Housing market headlines can be misleading
From Dian Hymer @ Inman News…
On Jan. 20, 2005, a headline in the San Francisco Chronicle stated that Bay Area home sales were down and that prices slid. If you, like many readers, scanned only the headlines, you might have thought home prices in the area had plummeted. Actually, they rose 14.3 percent between December 2004 and December 2005, according to DataQuick Information Systems.Sensational headlines sell newspapers. Who wants to read about a real estate market that’s not as robust as it was a year ago–one in which home prices aren’t going up as fast as they were this time last year? Ho-hum news doesn’t do much for newspaper sales.
Behind the scenes of the Bay Area home sale market, the real story is not that home prices “slid” from one month to the next. It’s that the market is doing surprisingly well despite the negative press. In a nutshell, well-priced homes that are properly prepared for sale are selling for good prices and within a reasonable period of time.
I know that continued positive news doesn’t sell papers, so you’re not reading about what’s actually happening in this market right now… But on the streets, we’ve seen a HUGE shift in the market in the past three weeks. Anything that is priced well, marketed properly, and not overlooking a freeway is selling in the oh-so-2005 timeframe of two weeks or less, and usually with multiple offers.
That’s not to say that there aren’t plenty of over-zealous sellers who are shooting for the moon with their asking prices, only to find out that buyers are a bit smarter than they were last year. This means that there are deals to be had, but only with proper understanding of the market.
And if you’re in the market now, just make sure to get educated about what the ‘real’ values are for the home or condo you’re interested in. If you know you’re paying a fair price (based on historical data), then it doesn’t really matter where the seller priced the home or how many other people are interested in it. Likewise, just because you’re the only offer on a property, doesn’t mean you’re getting a good deal.
Remember, as someone much smarter than me always says, knowledge is power. Work with a good, local agent who knows the neighborhoods you’re interested in. Get good stats and comparable sales for the price range you can afford, then find the best thing available and make your move.
Just ask the thousands of people who have been counting on a market crash since 1996 how the waiting game has worked out for them…
And even more importantly, what does Kelly Zito have to say about all of this?
A Balanced Market: Setting the record straight [SFHomeBlog - Feb 17, 2006]
Three straight days of sensational journalism from Kelly Zito [SFHomeBlog - Jan 20, 2006]
“Just ask the thousands of people who have been counting on a market crash since 1996 how the waiting game has worked out for them… “
Who are these people?
Were you even a realtor then?
In 1996, there were a lot of people in the Bay Area who bought properties five or six years earlier who were “underwater.” Especially so considering inflation.
Just where did you get this “crash since 1996″ idea?
sf jack at April 20th, 2006 at 10:29 pm ( )I have been working in San Francisco real estate since 1998 and dealing in real estate since 1994. 1996 is the year that the skeptics with whom I cross paths in my business refer to when they talk about when they ‘should have bought’…
It’s also when the market really got hot again post-1989, with strong run-up in prices till today (with really only a minimal dip post-9/11).
As for those people who were still ‘underwater’ in 1996… if they hung on for a year or two longer, they did just fine, and if they own right now, they are rolling in equity…
And the same will go for anyone who may have paid top dollar against 25 offers last year. They probably couldn’t sell at a profit right now, but the market will continue to climb over time (like it or not) and they’ll do just fine as well. Just depends on the situation as to how long they’ll need to wait.
I judge whether I have done my job for my buyers when I know they could put their new house on the market the day after we close, and after paying all of their taxes, commissions, and fees, they could still make a profit. And trust me, it happens more often than you might think…
I appreciate your comments, but give me a break on the anecdotes that I use… I’m not quoting facts, nor pretending to. I’m just giving readers a reference point based on my experiences.
If you want some factual data, read this post which includes data showing that the peak of foreclosures was in Q1 of 1996, after which the market shifted and prices took off.
Matt Lanning at April 20th, 2006 at 10:57 pm ( )I recall that the market took off in ’96, as that is when the early stages of dotcom mania took hold in the Bay Area.
And I don’t doubt that you’ve done very well for clients – to your point about them being able to profit should they sell nearly immediately after buying (though you should note, no doubt as you have, that you’ve operated in best market conditions ever seen locally).
And I agree that people who bought in ’89 and were under for five or six years are now doing well.
But what about those who had to sell, for whatever reason, between ’90 and ’96?
And what if some somebody on the cusp of buying in ’89 or ’90 “held off” for a few years and bought instead in ’93 or ’94. This latter group has probably done well, too.
If not better than the former one.
I know a lot of this includes “timing” – never an easy thing, especially as “life gets in the way”.
At the same time, I have to say, that versus other recent times (last few years) it’s rather obvious now where the market has been *and* that conditions have changed significantly over the past 12 months…
sf jack at April 20th, 2006 at 11:32 pm ( )