What a wacky market! What else can you say? Longtime real estate agents and appraisers alike are saying, “I’ve never seen a market like this before.” Appraisers call me regularly, asking about houses I’ve sold, trying to find out if it involved a duress situation or crazy financing or concessions. Because appraisers (like real estate agents) use comparative sales (“comps”) to determine what a house is worth — and those comps are all across the board these days — you’re left questioning the true market value.
It’s an interesting dynamic. We have sellers who have owned their houses a long time and have lots of equity and room to move on pricing. We have sellers who bought their home in the last few years, and the house is worth less than they paid for it. They need a high price. We have bank-owned properties that might be a good price but have been abandoned and neglected. Then there are the short sales, where the price is less than what the sellers owe on their loan. They ask the lender to “forgive” the difference, which is typically the step before foreclosure. Some of these are at incredible prices, but buyers are wary because They could wait weeks — even months — for a bank response. Even if a buyer is willing to pay the listing price, the bank might deny it.
Where does that leave buyers and sellers in today’s market? If you need to sell, how do you figure out the right price? If you want to buy, how do you make sure you get a good deal? It’s not an easy maze to figure out, but here are some thoughts:
First, real estate is cyclical. If you look into the past, you will see ups and downs. There have been tough times in the past, and worries that it would never get better (17 percent interest rates!). Somehow, though, things turned around and the real estate market improved. I don’t have the crystal ball telling me when it will happen, but history speaks for itself. I have confidence we will again see an appreciation in home prices. Investing in real estate now, when prices are down, should pay off for you in the future.
Next, be realistic. The market is what it is. We are in a buyer’s market. If you are a buyer, this is fantastic. Take advantage and make your move. If you are a seller, realize we are no longer where we were two years ago, and no matter how great your house is, it won’t be spared from what the market is saying. A realistic approach from the beginning will lead toward success in the end. Sellers who are realistic about the market are selling their houses.
Additionally, rely on a professional. Everyone from Uncle Ernie to the guy at the market has an opinion on the market and the value of your house. What you really need in a crazy market is someone with knowledge and experience — someone who is showing houses, selling homes and working full-time in the real estate arena. Make use of real estate professionals to help navigate the twists and turns. A real estate agent who is successful in today’s market is a real estate professional who knows what it takes to get a house sold in these circumstances. Whether you are a buyer or a seller, you should take advantage of their expertise.
Finally (I remind myself daily), stay positive. The media love to paint the doom and gloom picture. We need to find the best way to make it to that light at the end of the tunnel. It doesn’t have to be negative. This too shall pass. Before we know it, this wacky market will be gone.
Contact Lara Wells Osborn at Coldwell Banker C&C Properties – Westside, 1801 Buenaventura Blvd., Redding, CA 96001. Cell: (530) 276-3026. Fax: (530) 419-1167. Email: laraosborn@ccproperties.com or larawellsosborn.com.
