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Real Estate - Market Time Report for 9/22

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  • Real Estate - Market Time Report for 9/22

    Hey folks, sorry I didn't get this up sooner, I was just so busy all weekend! Here's the latest Market Time Report:


    September 21, 2006

    With Fall officially starting on Saturday, we begin the season with twice the active inventory and three times the market time compared to last year. The Orange County active listing inventory did not change much over the last two weeks, dropping by only 95 homes to 15,672 today. Neither did the number of homes placed into escrow within the prior 30 days; it dropped by only 8 homes, to 2,208

    13,464 sellers will not successfully sell their homes over the next month

    What can we expect for the rest of the year? Even though Fall does not officially begin until Saturday, the Fall real estate market in Orange County began about a month ago. Demand, the number of homes placed into escrow, has dropped a bit from mid-August (the height of the Summer market). We can probably expect sellers to continue to enter the market (even if it just is not the best time) as demand drops slightly. More and more sellers will have had enough and finally pull their homes off the market. This includes the large number of sellers who stubbornly refused to drop their price to a realistic level. We can expect another record number of homes pulled off the market in October, followed by a record November and a record December. Everybody is aware that the market is currently slow. Everybody is also acutely aware that the holidays are not a time to sell your home unless absolutely necessary. The chance of success during the Holiday market is at the lowest level of the year. The Holiday market begins right after the neighborhood kids dress up as their favorite character and travel door to door in anticipation of yet one more piece of candy. This market is marked by another slight drop in demand and a drop in the active inventory. Demand will not pick up until the middle of January as we ramp up for the Spring market. It will be critical to watch the attached home market over the next few weeks to see if the slowing trend and disparity in the detached market continues.

    How should a seller approach the market?carefully select the most qualified, experienced agent who will best represent their needs and utilize a sound strategy to tackle this challenging market. Look for an agent that has a tremendous grasp of the local market and exceptional communication skills. Do NOT hire an agent based upon a suggested price. The right professional will enable a seller to best ascertain the market value and proper price in approaching the market. To isolate the asking price, sellers should pay close attention to homes already in escrow and very recent comparable sales, the prior 90 days. Since there are so many active homes, look to actives only to establish where the home will rank compared to the competition and if there are any sellers below the most recent comparable sale or escrow. If there is too much competition, or a market time greater than 8 months, a seller should consider pricing their home below the last comparable sale or escrow. With declining values, a seller risks chasing the market down in price. For example, a seller that should be listed at $750,000 may initially list their home at $800,000. After reducing the home to $750,000 45 days after listing, the home is now worth $720,000, so the home continues to stagnate on the market. If the seller would have listed the home accurately to begin with, even if it was a little less than the last comparable sale or escrow, they would have achieved their objective of selling their home, and for a higher price.

    How should a Buyer approach the market?best
    time to buy a home. During this time of year, the Fall and Holiday market, there are more sellers who are motivated for all the right reasons and there are lot more concessions given with the purchase of a home. Demand will pick up again in the Spring of 2007 and will probably be a mirror image of the Spring of this year. Sellers are extremely realistic today compared to just a few months ago. Sellers are much more realistic today than they were just a few months ago and many really do have to sell. No, sellers are not going to just give their homes away. Most sellers are very in tune with what is going on in the market and have an excellent grasp on the market value. Be conscientious in determining the market value (offer price) by carefully scrutinizing the most recent sales, all escrow activity and other active homes on the market below recent sales activity.
    The following areas have inventories of less than six months: Anaheim, Buena Park, Canyon Areas, Cypress, Fountain Valley, Garden Grove, Lake Forest and Placentia.

    The following areas have inventories between eight and ten months: Foothill Ranch, Irvine, Laguna Woods, San Clemente, San Juan, Tustin, Yorba Linda and homes between $1 million to $1.5 million.

    The following areas have inventories greater than ten months: Corona Del Mar, Coto de Caza, Dana Point, Dove Canyon, Laguna Beach, Newport Beach, Newport Coast, Villa Park and all ranges above $1.5 million.

    Unusually and exceedingly peculiar and altogether quite impossible to describe...

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