Editor’s note: The following is a collection of real estate professionals’ views on an industry-related topic.
QUESTION: What is the current state of home prices and sales in your market area?
Kastings & Associates Real Estate Services
My niche market is rural country homes, so the price of gas must be factored into the slower real estate market. However, in my neck of the woods, the higher prices of close-in locations negate any monthly savings for fuel. But I do find that I oftentimes have to run figures for buyers so they can see just that.
Buyers are slowly emerging cautiously, primarily seeking deals and steals. We have high listing inventories, and definitely longer market times, though I see few that fit the "deals or steals" category. Pricing has become all-important for sellers, and appraisal values hard to predict for lack of sufficient sales in the past six months. Thus, like appraisers, actives are influencing both list prices and appraisals.
When I’m pricing listings, I give the "sold" and "pending" weight to get to the fair market ballpark, then figure list price based on the sellers’ motivation. If there are similar features … for active listings in the same commutable distance, we try to aggressively price for added enticement. The theory being that if there are one or two serious buyers out there, we want to snag them over the others.
As far as prices, a healthy "market correction" is probably the best assessment I can make. Today’s prices are probably a normal 3-9 percent annual appreciation over prices about three years ago (our area’s norm).
Overall, country acreage is holding its own. Land and country estates, ‘green’/survival homes, or ranches for livestock just don’t go out of style, despite the price of a gallon of gas. The "lifestyle change" to get back to the basics is alive and well, though perhaps the buyers’ ranks have thinned somewhat.
Real estate professional
MaxWell Capital Realty
Calgary, Alberta, Canada
As expected with a sudden surge in home prices as we saw in Calgary through 2006 and the first quarter of 2007, we are now seeing a correction which is bringing prices down. Some homeowners and potential purchasers have been concerned about how low the prices will drop: "Is our market crashing like the U.S.?" My answer is "No." The reason we can safely say this is because in our market there are very few foreclosures — we are not seeing hundreds or thousands of homeowners being forced out of their homes. The vast majority of properties for sale in the Calgary market right now are homeowners who are choosing to sell.
On a side of caution, when we look at the entire world economy Alberta is not immune to what we see in Britain, Spain and of course the United States. Watching the entire world economy is very important and the world economic forecast is not very strong as consumer confidence drops, inflation rises and home prices drop. We definitely need time to see how the bailout of the American mortgage giants affects the U.S. housing market, as well as what happens in Europe as Britain teeters on full-blown recession.
For now, we are simply not seeing "fire sales" for homes. Yes, the prices are down but there are plenty of cards to fall into place before I would say that we are heading to a "crash."
Landmark Realty Corp.
Abbotsford, British Columbia, Canada
The current state of the real estate market (relating to sales and prices) here in Abbotsford and the Eastern Fraser Valley of British Columbia is one of information overload. Buyers and sellers are getting information from many different sources, giving them all sorts of different answers. This has set us up for a fairly volatile market — one where we have a lot of homes on the market, buyers who are extremely cautious, and sellers who tend to expect the same results as their neighbors received a year and a half ago when they sold.
The result is a mixed bag of answers depending on which agent you talk to. Some are having their best year ever and some feel like the "bubble is going to burst." The reality is, the numbers indicate we are in a similar market to 2005, which at the time was a great market but nothing compared to mid 2006-to the fall of 2007. I think if the seller prices a home properly (with the help of a real estate agent) the home will still sell in a reasonable amount of time. Buyers can find great deals because of the quantity of homes available. Realtors have gone from order takers of two years ago to having to pound the pavement again. It is quite refreshing — it has begun to make us very creative again. No more plunking a sign in the lawn and waiting for the phone to ring. The Internet has become a huge factor in our marketing efforts.
Arlene Garcia Hanner
I work in the greater Southern Los Angeles County area. Since home prices have significantly dropped from the highs of 2005-07, aggressively priced properties have been moving quickly. Many of my clients are focused on the better-priced foreclosure homes that are still in relatively good condition. However, the competition for these properties has been keen with multiple offers being written up and mini bidding wars ensuing. Many agents with REO properties having multiple offers have been instructed to toss out offers that are 100 percent financing or close to it, including FHA or VA loans. The best deals are going to buyers with the largest down payments.
Unrealistic sellers pricing their homes at yesterday’s prices and offering penny-pinching commissions are left to listen to the crickets at their near-empty open houses. Smart homeowners are taking their agent’s advice to spruce up and possibly stage their home, in addition to competitively pricing it to attract a buyer.
There are certain foreclosure properties that can benefit from this bit of advice. Too often I have come upon a home that needed some rather obvious fix-ups for a quick sale and yet the properties sit, ignored. Examples are otherwise decent homes without a heating system or the kitchens removed, etc. This is why it is so important to connect with a good agent who has the resources and ability to recommend the work to be done to get the property sold.
If you listen to the news all you hear about is the "foreclosure crisis." What people don’t hear is that there is a feeding frenzy going on. Home prices are at their lowest in years. People who once could not afford homes are now in the market. The best values in homes have multiple offers (sometimes as many as a dozen or more). Foreclosures, short sales, resales, lease options or new homes — what to do? For those not prepared, finding the right home at the right price can be a frustrating experience.
Information compiled by Lai Saetern, Inman News.
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