Warren Buffet attributes much of his wealth to buying when people are fearful, and selling when they are feeling greedy.
It sounds to me as though the tom-toms have been beating. The recent increase in sales volume in Placer County appears to indicate just that.
When I returned from my vacation I picked up my phone and started interviewing several top producing real estate agents. I wanted to know what was going on in the market today. I asked each agent if they had any advice to offer.
Pam Moore of Lyon Real Estate insists that price is the key. Moore believes that when a seller lists their home for sale, they must be ready to move. They need to have their home “show ready” at all times.
Her advice? “Take the advice of your agent!”
Moore explained that the longer an over-priced property stays on a declining market, the less money a seller will ultimately get.
Sellers continue to pay taxes, insurance, HOA dues, maintenance and house payments while the home’s value continues to go down.
Moore said, “If you don’t need to sell now, I suggest keeping your home off the market.”
Mike Robinson of RE/MAX Gold agrees. He said that if you don’t have to sell right now, don’t put your home on the market.
“I think we are sitting on 2003 prices. Buyers and sellers just have to understand that prices go up and down, but in the long run the trend is up,” he said.
Patrick Hake of RE/MAX Gold, like Robinson, enjoys analyzing the numbers.
“Sales volume is up in Placer County while prices are down about 25 percent since last year,” Hake said.
Sellers wouldn’t bring their prices down last year to a level that buyers were willing to pay.
Hake thinks that as soon as last year’s wave of foreclosures swept the area, the shear volume brought prices down and forced the sellers that were not distressed to compete and bring the prices in line with the competition.
Hake reported that of the 2,544 residential properties currently on the market in Placer County, approximately 28 percent are short sales and 10 percent are bank owned. An astounding 38 percent of the current inventory is distressed.
There are currently 801 pending sales. Twenty-one percent are short sales and 37 percent are bank owned. Fifty-eight percent of the pending sales are distressed.
In March through May of 2008 there were 1,116 closed sales. Seven percent were short sales and 44 percent were foreclosures. Fifty-one percent of the closed sales were distressed.
Hake continued to explain that the magic number for an even market is six months of inventory.
In other words, if no new inventory was added, and the current rate of sales continued, the inventory would be depleted in six months.
Hake continued, saying that we have 6.25 months of inventory in Placer County compared to more than 10 months of inventory in Auburn.
Auburn doesn’t have nearly the troubled inventory that south Placer County has. Auburn didn’t create a lot of new inventory. Consequently the troubled properties are due to refinances not purchases.
Kelly Richardson of Hometown Realtors sees flurries of activity in the market right now, particularly in short sales and foreclosures.
The areas of activity are primarily in Lincoln and below. In our immediate area we now have a lot of activity in the under $400,000 market range. One can now find homes in the Auburn area under $300,000, which was unheard of two years ago.
“Buyers are crazy if they aren’t armed with pre-approval letters and out there buying,” Richardson said. “The buyers in today’s market are a combination of investors, move-up and first-time buyers.
“Sellers that are priced right are receiving multiple offers. The banks are the ones receiving most of the multiple offers because they are pricing to sell. Sellers that aren’t priced right are missing out.”
Pricing your home right is a matter of good Home $$$s and Sense.
Sue Thompson is owner and sales manager of HomeTown Realtors. She can be reached at seesue@seehometown.com, or on the Web at www.homedollarsandsense.com.