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Competing Against A Glut Of Inventory In California

A report from the Sacramento Bee in California. “The Sacramento real estate market has officially softened. Buyers are choosy, seemingly picking well-kept and well-priced homes in desirable neighborhoods, and taking a pass on homes that come in over-priced or in need of fixing. Home sales have dropped 18 percent in the Sacramento region in September compared to the same month the year before – making this the lowest September sales since 2011, according to CoreLogic.”

“A six-bedroom Rocklin house went unsold even though buyers dropped their price last month to $538,000. It is now off the market. Barbara Lebrecht of the Galster Real Estate Group said the home was competing against a ‘glut of inventory in a small suburban area where new homes are being built … and buyers have a lot of choice.'”

“The Sacramento regional trend mirrors what is happening around California in the last four months. CoreLogic reports the number of homes sold in the San Francisco Bay Area in September was off 18 percent from the previous year. In Los Angeles, the decline was 19 percent.”

From Forbes. “Ask a home seller in the Los Angeles real estate market, and they might tell you housing prices have stalled or that their home hasn’t sold in ‘forever’ (after a six-week list life). They might tell you they have heard that demand for properties is low. Or, as they lower their price to try to spur some interest, they might even tell you prices are going way down. And you ask, are they right?”

“The answer is: Not for the reason you think. As a real estate broker who’s been plugged into the Southern California housing market for over 15 years, I have experienced firsthand that the normal culprits — the market bubble, skittish homebuyers and a lack of demand — are not the current cause of the pricing quandary.”

“Then, the question becomes, ‘What’s really happening to home prices and why is the general consumer impression one that tells them the sky is falling?'”

“Let’s get back to basics. The golden rule of real estate remains true: Solid properties priced correctly are selling and comparatively quickly. Simply put, many people aren’t being realistic when they price their homes.”

“If you’re selling your home in any high-volume market and you’re worried about stalling prices, don’t set yourself up to lose with fear — set yourself up to win and be smart. Strategic thinking will make the difference between your home selling for its best value or staying on the market longer than you had hoped as an overpriced property.”

“Nationally, 2018 has been dominated by talk of a U.S. housing market bubble. Certainly, with all of the speculation out there, no one can really be blamed for jumping to conclusions about housing prices. And in popular markets like Los Angeles where demand has typically been strong and prices have risen consistently over time, it’s easy to look at your home’s pricing decrease and point to a market bubble.”

“Obviously, there are a number of factors at play in the slowdown, and that includes cautious buyers who have read about the housing bubble and have decided to sit tight in their current homes. But that’s not that whole story.”

“In the market upswing over the past several years, every property was selling, regardless of price. As people continued to flock to Los Angeles, median prices rose, and with no end in sight to the boom, you could sell your home above its real value — or within a few points — with little to no resistance at all.”

“Over time, this booming-market mindset has conditioned many sellers to think their overpriced home will always sell for 10%-15% more than the listing price. Forget the fact that no renovations or improvements have been made in four years to substantiate that price.”

“But here’s the thing … When prices are high, and sellers are worried about a bubble, you must price strategically, understanding that buyers are tired of paying more than a home is worth.”

“Think of the slowdown as more of a reality check. It’s clear that buyers in major markets like Los Angeles still flock to attractive, well-priced homes. With this knowledge, you may need to rethink your listing price or you may need to perform some smart renovations to earn it. To succeed in the market slowdown, you simply must be smarter about pricing — because the buyers in your market already are.”

This Post Has 34 Comments
  1. ‘In the market upswing over the past several years, every property was selling, regardless of price. As people continued to flock to Los Angeles, median prices rose, and with no end in sight to the boom, you could sell your home above its real value — or within a few points — with little to no resistance at all’

    But Senator Running Deer said no can do? Appraisers?

    I’d say LA is fooked.

  2. ‘the home was competing against a ‘glut of inventory in a small suburban area where new homes are being built …’

    Built? Glut? I thought California needed half a billion shacks every year to kill the shortage? What happened to my shortage!!?

