Is the Window of Opportunity for House Prices Half Open or Half Closed?

Last weekend seemed like a trip down memory lane with respect to open house activity.  I showed one couple 6 properties in the mid-$200,000 range in Concord.  At every stop, there was a least one other agent showing a prospective buyer the same house.  After the showing, there would be a “client-agent” huddle filled with whispering, gesturing and furrowed brows.  Wow, are we in 2005 again and nobody bothered to tell us?  Is the rush about to start with multiple offers, ingratiating buyer letters to sellers, and agents going crazy trying to get their client’s offer accepted?  Is the big opportunity to get in on the ground floor/crawl space here?

 

While I am always optimistic about the long term benefits of owning real estate, I am concerned that 2012 might not be the year we start the new ascent in values.  The recent deal between the federal government and the major banks will have a significant impact on the housing supply.  I suspect it will end, for now, the inventory-starved conditions in the current market.  Banks do not like uncertainty.  They have been sitting on a huge inventory of REO properties for an extended period of time waiting to see what the government would do.  Now they know what the plan is.  If it is to their financial advantage to start liquidating that inventory, they will do so.  My guess is that by the end of  the first second of 2012, there will be a significant increase in inventory in the local market.  The price of housing is regulated by the laws of supply and demand.  Increased supply will mean lower prices.  Lower prices will cause buyers to go to the sidelines and wait for the real bottom to hit.  As buyers drop out, demand will decrease.  This will lower prices even further.

 

Here is what I am advising buyers right now.  If you are looking for a home to live in and find just the right one, go for it!  Interest rates are unbelievably low so you can really use your downpayment and mortgage to leverage a home. It will be more than investment. It will be a place that you can enjoy for an extended period of time and have equity when you are ready to sell.  If you are an investor, drive a hard bargain.  Seek sellers who really must sell right now and negotiate the lowest price possible.  If the seller says “no”, simply wait until conditions improve.

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About c21terry

-25+ years of local real estate knowledge. Terry has been closely involved in the Concord market since 1987. He knows neighborhoods. He knows streets. He even knows many individual houses having represented more than 500 local sellers. This knowledge gives you a powerful tool when looking for the right home at the right price.-25+ years of experience. Negotiating offers, solving sticky escrow problems, working with other local agents, understanding the meaning of contracts/contingencies etc., dealing with problems after the close of escrow-Terry has pretty much seen it all and can draw upon past experiences to solve your real estate problems.-Responsive and available. Just look at Terry's recommendations. He understands that a real estate transaction can be a stressful situation for his client. He is available to answer your questions and concerns quickly. He recognizes those times when immediate action is necessary to protect you. You can count on him.-Associated with the biggest CENTURY 21 company in the world. CENTURY 21 M & M and Associates was the #1 CENTURY 21 company in the world in 2011. Consider the advantages to you of having such a powerful company representing your real estate interests-Free stuff!! Yes, you get all of the above and some free stuff to boot! At the start of each month, Terry will send to you his personal newsletter, Concord Starter Market Update. It's filled with valuable real estate information that you will not find anywhere else. In addition, you get a free membership to Terry's web site which gives you information about local properties in the same time frame that real estate agents receive it! This gives you a huge advantage over other buyers who are using web sites which update information 24 to 48 hours after the fact. To receive these items, just send a request to Terry via email.


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2 thoughts on “Is the Window of Opportunity for House Prices Half Open or Half Closed?

  1. Tom Stone

    443 piper St in healdsburg was open last sunday. 34 groups came through and several spent more than half an hour. No offers yet, so the price is close, but not right. Low inventory or no, buyers want quality and price.

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