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October 2006 newsletter - OCBuyersMarket.com LET’S SUM UP THE MARKET IN 8 WORDS… “A CORRECTING MARKET, RETURNING TO NORMAL, REQUIRING WORK.” … If you think we are in a buyer’s market, you would be wrong. A buyer’s market is defined by economists as 12 months of unsold inventory. Right now we have between 6 and 7 months of unsold inventory, taking us little more than half-way to that hot buyer’s market. That being said, there is no question that there is more selection for buyers right now and that they are taking their time. What we have right now is an artificial slowdown, much different than the press would have you believe. Don’t misunderstand, the market has definitely slowed. But what we really have right now is a market that is good for the seller and good for the buyer. The sellers may not think the market is good for them. That in fact, is what is temporarily keeping us off the beam of a normal market. We have a stalemate. The sellers are in denial that they “missed” the crest of the market and the buyers are a little greedy with lowball offers that sellers will not seriously consider. Other buyers are waiting for prices to tumble. They will have a long wait. All economists agree that prices are softening, but certainly not at a rate that buyers can lowball way off the list price. Because of this, we have a stalemate between seller and buyer. But predictions are for this to change. There are several reasons for this change: 1) some buyers have waited as long as they can and must take action before the end of the year. 2) Sellers are in the same position. They want to move before the holidays or they want the tax write-offs for the 2006 calendar year. 3) Sellers who listed in the spring (with a six month listing) and are not serious will expire and not re-list creating a tightening of inventory. All these scenarios will break up the holding pattern and create a more stable market. Interest rates remain the wild card. All indications are that they will hold steady through the end of 2006 and possibly through the first quarter of next year. This is a great market for a qualified Realtor, because you must be able to market and sell a property.
WHAT WERE THE ACTUAL NUMBERS… The total number of sales was 3,203. This number was up 15% from July indicating we are hardly in a freefall. That number was off 32% from August of ’05, but that was a banner year. There were 2,005 resale, 834 condos and 364 new homes. Condos were off the mark the most at 40% from a year ago. The median price for all properties was $633,000 and for single family it was $685,000. There were 392 properties sold under $400,000 and 373 sold between $400,000 and $500,000. Moving up in price to $500,000 to $600,000 there were 566 sales. The two highest categories saw the most action with 624 sales between $600,000 and $700,000 and finally there were 1,220 sales over $700,000.
LET’S REMEMBER THAT PRICES ROSE FOR A STRAIGHT DECADE… Most newspapers have been happy to report that sales are slumping. But do they properly remember the boom which all homeowners enjoyed? The current price correction should not deter seller or buyer from making a decision. When was the last time the stock market went up every single day for 10 years. I resent the newspapers gloom and doom. Headlines may sell newspapers, but that doesn’t mean they are accurate. You may want to check out a new book on the market; “Bubbles, Booms, and Busts” by Blanche Evans. Reviewed in the New York Times the book “pooh-poohs” the idea of a bust. Rather, “she sees the current slump as more of a breather, as well as a chance for buyers and sellers to ‘reposition’ themselves to take advantage of the long-term upward trend in housing prices.”
TROUBLE SPOTS, TOURISM, AND TIDBITS… There were 498 notices of default filed in August, but only 59 actual foreclosures. There appears, as of right now, to be no convincing upward swing in those numbers reflecting a still healthy market. The Kiplinger Report had tourism poised to be a shining star for the coming months ahead. In Tidbits, Kiplinger cited still a tight job market with rising pay not even enough to get all the skilled workers needs. Also, 3 of the top companies cited for strong growth are in Orange County, another sign that we are in a good position for sustained growth and housing long-term stability.
IN CONCLUSION, YOU MUST MARKET A PROPERTY TO SELL… And you must know what you’re doing. This market is not a time for guesswork. It is a time for professionals and I am one of those professionals. A home must enter the market properly priced and marketed or you will pay the price. This is a competitive market but it is a market that is “doable.” Please give me a call for your private consultation. And of course I always appreciate your referrals. See you next month!
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