This winter's real estate market is expected to be difficult on those selling property.
Historically, the number of homes sales in North County drop by as much as 30 percent during the last three months of the year. This year will be no exception as both single family and condo sales are down from 2007.
The number of Carlsbad single family home sales recorded in the Multiple Listing Service from April to July, which is the peak of the selling year, has decreased by 24 percent from the previous year (231 sales versus 304 in 2007). Only 73 attached sales were recorded in Carlsbad for the first three months of 2008, which is 38 percent less than the same time period in 2007.
But a slower market is not necessarily bad. General price declines tend to happen when there is an overwhelming amount of competing homes.
When competition is high, homeowners will undercut their competition to sell first, leaving the remaining home sellers with a new, lower neighborhood sale that resets the local values. Although there have been less sales this year, there also are fewer actively marketed homes.
On Sept. 10, there were only 477 actively marketed homes for sale in Carlsbad compared to 629 on the same day in 2007.
How to compete in a winter market
Homeowners planning on selling a home in the winter market cannot make the mistake of mispricing their home. Sellers may be tempted to test the market by raising their listed price above the market value and then lower the price if no buyer surfaces.
Sellers are advised against this tactic. A high price will discourage the buyers from visiting the property, an essential step in securing an offer on your home.
Today's agents and buyers rely heavily on the internet to save them time in their home search. Few buyers want to trudge through 20 homes and take days to negotiate with an unrealistic seller.
An overpriced home will be discarded and avoided. Today's buyer expects a deal.
Sellers should price aggressively from their first day on the market. Sellers also should realize that even at their aggressive price, buyers will still make their offer below asking price. It is the nature of the current market.
Unless faced with the threat of losing the property to another bidder, the low-ball buyer will be reluctant to raise the offering price. Sellers should understand this and even consider waiting until the new year to put their home on the market.
Buyer activity picks up in February and sellers may have a better opportunity at securing their desired price.
Mortgage rates
Recent government intervention into Fannie Mae and Freddie Mac is showing a positive short-term affect on the mortgage markets. Last month, conforming loan rates fell to around 5.7 percent for a 30-year fixed loan.
This is a blessing for both buyers and sellers. It makes homes more affordable to buyers and encourages buying in a slower winter real estate market.
Lower rates also create an opportunity for homeowners to refinance. Homeowners should analyze their personal situation to see if the cost of a refinance, usually around 1 percent of the loan amount, is worth the added savings of a lower rate.
Timing a winter market
If you will be taking advantage of the lower rates and the remaining foreclosure and short-sale homes, you must be aware of escrow timeframes. Those with experience in bank-owned or short-sale property know that delays in closing escrow, sometimes as much as a month, are commonplace.
Buyers need to take precautionary measures against changes in their rate and loan terms in the event rates go up during the course of escrow.
Historically, the number of homes sales in North County drop by as much as 30 percent during the last three months of the year. This year will be no exception as both single family and condo sales are down from 2007.
The number of Carlsbad single family home sales recorded in the Multiple Listing Service from April to July, which is the peak of the selling year, has decreased by 24 percent from the previous year (231 sales versus 304 in 2007). Only 73 attached sales were recorded in Carlsbad for the first three months of 2008, which is 38 percent less than the same time period in 2007.
But a slower market is not necessarily bad. General price declines tend to happen when there is an overwhelming amount of competing homes.
When competition is high, homeowners will undercut their competition to sell first, leaving the remaining home sellers with a new, lower neighborhood sale that resets the local values. Although there have been less sales this year, there also are fewer actively marketed homes.
On Sept. 10, there were only 477 actively marketed homes for sale in Carlsbad compared to 629 on the same day in 2007.
How to compete in a winter market
Homeowners planning on selling a home in the winter market cannot make the mistake of mispricing their home. Sellers may be tempted to test the market by raising their listed price above the market value and then lower the price if no buyer surfaces.
Sellers are advised against this tactic. A high price will discourage the buyers from visiting the property, an essential step in securing an offer on your home.
Today's agents and buyers rely heavily on the internet to save them time in their home search. Few buyers want to trudge through 20 homes and take days to negotiate with an unrealistic seller.
An overpriced home will be discarded and avoided. Today's buyer expects a deal.
Sellers should price aggressively from their first day on the market. Sellers also should realize that even at their aggressive price, buyers will still make their offer below asking price. It is the nature of the current market.
Unless faced with the threat of losing the property to another bidder, the low-ball buyer will be reluctant to raise the offering price. Sellers should understand this and even consider waiting until the new year to put their home on the market.
Buyer activity picks up in February and sellers may have a better opportunity at securing their desired price.
Mortgage rates
Recent government intervention into Fannie Mae and Freddie Mac is showing a positive short-term affect on the mortgage markets. Last month, conforming loan rates fell to around 5.7 percent for a 30-year fixed loan.
This is a blessing for both buyers and sellers. It makes homes more affordable to buyers and encourages buying in a slower winter real estate market.
Lower rates also create an opportunity for homeowners to refinance. Homeowners should analyze their personal situation to see if the cost of a refinance, usually around 1 percent of the loan amount, is worth the added savings of a lower rate.
Timing a winter market
If you will be taking advantage of the lower rates and the remaining foreclosure and short-sale homes, you must be aware of escrow timeframes. Those with experience in bank-owned or short-sale property know that delays in closing escrow, sometimes as much as a month, are commonplace.
Buyers need to take precautionary measures against changes in their rate and loan terms in the event rates go up during the course of escrow.