also coming out of the woodwork. But they are finding that properties are not plentiful, and even if it is an REO, it has a line up of buyers ready to put down way more money than they have set aside.
It's crazy bidding time, and unfortunately many first-time buyers don't have the means to put more than an FHA minimum down or maybe up to 10% down - and if it isn't an FHA type deal, they can't come up with 15% to 20% down. On a slim $200K home, the $30K down plus $6K more to close may be hard to swallow for a young buyer/family just starting out.
Move up buyers - that's a good market! But they still want to stretch the bargain deal and get more for their money. But then they want to sell their current home for as much as they can. They are selling to the first-time buyers who have no money to spare and a set price they can afford. It seems like you can't please anyone.
I just now got a call from a friend who is looking at a junker home in Anaheim. He said that one just like it sold in Sept. on the next block for $185K, but it was in much better condition. This one, the junker, is in such bad shape that the redwood on the back of the garage is all gone - there is a gaping breezeway instead, and the listed price is $200K. I called the listing agent and this shortsale is already in front of the bank for higher than asking price. They have an all-cash buyer, a 50% down buyer, and probably one more - and the bank has to choose. They are only taking backup offers. Crazy, right? My friend may have 10% down, tops.
Due to lack of inventory, the seller's market is in full swing in the lower-priced homes in this market. I think we have to start looking in Victorville for a real deal. I found one for $90K, 4 bed, 2 bath, 18000 sq. ft. lot. for a guy, today, who came over selling Kirby vacuum cleaners. Not bad - but I really don't think any of my clients want to live out there and work here. Oh, well, that is where the bargains are and the buyer's market is - in Victorville, Riverside, and San Bernardino!!
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