Taking a trip down memory lane: media articles from 2004
Why should you not believe the hype this year? Because you believed it last year and you got screwed, perhaps?
Just for fun, I’d like to direct your attention to a piece from the October 6, 2004 SF Chronicle about how the market couldn’t possibly continue at its torrid pace. If you’d like, we can go back and find some of those same articles from the fall of 2003, the fall of 2002, and especially the post-9/11 fall of 2001.
From Kelly Zito’s article, “…some analysts believe the trade group’s outlook for prices in 2005 is too rosy. “What the heck is going to drive 10 percent higher prices in the Bay Area?” said Michael Dardia an economist at the Sphere Institute in Burlingame. “There’s still been no job creation… and rents are already down.”"
What’s my point here? If you are thinking about buying a house right now and have decided to ‘wait’ due to what you’re reading in the papers or hearing from ‘economists’, then you might be kicking yourself once again after the holidays when things pick back up as they have every year since the beginning of time (with only a few exceptions, of course).
When should the housing market have dropped? When there were no jobs and when the economy was on shaky ground. Now we’re seeing stronger job creation in the city, rents are going up, and there’s only a couple of things that might put negative pressure on the housing market. Right now that thing is inventory.
What that means for buyers is SELECTION of properties. All those times you were willing to write on a property against fifteen other offers because that was the only condo available in Noe Valley will seem like a nightmare compared to what you can find now… Properties are almost all priced at value, meaning you like it, you write an offer at asking, and you buy it. You can even take a week to look at other properties and make a decision.
Bottom line: I could be wrong about how strong the market will be next spring, but I would encourage buyers to not get sucked into the hype. Many of you have been banking on a huge crash that never comes, and this might be the closest you’ll see to a normal market for a long time.
Don’t buy the “no where but up” hype. The market has turned in the City, perhaps for some time into the future. Since the peak in July ’05 housing prices have dropped by at least 7%. “Reduced” is the key marketing tool that you should be looking for. Price reductions have been largely in the high-end market, but also prices have been dropping in the 1-2 bedroom market as well. Expect prices to continue to drop by between 3-10% by next August, so wait at least one year before buying. As always, though, keep your eyes open for good bargains.
Anonymous at November 3rd, 2005 at 10:12 pm ( )Seeing as how this commenter chooses to hide behind anonymity, we’ll never know which non-real estate industry they’re getting their information from. My opinion is my opinion, but I think this comment is way off base. Call me in March and we’ll talk about prices again then… Or post another anonymous comment acknowledging that I might just be right…
Let me know when they start building enough housing to handle the demand in this town, then we’ll talk about prices dropping.
Just because you see ‘price reduced’, doesn’t mean that prices are dropping. It means that one particular property was mispriced, either by the seller or the agent, for that specific period of time.
You must look at the big picture, my anonymous friend, not just some snapshot. And no, the peak was not in July. Not on the streets it wasn’t… But perhaps in some economist’s data file…
Matt Lanning at November 4th, 2005 at 8:14 am ( )