The Following Article is from the Winter 2010 Newsletter
What will 2010 look like in the Westside real estate market? Many of the real estate professionals, with whom I speak have said they believe 2010 will be much like 2009. I don’t agree. Even though we seem to be in a similar paced market, the variables which affect the market have changed and in turn there are some significant differences.
In the beginning of last year we saw a halted market. Three primary factors contributed to this- the inaccessibility of mortgages (we all know this story), sellers’ failure to acknowledge the declining market and buyers’ fear to pull the trigger. These factors culminated in a market where the buyers and sellers were in a “stand-off,” and in the unlikely event that there was a consummated deal… the banks were there to crush it.
As the year progressed, money began to flow. Sellers who had to sell lowered their prices to attract buyers and the new price points brought buyers out of the woodwork who could now buy in neighborhoods that they never thought they could afford (as long as they were still gainfully employed). We experienced a nice little run in the third quarter where much of the good, well priced inventory sold. As Charles explains in his article, after the dust settled we found ourselves in a market with house values from 2003-2004.
The end of last year and heading into the New Year, we found ourselves once again in a slow market. But even though it may have seemed like early 2009, it was slow for different reasons. Money was and is more accessible than it was in the beginning of 2009 and there are plenty of anxious buyers searching for a home in the new low-priced market. Unfortunately, a new problem has ariseni.e., a lack of good inventory. There is nothing left to buy! We are hoping that the New Year will bring a splash of new listings.
What does all of this mean for a buyer or seller in 2010? We are no strangers to a low-inventory market. In the past it has brought us multiple offers and unbelievable appreciation. Today’s market is different in that it follows a recession and large decline in value. I think buyers are ready and able, and we will see multiple offers and fast sales on good listings. Sellers need to put their best foot forward and make sure they are perceived as one of the “good buys.” They need to be diligent in pricing their homes well and preparing them for sale. Buyers, in multiple offer situations, are going to be faced with difficult decisions in how much they are willing to pay to win the property. I think they will step up to a point but will be cautious not to over bid the market.
These indicators point to a slower moving market with relatively low volume and gradual appreciation. I’ll take that over a declining market any day.
Happy New Year!