Gordon Corsie

There is a swing albeit a small one toward a more stable market, it looks like buyers who have been waiting have seen an opportunity to buy now and move in to their new home before Christmas.

For full story; LIVERMORE SALES UP!

The number one issue I come across today is an objection provided by a potential home seller, and it goes something like this;

“We would like to sell, but since we can only sell for less than what the peak of the market was a couple of years ago, we will just wait and see what happens”.

Well, Mr and Mrs seller, you are absolutely correct, you can only sell for what the property is worth today, not what it was worth in the past, but, and here is my point, it does not matter!

Here is why...

for full story... www.scotsmansview.com

We recently sold a house in Livermore on Arlene Way and as is normal the buyers had a structural pest control inspection which resulted in a $4000 bill for dry rot to the exterior wood siding.

After the seller calmed down he asked me what we could do about this. We looked at our options for cutting the cost. Did you know that you do not have to use the same company to do the work, well you don't but we were in escrow and only had 2 weeks before closing so here is what we did.

I had the termite inspector come back out to the house at no charge and show the seller and myself exactly what was needed. The seller being a handy guy and working nearby at LLnL
decided he could do the removal of the dry rot himself and so he did, it took him a day and a half.
We then had the termite co come back out and reinspect, give us a clearance then they replaced the damaged boards and painted. Result was a final bill for $2200 a $1800 savings for the seller for a day and a half of labor!

If you as the seller get the pest inspection up front BEFORE you place your property for sale
then

a/ you get to choose the inspector
b/ you get to bid out the work usually at a substantial savings!

I suppose that in order to answer this we must first look at what has happened and why, and if we do so then an answer begins to appear.

Why has the market slowed and why have prices fallen?

To begin with prices have fallen bacause there are now more buyers than there are homes for sale. As of today we have 292 homes available in Pleasanton and 539 in Livermore this is up @ 15% or so from this time last year.

Sales are at @ 30 a month or so this too is down @25% from this time last year.

BECAUSE;

1/ Lenders loaned too much money to too many buyers who should never have been qualified to such a high level of purchase price.

2/ Those buyers who bought with zero down loans and whose "OPTION ARMS" (Negative amortising loans) are adjusting upwards can not make the payments, and cannot refinance either and so are headed toward foreclosure.

3/ Because of #1 and #2 several major lenders are now out of business.

4/ The Media has loved to cover this, they love a good negative story.

5/ Buyers therefore are hesitant, why buy now when prices may keep falling!

This slowdown is different than the ones we have experienced over the last 10 years eg

1997 Russian economy slowdown...remember that one? Lasted @3-4 months

2001 9/11..

These were slowdowns related to the stock market which affected buyers confidence but really did not have anything to do with California Real Estate, but this one does!

In October of 1989 the Savings and Loan scandal hit and hit hard. We had close to 600 homes for sale alone in Pleasanton which was a much smaller town then. It took 5 years for prices to come back up to the peak levels they had reached in 1989.

THIS DIP IS NOT AS SEVERE AS 1989. We have more sales. We have fewer listings available.

There are still more peole moving to California than are moving out

Statistically we can track the slowdown beginning in late spring of 2005 and if we project a 5 year term then we should creep out no later than 2009.

If I am a buyer, should I wait?

You can, but by doing so you miss out on owning a home with the potential to build equity. Even buyers who purchased at the peak in 1989 did very well in the long run. Get on the equity train, its time to buy, investors are!

If I am a seller should I wait?

What for? Assuming you sell at a lower price today, and you buy today, then all you are really doing is transferring your equity, you are not disadvantaged in any way.

www.thescotsman.com