Market
Shift: More Houses Get Multiple Offers
Julie Holt of Tarpon Springs, Fla.-based
Anclote
Title Services says 10 percent of the homes for sale are generating
more than
one bid.
Experts say markets hit hard by foreclosure are
seeing more
multiple offers, as residential price declines make homes more
affordable and
banks low-ball asking prices on distressed properties.
"If a house is in a good neighborhood, is maintained
and is a good value, it'll get multiple offers," says Holt.
Although many markets are far from fully shaking off
the
downturn, the pick-up in multiple offers is a reason for optimism.
"When you begin to see people willing to fight for a
property, that's a good sign," says Beth Peerce, treasurer of the
CALIFORNIA ASSOCIATION OF REALTORS®. "We are beginning to see the
beginning of the end of a disaster time."
Source: USA
Today, Julie Schmit (5/6/09)
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Bargains
Hard to Find In Attractive Areas
Potential buyers in areas that were hard hit by the
housing
downturn have read about bargains, but only find it disappointing when
they go
shopping.
"Every open house I've been to has been a zoo,"
says first-time home buyer Sam Rivero, who has looked at 35 properties
during
the last three months. "If you follow what the media say, you'd think
sellers
are desperate to sell a house, but when you get there it's totally the
opposite."
When the real estate bubble burst, it didn’t affect
the
mid-priced market, said real estate information firm MDA DataQuick.
Instead, it
created opportunities in troubled neighborhoods and slowed sales in the
market
of homes priced above $1 million. But in areas where most of the homes
sell for
$400,000 to $800,000, there are few discounts to be found.
Even the foreclosure market has slowed, says University of Southern California Professor of
Real
Estate Tracey Seslen. Seslen said lenders with foreclosures are
supporting
market stabilization and releasing only a few homes at a time to avoid
flooding
the markets.
"The biggest problem," says Phyllis Harb, an
associate with RE/Max Tri City in La Canada,
Calif.,
"is that people are overreacting to housing statistics, thinking they
can
come in and make an offer 20 percent below price."
Source: Los Angeles
Times, Chip Jacobs
What
Opportunity Looks Like
Can you spot the challenge with this
OPPORTUNITY?
Yes, there is a
real challenge when trying to invest or purchase real estate during the
"Prime Opportunity" curve. The challenge is that it is NOT
prime. The reason.... During the period between "Media
Attention" and "Greed" it is a Sellers Market. There is a Buyers
frenzy to catch the market on the way up and Sellers are demanding and
getting premium prices for their properties. This curve holds
true in virtually any market weather the Stock Market or the Real
Estate market.
Now lets look at the period of time between
"Delusion" and Denial". Here is where the shift from a
Sellers Market to a Buyers market takes place. Because the market
has not been able to sustain the inflationary bubble, inflated
prices adjust . A
correction back to levels of support
has been
occurring. But, where is Support....? Support is always
found where VALUE is. In Real Estate, a good indicator of
VALUE
is historical appreciation of Equity. Sometimes referred to
as "True Equity".
So, what we see
during
the "Prime Opportunity" portion of the curve is
Sellers have realized that the market is now turning in their favor and
the tendency is now to hold
out to get
that premium price. This
makes
negotiation very difficult if not impossible. The best time
to buy is not at "Prime Opportunity" but somewhere before.
Ideally, between "Fear"
and Despair".
Today, depending on which housing market (waterfront, condos,
Golf etc.) and what geographical area you are shopping, you may
be closer to "Fear" then to "Prime Opportunity". Just keep
in mind that another Paradigm shift is now occurring.
"Ownership and Rental Costs and the
Prospect for Building Equity"
From the
Center for Economic and Policy Research May 2008
In May, the Center for Economic and Policy Research
reported that a person buying a home in the Tampa Bay area today with a
6% mortgage would create EQUITY in the amount of $41, 847 in 4
years. This equity includes projected cost to sell the home but
does not include the TAX advantages of ownership.
The average cost to rent the same home was $1,150 per month or
$55,200 over the same 4 year period with NO EQUITY accumulated.
Today's Opportunities
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