  3. “you simply must be smarter about pricing — because the buyers in your market already are.”

    Methinks the smart buyers were there all along, it’s just that the market finally ran out of stupid ones.

    1. Yesterday’s stupid buyers are today’s desperate sellers. Timing is everything in entering and exiting a market bubble.

  4. All houses now are underwater as the profeasor pointed out. No-Body (I emphasize Body) will pay 1,000,000 for a crap shack at 6% interest.

    I guess the days of the lady writing a love letter to a home seller in Vallejo in order to get her offer accepted. You know the lady who wanted a nice yard for her doggie to poop on.

    You know it is a bubble when there are bidding for shacks in Vallejo! Vallejo is like the Bay Area Detroit lol.

  5. “If you’re selling your home in any high-volume market and you’re worried about stalling prices, don’t set yourself up to lose with fear — set yourself up to win and be smart. Strategic thinking will make the difference between your home selling for its best value or staying on the market longer than you had hoped as an overpriced property.”

    realtor talk for Sell it I need the commission

  6. “In the market upswing over the past several years, every property was selling, regardless of price. As people continued to flock to Los Angeles, median prices rose, and with no end in sight to the boom, you could sell your home above its real value — or within a few points — with little to no resistance at all.”

    Lets hope no one paid too much in such environment!

    “But here’s the thing … When prices are high, and sellers are worried about a bubble, you must price strategically, understanding that buyers are tired of paying more than a home is worth.”

    I guess all buyers from the last few years are FOOOKEED

  7. Sacramento is a dump. People think their shacks are worth a gazillion dollars but they aren’t!

    I guess the Chinese Communist Party officials aren’t interested in buying cheap shacks in Sacramento with their laundered money.

  8. “If you’re selling your home in any high-volume market and you’re worried about stalling prices, don’t set yourself up to lose with fear — set yourself up to win and be smart.

    Translation: Realtors fed up with living on Ramen noodles and food bank scavengings need you greedhead sellers to slash your prices, pronto, so they can bank their desperately-needed commissions.

  9. (wave Jedi hand)This bubble isn’t the bubble you’re looking for. In fact it’s really a non-bubble bubble. As bubbles go…

    1. IIRC, when I was stationed at Travis, assigned personnel and their dependents were not allowed to live in Vallejo (or at least parts of it).

  10. “But here’s the thing … When prices are high, and sellers are worried about a bubble, you must price strategically, understanding that buyers are tired of paying more than a home is worth.”

    Also, my friend, when prices are too high, buyers with good credit and a downpayment who are currently renting just tune out. They go on Zillow and click on “rentals” and feel relieved to see there is decent inventory in case they have to move.

    It bugs me to see that realtors do not consider the price of rent and the rent inventory as a part of the equation for potential buyers.

  11. “But here’s the thing … When prices are high, and sellers are worried about a bubble, you must price strategically, understanding that buyers are tired of paying more than a home is worth.”

    So this realtor giving advise to sellers how to “strategize” pricing to lure the FB to buy the home for market rate rather than more than its worth. Shows so much integrity, must be rough for both the realturd and greedbag to have to sell a shack for what it’s supposed to sell for…

  12. Speaking of the People’s Republic of California…the election has brought more reasons for any individual or business that can do so, to leave.

    Their new Governor-elect has promised universal payer health care in the state. Estimated price tag: $400 billion.

    Meanwhile, in SF, a new tax on big companies was approved by the voters. This is supposed to raise $300 million/year to help the homeless.

    https://www.sacbee.com/news/politics-government/capitol-alert/article151960182.html

    https://www.forbes.com/sites/chuckdevore/2018/11/07/homeless-in-san-francisco-taxed-to-texas/#5675cf386fba

    1. “Estimated price tag: $400 billion.”

      Does that factor in the cost of service to the indigent hordes who will flock across California borders from every direction to exploit the public provision of private healthcare?

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