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- Category: Market Updates Market Updates
- Published: 05 November 2006 05 November 2006
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Most people forget that during the fall & winter months, values have a tendancy to dip just a little. There is always a slow time in the market after school has started, holidays begin and the weather cools off. You have to realize that our local market was absolutely spoiled last year with invredible increases in prices (much need by the way) and with buyers having feeding frenzies with multiple offers on one house. 2006 has shown a leveling out of the market and a needed correction. Let's face it, things were getting out of control fast with land prices and home prices rising quickly.
This next article speaks of a national trend of the real estate market cooling. Keep in mind that our local Treasure Valley and Idaho Real Estate is not affected so much as the national trends and we somehow escape the peaks and valleys that much of the nation experiences.
What to Do When a Market Cools
By Kendra Todd November 3, 2006
Well, what was for some time touted as the "bursting of the real estate bubble" appears to have become a soft landing for the real estate market. In most markets around the country, prices are dropping but they're not plummeting. Homeowners with years' worth of equity will still hold onto much of that equity, and buyers are finding that they have a chance to buy a home again. In the business, we call this a "correction." It's normal and even desirable.However, a cooling market demands some different strategies for both buyers and sellers. Sellers have to avoid the pricing "hangover" from the boom market, when they could throw a For Sale sign in the yard, slap any outrageous price they liked on their house and get twenty offers in as many hours. And buyers must lose their desperation, understand that they are more in control, and realize that the current market is one of shopping for a deal, not throwing money in panic to avoid "losing the house."
Tips for Sellers in a Cooling Market
· If you MUST sell, focus your money and effort into creating curb appeal. Curb appeal alone can sell a house. You don't have to follow conventional wisdom that says you must dump tons of funds into redoing the kitchen or bath. The number-one feature of a home in terms of cost versus effect on salability is front yard landscaping. Lay down sod, plant flowers, paint, and put in a flagstone path.
· Be realistic with your goals for price and timeline to sell. Houses in much of the country are NOT selling at asking price and are staying on the market longer than in recent years. Many sellers have not yet come to grips with this new reality. They're asking high prices, then reducing their prices multiple times before pulling their homes from the market in disgust. Don't set yourself up to fail. Hire a good Realtor and listen to him or her about price. Set your price aggressively compared to your competition and come up with creative incentives to attract a buyer, such as sharing some closing costs or including some high-quality furnishings in the sale.
Tips for Buyers in a Cooling Market
· Now is the time to buy! So stick to your price and play hard to get. You have the luxury of waiting to capture the better deals and then negotiate your terms. If you drive around your area, you'll see that there is six to eight times the inventory on the market right now as there was a year ago, and homes are taking longer to sell. Take your time, make smart offers, and stick to your guns.
· Now's the time to jump back on board the wagon for pre-foreclosures, foreclosure properties and distressed home sales. When everyone thought home prices would rise forever (and it's amazing how short people's memories are, isn't it?), many buyers abused interest-only, adjustable-rate "creative financing." Now they're "underwater," owing more than their home is worth and unable to make rising payments. Take advantage.
· If you're an investor, target markets where speculation has run rampant over the past few years while also focusing on markets that are likely to boom in the next few years. You will be able to buy distressed properties at low prices and properties with tremendous appreciation potential at the same time. In general, the common sense rules apply whether you're buying or selling and whether the market is hot or cool: educate yourself about the market, have specific goals in mind, understand what your financial resources are, and don't make any deal for the short term. In the long term, real estate is always the best investment around.
Kendra Todd is the first and only woman to win Donald Trump's smash hit NBC show, "The Apprentice" on NBC. Additionally, she is Broker of Florida-based MyHouseRE.com, host of the popular HGTV Show "My House Is Worth What?" and a regular real estate contributor on Fox News Live. Her first book "Risk and Grow Rich: How to Make Millions in Real Estate" has been an instant success.
