It's amazing to read such a blatantly honest recap of current conditions. It's another to read it written by a local realtor, as this is
Enjoy...
Boatloads of economists poo poo the lack of savings with the notion that people have their “savings” their “wealth” invested up in home equity, stocks and other investments. The point is that such investments, particularly real estate, are merely feel-good paper appreciation, they are not realized profits.
Moreover, real estate, even with current rampant price reductions (see below) is becoming difficult to sell on a timely basis. Not so easy to liquidate. Worse is that values will be significantly down sized resulting from current, moreover oncoming, market forces; domestic and GeoPolitical.
Unsold inventory in the resale market jumped 26% above December '04, leaving a 5.1 months' supply, and anyway you cut it, that leads to a BuyerÂ’s, probably a Strong BuyerÂ’s market going forward.
If thatÂ’s not enough inventory for you to make a selection from, we have the highest new home inventory level in nine years. Condos? Can you find one for sale? Oh Yeah. No Problem. Condos are showing a 6.2 month supply. Out our way in Marin County, California, total sales from December 6, 2005 through February 4, 2006 (two months) were 308 homes and condos. An amazing 211 out of 308 sales (69%), had price reductions. No typo, sixty-nine percent, had price reductions.
February 13, 2006
Marin County Meltdown - Word from a Marin County realtor
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5 comments:
bake-
You are quite correct about how houses are listed above what the owner thinks will sell and then does a "price reduced" trick. But the fact of the matter is, as a long time Marin RE watcher, that in the last 4 years or so "price reduced" signs were as rare as a blue moon. It's just another indicator.
If I had to list something right now, for marketing sake I would list a house $60K over competitors. Then the next day reduce it to $20K below competitors. The place would look like a bargain. Both below comparibles and a glorious "$80K reduction."
It might even be bid up $15K because the buyers could be suckered into a "good value."
This will only work for so long until the public wises up.
I want to do a post where I list all the tricks, such as you describe with price reductions, played by sellers and realtors. If anyone wants to help me compile that list then please email me your thoughts.
M
marinite - good idea - see next post - thanks
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