Real Estate Trends By Norma Flaskerud
Aug 26, 2016 04:52PM
● By Elena Hutslar
Real Estate Trends
Is it High Tide or Low Tide?
By Norma Flaskerud
Like the ocean, real estate trends ebb and flow. This analogy might be applied to current home sale prices, and the million-dollar question: Is it high tide or low tide, and is it coming in or going out?
We have seen some house bids go up to the stratosphere this year, breaking through to prices never seen before in our area. While this is fabulous for the seller, it raises the benchmark for the next home and erodes affordability for buyers. So, the neighbor decides to list and thinks if that house sold for THAT much, mine must be worth THIS much! It trends towards over-pricing and puts the brakes on the house selling. All across the county and Bay Area, Realtors are counseling sellers not to fall into that trap. Do they listen? Some, yes, others, not so much.
While composing this article, we sourced an article with the same theme in East Bay Times on 8/19/16 (“Home Sales Still Slipping While Prices Are Sky High”). While you probably are not planning to sell your home today or even in the near future, you may know someone who is. Spread the word!
Year after year, home sales fell for the 6th straight month in the Bay Area. Contra Costa CoreLogic shows July sales were down 16.9% (# of units sold, not prices). CoreLogics’ Andrew Le Page attributed it to waning affordability, tight housing inventory, and moderately strict credit regulations. These same forces pushed the median home price for the region upward in July, 5% higher than a year ago, to $735,000, and by 8 percent to $540,000 in Contra Costa County.
The trend is a softening market, which is a bit of a transition. Sellers’ agents need to advise clients that a house may be on the market longer, may not get multiple offers, or needs to be priced conservatively. If we go aggressively high, it will just sit there. Meanwhile, buyers feel the softening shift. They want to get a discount, but sellers still feel they should get their 10% over asking price, and it can create gridlock. Most often the seller will find that one motivated, qualified buyer who is willing to pay the premium to finally buy and own a house. But the intensity of the spring market is in our rear-view mirror.
Often we are asked if this is another bubble. With lending requirements as stringent as they are, this is not 2008 all over again! Plus, we have strong regional job growth and employment, creating a strong buying base. In closing, sellers must set realistic prices to sell. And it is ok if rapid price escalation slows. Too many buyers have been priced out! Every Realtor has one or more trying to buy, and it is so sad to see them unable to. A more level market is a healthier market for all concerned.
Speaking of affordability, we have two new listings coming up in Pleasant Hill that offer fix-up equity creation with upside potential. Both are on Maureen Lane. The cosmetic fixer is a Creekside rancher on 598 Maureen Lane for $660,000, 3 bedrooms, 2 baths. The other is a Brookside rancher at 522 Maureen Lane, 3/2, a bit smaller, in dated but well-cared-for condition, and coming soon in September. Watch for them! Both feed into Strandwood Elementary and have walkability to town, canal trail and schools.
For your real estate needs, call the Flaskerud Team, representing home sellers and buyers since 1987. We can be reached at 925-338-2980 or e-mail: [email protected].