Sunday, December 28th, 2008 at 5:14 PM
Prospects for 2009
BAM wondered about me feeling ‘less negative’ lately, and it’s true, I am optimistic about how 2009 is shaping up.
We noted the run of sales the few days before Christmas, and today Gary was having open house at an 1,200sf attached home within 100 ft. of the 76 freeway in Oceanside – and had eight couples attend, on what I’d consider to be the weekend of Christmas with a big Charger game later. Interest rates are low, mortgage quailfying isn’t as hard as you might think, overall inventory isn’t as high as I expected, and next year should produce substantially more REOs to sell. But number one is that prices are lower than they were last year, which is good for sales!
People want to buy real estate, and those who know the least are willing to pay the most – or at least more than you. An astute buyer is a frustrated buyer; literally the more you know, the tougher it is to snag a good deal because the more-eager keep paying 5% more!
Part of our frustration as an agent was that we could make a living just working the MLS. We’d pick off all the good buys the minute they’d hit the MLS and beat everyone else to them, convincing the seller and listing agent to hurry up and sign our offer.
But now that most deals are bank-involved, either short sales or REOs, you can’t get a quick seller signature. The banks are ‘processing’ incoming offers for 3-90 days, keeping the door open for additional buyers to pay more than you. When you’re committed to not over-paying, it can be very frustrating. I have buyers that have been looking for 6-12 months that aren’t much closer to buying a house today than they were a year ago. There are no regrets – the market keeps coming our way. But so do more buyers.
If you’re chasing bank-related listings on the MLS in 2009, then you’re probably going to be paying retail, or close to it – especially if you want a superior property, or you’re on the lower end of the price curve, where there’s plenty of cheap financing. There are just too many people chasing them.
Here are some examples of hot markets, where it is tough to get a great deal:
1. Anything decent in Carlsbad under $500,000 or 3,000sf under $800,000.
2. Encinitas/Olivenhain quality 3,000sf under $900,000.
3. Del Mar west of freeway quality 2,000sf under $1,000,000.
4. Carmel Valley 3,200sf around $1,000,000.
5. Coastal lots/land
6. Oceanside any decent SFRs under $200,000.
7. Vista Shadowridge 2,000sf SFRs under $400,000.
My goal in 2009 is to bring more unique product to my buyers. Ocrenter mentioned the Arroyo Hondo sale - that house wasn’t on the open market, and neither was another I closed in Carmel Valley last quarter. Being able to dig out these additional opportunities will hopefully give my buyers an edge in getting a decent deal with less hassle.
Wait as long as you want, but for those who think 2009 might be the year – I’m here for you!
Another 2009 goal is to do fewer of these:
Posted on Sunday, December 28th, 2008 at 5:14 PM in Jim TV, Thinking of Buying?, Tips, Advice & Links | 15 Comments » | 
Print
You can follow any responses to this entry through the RSS 2.0 feed.
You can leave a response, or trackback from your own site.
Yuck!
If it were a SFH, at least you might be able to scrape it, but not if you’re attached.
Maybe worth $10K (seriously)?
CA renter | December 28th, 2008 at 6:09 pmPeople want to buy real estate, and those who know the least are willing to pay the most – or at least more than you. An astute buyer is a frustrated buyer; literally the more you know, the tougher it is to snag a good deal because the more-eager keep paying 5% more!
———————–
You’re absolutely right about that!
CA renter | December 28th, 2008 at 6:10 pmI think that the banks are going to continue tightening their lending practices. Possibly even reverting back to the 20% down requirement. If they do then only a small portion of the population will be able to afford any of the “great deals” listed above with the exception of #6 (Oceanside). However, maybe wealthy retirees or younger professionals will start (continue) moving to San Diego. I plan on moving back soon.
D Max | December 28th, 2008 at 6:44 pmCA Renter beat me to it, but that is a classic JtR quote. So, now what? Just bite the bullet and overpay? Stuff a few crayons up our noses to dumb it down a bit, ala Homer Simpson?
Smithers | December 28th, 2008 at 7:10 pmI know the game is not over, but at 31-13, I’m going to say it: Go Chargers!
