Where Would You Put Your “X”?
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Honor Team Monthly
Real Estate Market Briefing
July, 2009
Welcome to July & our sense of the market as full-time real estate professionals serving North County for a combined total of 34 years. We’ve created our own homemade Honor Team Predication Chart with an opportunity for you to participate with us.
OK, let’s get right to it.
We put our own “X” at the bottom of the second box. We think we’ve hit bottom, but we don’t think public perception will recognize this for several months. The North County median price has actually INCREASED for the past two months, although by only a slight amount. This is the first increase in a long time and reflects a major shift. The Doom & Gloom camp, however, says there is another wave of foreclosures as we head into Fall and that, perhaps, the magnetic poles may switch, causing a meltdown in Earth home prices. We think there will be fluctuation and fluttering, but that we are moving through the bottom and that prices will remain essentially flat.
Having said this, there are also pockets of communities that defy this logic. West Solana Beach prices are actually higher than last year. On the other hand, homes on the East side of I-5 in Solana Beach are considerably lower than last year. In fact, prices in the Lomas Santa Fe community, for example, have taken a slide this year, and there are very few sales so far (only 4 sales for the first half of the year). Even though several of these sold at lower-than-expected prices, you can’t make too much sense of only 4 sales.
Our Observations:
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Homes prices for ALL coastal North County actually increased by a little less than 1% from a month ago. This is the second month we’ve seen this new pattern. For a fabulous overview of North County prices, click here: North County Sales Stats
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Condo prices for ALL coastal North County remained the same.
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In North County as a whole, there were 1451 homes for sale or in escrow as we entered this month and 444 are in escrow. That’s 31%. That’s a EXTREMELY healthy number.
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There were 660 condos for sale in coastal North County as we entered this month and 274 of those in escrow – 42%. That’s a LOT of condos in escrow!
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The number of overall sales in 2009 in coastal North County is about 13% lower than 2008.
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Solana Beach has only had 25 home sales for the first half of 2009 compared to 68 total sales in 2008. Things are mighty slow in Solana Beach!
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During the first half of 2009, 37 condos in Solana Beach sold compared to 65 sold in 2008. That’s about the same pace as last year.
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Our sense is that most buyers are pushing into the market now at the price points below $850,000. And most homes in Solana Beach are above that price.
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Despite the recession, we are grateful and humbled to maintain our position as “Leaders” with 12 transactions so far this year (7 sold and 5 in escrow). We had 20 last year, our best year ever. Our average sales price, however, is a lot lower than last year.
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We are deeply in touch with both the listing side of the market and the buyer side since 58% of our business this year is listings and 42% is with buyers. This has helped us stay in fine tune with what’s really happening. To see our very appealing listings, click here: Our “Pitch Sheet“
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One of the most excruciating challenges has been to get successful appraisals for our pending sales. The appraisers, because of so many lower sales, sometimes come in lower than the sales price!
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What this means is that, even if a buyer steps up to the plate and offers a “good price,” the home will still not sell unless it appraises (unless it’s an all-cash buyer).
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It is fruitless for a seller to price too high for two reasons: One, they are highly unlikely to get an offer when priced too high. Two, even if they do get an offer in the price range they want, it is unlikely to appraise!
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However, we always get LOW offers for our listings. And we ALWAYS have to counter with a MUCH HIGHER number. We have found that the buyers who only want to buy low, then disappear. Buyers who are reasonable, then start an honest negotiating process that ends up at a just number for both parties. We stand with our sellers who are unwilling to sell at prices in the “Doom and Gloom” buyer camp.
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When we represent buyers, of course, we make low offers, but these usually don’t work if it’s a nice property or new on the market. In some cases, our buyers are actually competing with other offers. This is another hint to us that the market is shifting through the bottom.
Our Predictions:
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We feel we are moving through the bottom, though you can see that our “X” is straddling two positions.
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Prices for ALL North County will continue to stabilize, but are more likely to remain flat than to increase.
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We feel that the majority of sales activity will continue this year to be at the price point of $850,000 and below.
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HOWEVER, there will be an increasing number of sales at homes above this price during the second half of this year.
Why Buy Now
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Prices best in last 3 years
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Interest rates at lowest historical level
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Recovery kicking in
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Good buys available at lower prices
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Good inventory will disappear quickly when perception of “recovery” changes
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Our buyers are thrilled because we find the right properties & negotiate for the lowest possible price.
Why Sell Now
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Perception of “Recovery” is kicking in
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Buyers are coming out of hiding
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Low interest rates is encouraging buyers to act
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Inventory of good homes for sale is moderate
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Our listings sell at the highest possible price because of our fabulous presentation, marketing, & negotiating.
We look forward to serving you – as a seller or buyer – whenever that moment arrives in your life. In the meantime, thank you profusely for your referrals. Your friends will thank you forever for connecting us to them.
WHAT WE DO TO HELP OUR CLIENTS SUCCEED
It takes great patience to be a seller in today’s market & great patience for us as well, even though we have been labeled “marketing geniuses.” Almost 60% of our business comes from sellers so we have to be experts — and our exclusive “Top 10 Reasons to Buy Me! campaign has been extraordinarily successful. Our listings are selling, but we have lots of strategy sessions with our sellers to make this happen. Our sign“Someone Special Bought Me!” takes a lot of talent to get hoisted.
It takes great wisdom to be a buyer today too. Is the market going to drop further? Or is this the moment to buy? We help our buyers (40% of our business) to make wise choices and negotiate well. We give honest feedback on the pros and cons of each property based on our extensive market awareness, but we never push. This teamwork with our buyers brings powerful results. After showing 16 homes in one day to a couple relocating here from another state, they said, “We had the best time with you two today!” That’s the way it is for all our buyers.
OUR ADVICE TO SELLERS
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Price your property aggressively NOW! Look at the best honest sold comps (NOT your competition that is for sale), price slightly above those comps so you are in the “Strike Zone.” Youwill sell if you do this!
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Treasure the first offer. It’s very often the only offer. Don’t make the mistake of thinking, “Oh this was fairly easy, let’s wait for the next offer.” And wait you will!
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Don’t give up. Patience is absolutely called for in this market. Give yourself a good 6 months to sell – and longer if you over price to begin with. If you need to sell faster, drop your price now, not later.
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Let your home or condo “Pop & Sizzle” in buyer’s minds & hearts. Over 50% of our business comes from our listings and we truly shine in marketing. Our “Top 10 Reasons to Buy Me!” marketing campaign has been called “Genius” not only by our clients, but by our competitors!
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Click “Why Sellers Love The Honor Team!” to see the benefits of being a seller with us. And click here for quotes from ourSatisfied Sellers.
OUR ADVICE TO BUYERS:
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Buy now. If you are planning to stay put in your new property for the next 3-5 years and you see a property that speaks to your heart, buy now. We feel that the tide has turned and it’s important not to miss this opportunity to buy at the lowest possible prices.
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Play it Safe. If you are planning to stay put for less than 2 years, play it safe. There’s no harm in waiting to see if the market has indeed stabilized on prices. Remember, though, when a market turns (and we feel this one has), things happen quickly and those lower prices begin to fade. But even as the market recovers, prices will probably remain stable for at least another year.
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Work with the Honor Team. Almost 40% of our business is with buyers and we are amazing at helping buyers find the “perfect” property and negotiating the lowest possible sales price. And we don’t pressure. What you will experience with us is expertise, knowledge, wisdom, & caring beyond your highest expectations.
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Click “Why Buyers Love The Honor Team!” to see the benefits of being a buyer with us. And click here for quotes from ourSatisfied Buyers.
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