THE MARKET SHIFTING?
Are we experiencing a shift in the market place? Has the bubble
finally burst? Should I sell now while the market is still strong?
Should I wait to buy in case prices drop?
We are seeing a slight shift in the market place, it is not a
dramatic shift and it still remains to be a strong sellers
market. We are seeing a bit more inventory on the market however,
this is inventory that is very obviously overpriced and is simply
not selling. Sellers who are concerned that this may be the top
of the market without a lot of motivation to sell will put their
own subjective view of what the property is worth and are testing
to see if the property will actually sell at this price. Usually,
even the most desperate exchange buyer whose clock is ticking
to purchase an upleg within the allowed time period will most
likely take the hit and pay taxes instead of purchasing an upleg
which is grossly overpriced. Buyers appear to be a bit more cautious
about overpaying than they were a year ago, questioning if in
fact the market is shifting, perhaps its just wiser to wait
Interest rates continue to fluctuate with the continued speculation
and awareness that rates will eventually increase; however, there
is currently not a dramatic increase in interest rates. Prime
lending rates increased by a quarter point to 6.25% which will
most likely result in higher costs on home equity loans and other
debts. There have not been as many home sales however; there has
not been much inventory of single family homes in order to really
define an accurate pattern.
The overall economy in Southern California is still very vibrant
and strong with many of the jobs tied to the real estate industry.
Speculation continues that in an economic downturn we will experience
a surge of unemployment as a result of so many of the jobs dependent
on the real estate/construction industry. An economic downturn
will naturally affect sales of single family homes accompanied
by more realistic verses projected market rents in
the multi family sector which will effect how these properties
Lots of brand new faces have entered the market which is always
common in a strong market, the desire to make a fast
buck. New players are always welcome and can add a brand new vitality
and energy however, the success of professionals in the industry
is in direct correlation to those who survive and persevere in
a weak market not just when the fruit is ripe. Remember this is
still a service industry based on professionalism, strong ethics
and ultimately the knowledge of the industry. Do not underestimate
or discount the price on knowledge and experience when choosing
who you want to represent you and work with in all areas related
to a transaction. Lots of marketing tools are being geared toward
this is the end of the bubble, get out before the sky falls,
sell your building now, while simultaneously the same source
generating these marketing materials will push buyers into purchasing
now before prices become completely unaffordable. An honest
and ethical broker in the course of servicing the buyer and/ or
seller should inquire about the clients motivation; asking
questions about why the client is buying, selling and what are
the long terms goals and objectives. One of the best services
that a broker can offer is to sometimes guide a buyer and/or seller
not to buy or sell when it simply does not tie into the individuals
goals, objectives or current life situation.
Is the market shifting? Should you buy in this market? Should
you sell in this market? Should you wait and see? What are your
goals? What are your objectives? What is your current life situation?
And most importantly, how does all this tie into your life shift
and your life cycle?