Smithers | December 28th, 2008 at 7:18 pmMake that 38-13. It’s all over.
Smithers | December 28th, 2008 at 7:22 pmThe housing market has been so weird for so long, lots of people are simply getting tired of waiting and just going ahead with getting a place. Sort of a dead-cat bounce. It’s tiresome to live in a rental year after year when you were ready to move out a couple years ago.
Dwip | December 28th, 2008 at 7:28 pm“… those who know the least are willing to pay the most – or at least more than you. ”
Good point, and very true. But so far this has not kept prices from falling. The market correction is moving along just the same, people buying all along the way. It’s not me, yet, and that is frustrating. But on the other hand, we’re still moving in the right direction.
Something else: there’s a certain psychological thing that comes to play as well. Once you see that SFH in San Elijo dip below $500K, or the nice place in Shadowridge go below $400K, you sort of expect the next listing to do the same. Once you get over the shock of “Oh my Gosh, I can actually have a house for $350K?!” it turns into: “Well sure, why not, that seems about right…” I just don’t see it going back up over those markers, even with higher spring activity. Not in the current climate of economic bad news.
Simone | December 28th, 2008 at 10:39 pmSo, now what? Just bite the bullet and overpay?
Here’s my advice on that:
Be open about the price you’re willing to pay. You have a 17-day inspection period to prove it to yourself that it’s worth it, so if you have to pay a little more to secure the deal on a house you really like, then do it.
It’s an inexact science – there is a 5% to 10% spread on the value of any property at any time, due to the many contributing factors. Don’t lose a house that you think is a great fit for you, over 1-3 percent.
Jim the Realtor | December 29th, 2008 at 6:44 amIt’s almost like houses that list at more reasonable prices are selling…
I still believe that there’s going to be more price drops than sellers are hoping for. Banks haven’t been forced to show their hand and unemployment is rising. That being said. While I have seen more houses sold recently it’s ONLY the best properties that are listed at reasonable prices that are getting bought up. The overpriced turkeys are just sitting there for their 100′s of days plus.
shadash | December 29th, 2008 at 6:55 amI couldn’t agree more, and all the OPTs are the big head-fake that makes the astute buyers want to think there is plenty more downside. You look at an OPT and think – there’s no way I’d pay that for that!
There has to be 80% or more of the active inventory that is over-priced, and with the internet tools available to buyers it is easy to determine who’s dreaming.
It’s actually a big benefit to the astute sellers that there are so many other sellers in denial. It means all you have to do to sell, is to drop your price under their ridiculous list prices, and boom – you look like a deal, relatively.
It’s when you’re the best-priced listing in the area and aren’t selling, that it’s time to get nervous.
Jim the Realtor | December 29th, 2008 at 9:07 amWe were watching a 3/2 house, newly renovated in South Park. We figured ~$350-400 sq ft would be reasonable for the neighborhood, and since the asking price was >900K (>$700 sq ft), it would take a while for them to get down.
Someone just bought it for $850K/$623 sq ft.
Ok, unless someone is bailing out of Mission Hills or RSF, we’ll see this property on the market in 2011.
Jon Gallagher | December 29th, 2008 at 10:58 amIt gets tiresome but I’ll repeat. “These” make sense at these price points for investors with reasonable access to rehab teams. The “assumption” is the unknown/unknowable factor. Can rent prices hold? They didn’t bubble true but does that mean they cannot decline?
Regardless, here’s to Jim having to do fewer of “these” in favor of him doing more homes for real people looking for real places to live in the new year.
Rob Dawg | December 29th, 2008 at 11:56 amMost of you guys probably already read Mr. Mortgage but incase you don’t, follow this link: http://mrmortgage.ml-implode.com/
He is an invaluable resource. His predictions are for more inventory to come on the market and more price drops. Patience all you grasshoppers…it will be rewarded.
dukes | December 29th, 2008 at 5:58 pmJim,
That place doesn’t need a buyer, it needs a bulldozer. Good Lord. What a dump.
Let’s hope for less of “these” in 2009.
Can’t wait to get back to a normal market, whenever that is….
KC | December 29th, 2008 at 6:29 pm