March is well upon us. Daffodils are blooming, fields of mustard provide color in the country, and the question is will the real estate market bloom as well?Reporting from the trenches in Pleasant Hill, California I have observed sales have picked up. Buyer's are bargain hunting and finding some really, really good deals out there! One man's loss is another man's gain; a truism today. One person loses the house to foreclosure and the bank DUMPS the price to get it sold! No emotions; it is all about getting that home out of their inventory. And good deals abound in those situations. The side result? Normal home owner's who would sell to get a bigger home or a different neighborhood are mostly not. With prices down 20% they hate to take the hit on their home sale. Of course the answer to that is they make it up on the one they buy!
Timing the market? Whether it be the real estate market or the stock market, it is tough to do. Some experts say our market will have bottomed out when prices firm up and stay even for six months. But will that happen in the San Francisco East Bay? Always more affordable than the City, the Peninsula, Marin, the Oakland Hills, central Contra Costa has enjoyed huge demand, thus pushing prices into the stratosphere. We predict the minute the market shows signs of recovery, or of hitting bottom, buyer's will come out in droves and start snatching up all the homes for sale; surely causing another supply/demand issue. Prices might start moving up faster than experts predict.
But the bottom? How can we time it? Listen carefully to news reports about the number of outstanding adjustable rate loans yet to adjust; that is a gauge of how many homeowners might still be at risk of losing their home to foreclosure after trying a short sale. From what we hear we have months and months yet to come of anniversary dates when loans originated at the top of the market will adjust to a higher payment, forcing the buyer's (who thought they could refinance when that happened) to make some tough decisions about selling or walking away from their dream home. It is sad, very, very sad, as so many Americans are finding the American dream of home ownership turning into a nightmare.
Pleasant Hill is not as at risk as towns further east; the lower end is showing some true bargains as those were the homes that sold at price points marginal buyers and investors bought when prices were going up. Those are the buyers who are walking away; the marginal buyer who cannot afford the loan payments when they adjust to a higher rate, and the investor who planned to rent it out and pay out of pocket for negative cash flow, justified when prices were going up but no longer, or who planned to fix up the house and sell for a profit, only to see their equity disappear as prices fall.
Contact us for a rundown on currently listed bargain properties!
We look forward to hearing from you.
Posted By Don and Norma Flaskerud to Pleasant Hill Real Estate and Area at 3/09/2008 11:29:00 AM