The last three or four months in California (well most of the state anyway) have been a heady return to the days of multiple offers. Declining inventories have lead to a mini frenzy on many properties. Prices have started to inch up. Don't worry, no one is going to get whiplash from the speed that they are rising but they are indeed rising a little. Homes that are in tip top shape sell first, followed by homes that need just a little work followed by great buys on big fixers in good areas.
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Sales Surge In California[/caption]
This trend has bypassed properties with high Homeowners fees, it has also excluded most condos - Single Family homes are the darlings of the current market. Great prices on homes/condos have had the negative effect of making the HOA fees really jump up and hit buyers in the face. Ironically, it is the best priced condos that often have the worst time of it. While many people will take a closer look at a nice condo for a mere $100-115 thousand they hit the pause button upon finding out that the monthly dues are over $400. At todays' historically low interest rate that is almost as much as the mortgage.
Many reports on the state of Real Estate focus endlessly on the numbers 49%-55% decreases in inventories year over year, and as mentioned earlier the modest surge in prices. It would be easy to interpret this as a positive sign of a rejuvenated housing market. Underlying these trends though some economists are pointing out, are the harder facts. Only about half of the homes purchased are being bought by primary home owners. That means the other half are being bought by investors that want to fix and flip or fix and rent. The economist say this points to low demand despite record low interest rates consumers are not flocking to buy homes. The underlying economic conditions of growth in the economy and lack of jobs is holding the average home buyer back even with 3.5% interest rates!
The point here is not to say that all is lost. Movement in the market is still good. Banks still have years of work to do to reduce their foreclosed inventory. It is debatable how they will do that but that is for another blog post. Some new construction is starting to spring up or get restarted. Inventory levels could change depending on these two segments alone. It has been talked about lately, that the banks may start selling off their inventory in bulk sales. That could change the market drastically. Also, investors could shift gears. If they are unable to find tenants or buyers for their flips they won't be buying more. The economy could improve the only constant here is the fact that things will change.
This leads me to the point that I don't think should be missed. If you are in a position where you know you want to sell your home in the next 6 months, do not wait. Now is the time - seize the moment and do it now. After almost 12 years in the business I can personally attest to the fact that in every market condition the market tends to shifts about every six months. The shift could be availability of financing - inventory levels - consumer confidence or something as mundane as popular price points but it will shift. We are drawing close to that six month window, sellers now is your moment.
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