Guest writer: Jim Roberts of Coldwell Banker San Jose
You want to buy or sell but maybe you are not sure if the time is right.
If you base your real estate buying or selling decision on what you read in the newspapers, no doubt you would be thoroughly confused. Today’s headline reads, “Home sales hit 6-year low for May“. Does that mean the prices are dropping? Are they talking about Santa Clara County? Or the state? Or are they comparing us to the rest of the nation? It’s not clear. Glancing at the headline, most people would assume that prices are dropping – but that would be a wrong assumption. Sales are down = the number of transactions are down. That’s not a very sexy headline though.
Although, if you read through the details in the article, you will also real that the median price rose in May from the month before, job growth is increasing and in many areas we are still seeing multiple offers. New home developments still are experiencing strong demand, with long waiting lists as evidence of that demand. Median and average price increased in Santa Clara County in 2006 and 2007 (so far). But these “newspaper selling” headlines cause buyers and sellers to experience confusion over what the media really meant by any of its reports that they aren’t sure what the right thing to do is. So, many buyers and sellers think that the safest thing to do is to wait on the sidelines.
The truth is that our market is unique and the areas and cities within our area are their own micro-markets. So when buyers and sellers are making their buying and selling decisions, they need to look specifically at the area and neighborhood in order to analyze sales statistics and comparable sales.
Looking into my crystal ball…..there are certain unique attributes to the SF Bay Area that should continue to make this a very attractive place to live: the weather, R & D opportunities, top knotch higher education, recreational opportunities, and a finite supply of homes. Also, I look at history to determine the future, steady appreciation of 8% average per year, as long as we have been keeping statistics. Holding real estate over the long haul has built many a nest egg in this area.
Are there bargains to be had? Sellers, when represented by an experienced real estate professional, will have reviewed a comprehensive comparative market analysis of their home. They know approximately what their home should sell, based on similar sales. Buyers also, when represented by a real estate professional, will have reviewed a detailed comparative market analysis for any home for which they want to write an offer. Their offer should be based on condition of the property as it relates to the similar sales.
That being said, buying when the seller has some element of distress and using a real estate professional skilled in negotiations, ensures that you will obtain the best price possible. The “red flags” of distress are: vacant properties, properties with a long time on market, properties that are corporate owned, needing court approval, listed as fixer-uppers, short sales, among others. An experienced Realtor can identify these properties for you and alert you the moment they come on the market.