This morning I hosted the Broker Tour for the home featured on my previous posting. In this crazy market where there are only 55 residential properties for sale in a community of over 73,000 I was expecting a big turnout even though the property is over $1,000,000. And I was not disappointed. About 35 agents, 4 with clients, and 6 more showing this weekend.
What did surprise me was that the only ones who thought the price was out of line were some of the agents who say they specialize in the neighborhood. This is not an unusual event. I have been guilty of it myself. Some "Specialists" focus so much on their small territory that they don't look at the big picture and how it impacts that little area. As a result they can get out of touch.
And when we see a market shift like we have started to see … the impact is quick and usually universal. If prices are going up at 24% / year … 2% / month and a home gets priced 10% higher than the last comparable 4 months ago, that means it's listed within 2% of value right now … wait a month and it will likely sell … and if there are 10 people that want it now it will probably sell pretty quick.
The takeaway for everyone, whether agent, broker or client is simple: be aware of what is actually happening in the market place and figure out how to get ahead of it. You do that and if you are a buyer you will get your dream house. If you are a seller you'll get your price. And if you are an agent you will have some happy clients.
This great property will be coming on the market in the next week or so. It is indicative of the rapidly changing market place. With so few properties available and so many potential buyers hoping to purchase the prices are rising rapidly (averaging over 20% in the last 12 months). This same floor plan sold last fall for $975,000 even though it was on a through street.
The chief Economist for Trulia, Jed Kolko, wrote yesterday (November 14th) that the List Price of homes is continuing to rise in many parts of the country including virtually the entire Western Region … for the entire article just click on the map below.
It should be noted that many of the communities where properties are now appreciating are the same ones that were hardest hit by the housing downturn. The map below shows the rate of increase (or decrease) year over year for each state. Some of those states that still show decreasing prices are those that have both high foreclosure rates and a very long process for completing those foreclosures (sometimes over 2 years even when there is little resistance by the homeowner) whereas states like California are seeing significantly fewer properties being foreclosed on and a dramatic (49%) decrease in the number of new defaults being filed. Fingers crossed that the light at the end of the tunnel no longer appears to be a freight train :).