Party Prattle or Wisdom?
December 21st, 2007 Categories: Davis RE Trends
“So, what IS going on with the real estate market???”
Not a party goes by that I don’t get asked this question. People are very concerned, interested, smirking, regretful, proud, trying to decide their next course of action…. A friend shared some points she took away from a talk by Carol Rodoni, Northern California real estate guru/respected economist (former CEO of the prestigious Alain Pinel Company, now executive advisor with The Clientor Group.) I would like to share these provocative and sensible considerations.
1. There is no national market, no California market, only the local market. Davis - a market nearly as flat as its landscape.
2. Flat markets that hold their value today are good markets. Flat markets translate to buying opportunities for you. Davis?…not completely flat, but nearly so - see previous post for the facts.
3. Markets in which there are multiple offers will continue to exist in buyer-driven communities. In Davis I translate this to mean that for highly desirable homes and properties, we will still see the occasional multiple offer.
4. Understand your market and play in that market. Seller’s should not be testing the market and buyers should use it to their advantage - not sit on the sidelines waiting for further movement. If you are making a long term investment, now is a good time to do so. 2008 may not be a good year for short speculation.
5. Homes listed at/near fair market value average 98.1% of their list price in Davis. Homes that are priced too high and reduced later, sell for 88% of the reduced price! Be smart and price your home at what the market will bear.
6. Don’t count on further cuts in the Feds short-term rates to greatly impact long term mortgage rates - these are two different animals. The rates are favorable now.
7. Historically a downturn in the market runs a 50 - 60 month cycle. 2008 will be the third year of this cycle overall.
8. International investors will strengthen the US real estate market in coming months and years. International cities like San Francisco and outlying communities will continue to attract strong buyers.
9. Expanded and improved reverse mortgages will become the new funding source for the children of baby boomers. New products are being created to mitigate estate taxes by reducing the size of the boomers estate. More than ever parents will become the lenders for their children and all parties will benefit from this equitable collateration.
Is this the year that you are going to welcome home ownership? If you think it might be, give me a call (530.574.0596) and let’s talk about your options in view of Ms. Rondoni’s comments. And enjoy your holiday conversations, with or without the martini!
