Realtor - Neal Weichel

8
UNDERSTANDING HOW TO BUY
IN TODAY’S MARKET
In 2006 what I heard from buyers, probably hundreds of times,
was the word “wait.” As inventory climbed and prices softened,
(our valley went from 1000 homes for sale to over 2600 homes
between January and August) buyers realized that waiting might
mean better prices down the road. Some buyers
even told me they predicted a large value
adjustment. They figured prices that had
already dropped 10% in many neighborhoods
had another 20-30% to go until things
stabilized, so they were in no hurry. The media
exacerbated the situation with talk of
“corrections,” “bubbles” and “crashes.”
I knew it couldn’t be that bad, after all there
is still technically a housing shortage in
Southern California. And unlike the 1990’s
there is no shortage of buyers out there, and
most people have equity in their homes. On top
of that people have strong job confidence;
thousands of people are moving to California
every month instead of away like in the ’90s.
And by October, inventory started to go
down. Sellers stayed firm on their prices, the
media backed off, and by January the number
of homes for sale in the Santa Clarita Valley
dropped to 1700 – a very balanced number for a valley of over
200,000 people. Buyers that were waiting re-gained confidence and
sales picked up. The “experts” proclaimed the worst was over – and
it likely is.
Today I am occasionally seeing multiple offers on listings, homes
selling for prices higher than last summer, and other encouraging
signs. Still – and this is the point for buyers in Santa Clarita – there
are parts of our valley that are stronger than others. Knowing what
is strong and what is not is the key to buying in today’s market.
• Areas where there is little inventory homes get top dollar; areas
that are flooded with homes (especially Canyon Country) may
still decline.
• There are types of homes (single stories, view homes, custom homes,
large lots) that are always desirable; and other
types (condos) that are more out of favor right now.
• Knowing when to be more aggressive on price
and when that strategy might lose you your
dream home has never been more important.
• Only the best, most experienced and
successful agents know what is likely to
sell quickly and what won’t.
To complicate things, what is hot and
what is not changes; some areas of our valley
that you would think would be hot – newer
areas like Creekside Valencia, Plum Canyon in
Saugus and Fair Oaks Ranch in Canyon
Country – have higher notice of default values
than others. This may lead to weaker prices in
the future. Then again, it may not if inventory
stays low and these homes are absorbed quickly
into the market.
The point is, knowing how to buy in
today's market is something that requires
daily tracking of new listings, price reductions, and finding out what
is motivating sellers to sell. Beyond that, knowledge of where the
path of progress is in our valley, the changing role of loan products,
how foreclosures affect an area and a dozen other issues, is something
only a good local agent can provide you with. The internet, out
of area agents, national media or “experts” that make broad-based
claims can only help so much. When it comes down to buying or
selling your home, real estate is too specific – and important – for
anything but a top-notch, real estate professional.
Knowledge of where the
path of progress is in our
valley, the changing role
of loan products, how
foreclosures affect an area
and a dozen other issues,
is something only a good
local agent can provide
you with.