I don't profess to know what is going to happen 5 minutes from now, let alone next week, next month or next year. But that doesn't stop me from having beliefs that only time will tell are right or wrong.
Tomorrow is the last day of July. I think a lot of sellers have been holding off dropping prices over the summer, hoping to find a buyer who is participating in the claimed summer buying binge. Now that we are about to enter the month of August, I think we will start to see a small amount of capitulation and many of those sellers (read: banks) will make significant price reductions to try to capture a buyer before the market goes into the autumn/winter doldrums.
What is your prediction?
Paul
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I agree. I have been speaking to realtors at open houses and they are mostly all expecting more homes. One in particular was notified that her company was getting 1200 new listings next month.
I think the banks are realizing there is no good news coming in the second half of 08 and it is time to sell before the last exists close.
There was no spring bounce this year. How often does that happen?
Real sellers (not banks) are mostly screwed. If you bought after 2003 you are likely under water. If you bought in 99 there is still some time to sell. Otherwise either walk, or tighten your belt and do what you have to to make it through this.
I agree and although I feel like there are mixed signals from the banks while setting the price.
Option A. Set a high price and hope you are selling a house that someone cannot live without. These usually sit and start to bleed reductions after a month. Rarely catching up to the market decline.
Option B. Price way below current REOs in the vicinity and hope for multiple offers. This option seems to have greater success and I have seen homes sell for much more the the current market would bare.
I have however, in the last few days, identified homes that have for some reason slipped through my criteria net (Geographically Folsom and EDH) that are within 20% of my market fundamentals. Close, very close...
Tough to say Paul. For any price range, overpriced listings have to reduce...sooner the better. Buyers are not stupid. It is just unbelievable that there are still sellers out there willing to test the market right now. As for the banks who have overpriced REO listings, they will eventually come around and reduce. They have to or they just won't sell...I suspect that soon most, if not all banks will eventually start pricing property artificially low to get as much attention as possible and sell quickly.
What will be really interesting is what happens to the lower end, first time buyer price ranges (under $300k-ish) from September to October of this year. With 3rd party non-profit down payment assistance going away, and FHA downpayment increasing to 3.5%, many buyers looking to owner-occupy in this range will be out of the market once again. With those changes, not sure if mere price reductions in the under $300k range will be the answer after 10/1/08. From my own personal transactions year-to-date, I have only done 2 transactions that involved Nehemiah...however if my numbers translate to the entire marketplace in Sacramento, then theoretically 13% (2/15) of transactions would have involved some form of downpayment assistance. I suspect the number is actually higher...that cuts a decent chunk of buyers out of that segment. That itself may create an autumn/winter doldrum - otherwise in that price range, the demand is there.
I don't think we're going to see any sort of consistency among the Banks, and with expectations already very low I am betting on a long, slow decline at this point.
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