Don't Let the Data Get You Down
April 8, 2009
The numbers just posted in the past week for real estate sales in the Inland Empire may look to the pessimist as if the glass is half empty, but to the optimist, the glass is looking half full. It seems that there is an increased number of folks ready, willing and able to purchase a home. The ratio of sales to listing is indicative of an upward trend in volume.
Admittedly, buyers are looking for "value"; i.e. a perceived "real deal". However, list prices seems to be stabilizing and even showing some increases over similar properties that transacted a month ago. Like all transitional markets, a catch in either the upward or downward trends in a real estate market is the need to find comparable sales in order to obtain an appraisal. In a downward market, the appraisals tend to be higher than the agreed on selling price. In an upward moving market, the opposite is true; appraisals seem to come in below that agreed on selling price. This appraisal gap causes an upward moving market to change more slowly than a downward moving market.
Anyone who looked at the data just posted will see that affordability is at a seven year high. Rather than having the data discourage a buyer, it should encourage buyers to check out the inventory and take advantage of the opportunities that abound. Those who are fearful that prices will decline further, could still be checking out the inventory. Making a lower than asking price offer could work, but even if it doesn't get accepted, you will learn what the house might really be worth to you.
Added to the great inventory is the government stimulus that is keeping interest rates around 5%. At some point in time, these opportunities will change. My mantra continues Coulda, Shouda, Woulda.
The numbers just posted in the past week for real estate sales in the Inland Empire may look to the pessimist as if the glass is half empty, but to the optimist, the glass is looking half full. It seems that there is an increased number of folks ready, willing and able to purchase a home. The ratio of sales to listing is indicative of an upward trend in volume.
Admittedly, buyers are looking for "value"; i.e. a perceived "real deal". However, list prices seems to be stabilizing and even showing some increases over similar properties that transacted a month ago. Like all transitional markets, a catch in either the upward or downward trends in a real estate market is the need to find comparable sales in order to obtain an appraisal. In a downward market, the appraisals tend to be higher than the agreed on selling price. In an upward moving market, the opposite is true; appraisals seem to come in below that agreed on selling price. This appraisal gap causes an upward moving market to change more slowly than a downward moving market.
Anyone who looked at the data just posted will see that affordability is at a seven year high. Rather than having the data discourage a buyer, it should encourage buyers to check out the inventory and take advantage of the opportunities that abound. Those who are fearful that prices will decline further, could still be checking out the inventory. Making a lower than asking price offer could work, but even if it doesn't get accepted, you will learn what the house might really be worth to you.
Added to the great inventory is the government stimulus that is keeping interest rates around 5%. At some point in time, these opportunities will change. My mantra continues Coulda, Shouda, Woulda.
posted by shirley harry at 8:38 AM
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