Is the market beginning to rebound?

If your idea of a “rebound” means getting back to the sales levels and home values experienced just a few years ago, then the answer to the question is “no”. The fantastic escalation in home values during the peak of 2004/2005 was based on the easy accessability of sub-prime loans that lured many buyers into a false sense of easy home ownership. Demand was at record highs thus supply was low and home values surged. As we all know, unless you have been living under a rock, those days are gone.

The current situation is not as bleak as the daily headlines lead many to believe. It all depends on where you live and where you are looking to sell or buy. The closer you get to S.F. the less of an impact the foreclosure market is having. It always comes back to supply and demand. Last year with the economic implosion we saw a decrease in demand and thus an increase in supply which lead to a reduction in home values. Buyers stood frozen in fear listening to the media and experiencing their own personal job losses or fear of loosing their job. So the market did what it had to do and sellers began to lower their asking prices. Still buyers just waited to see how far the prices would fall. A few very brave buyers took advantage of that time and bought very good properties at much lower prices than they had seen in years.

Since February the market has begun to change. Is it a temporary trend? Only time will tell however based on what I and other realtors in S.F. and close proximity are experiencing is that we may have passed the "bottom". What happened since February? The stimulus package was announced giving home buyers up to $18,000 in tax credits for those that qualify. Interest rates have dropped to record lows and so have home prices. That combination of events has caused serious buyers who have been sitting on the fence to take action. Property is now moving and buyers are taking advantage of the buyers market. Properties in a good location, in good condition and well priced for the market are moving quickly and in some cases, seeing multiple offers.

What does this mean? It means if you are a serious buyer who has been pre-approved for a loan you should be taking advantage of this unique opportunity. As more buyers jump off the fence it will naturally become more competitive when making offers. Does this mean we will see the double digit growth we saw just a few years ago? Not in the near future as there is still unrest in the economy, people are still loosing jobs.

What I can be sure of is that the cycle will continue. Supply and demand will fluctuate, we will have future recessions and boom years. Is this the right time for you to sell or buy? Contact me and lets explore your specific market and what the best options may be at this time for you.