Today's real estate market is not unlike the animal kingdom. As many animals survive by feeding off their prey and by avoiding being food themselves, today's home-buyers hunt daily for their perfect-deal. They have a wide selection of carnage: short-sales, bank-owned foreclosures, divorce-sales or corporate relocation property. And once they have their choice, home-buyers negotiate hard and offer 10% or more below listed price on their initial offer. But what is an interesting change in mindset, 2011 buyers are quick to move their price upwards on the threat of competing bidders. In 2009, multiple offers would have opposite effect. Buyers would withdraw their offers not wanting to be a part of a bidding war. This change in buyer mindset is important for home-sellers to maximize their result in today's tough real estate market.
By historical standards and in comparison to the boom years, current housing affordability is high. California Association of Realtor's First-Time Buyer Housing Affordability Index, which measures the percentage of households that can afford to purchase an entry-level home in California – has San Diego County at 60 percent affordability in 3rd quarter 2010, up from 26 percent in third quarter 2005. This means that 60 percent of first-time buyers can afford an entry level home. Carlsbad has shown a recent rise in average sales price for the 4th quarter of 2010 when compared to 2009. But this was due to a mix of higher priced homes selling and pushing up the average. In 2009, 4th quarter average sales price of single family home was $689,974 from 249 sales. In 2010, the average sales price was $721,400 from 229 sales. Carlsbad's home prices are expected to stay relatively flat during the first half of 2011. Only areas of North County where there is above average competition can prices be expected to be less (no more than 3 percent) than the most recent closed sales. This fact should help homeowners wanting to sell in the current marketplace stand their ground, as home-buyers should continue to make initial low offers.
Homeowners with homes priced under $1M, should be able to secure within 3 percent of their asking price. Sales are expected to increase over the next three months in Carlsbad by as much as 30 percent. Currently, there are 260 single-family homes listed for sale (under $1M) in Carlsbad with around 58 selling per month. This leaves around four months of inventory — a number that signals price stability in the short-term.
Homeowners should be aware of three things: market-time, competing property and asking price. Brokers and buyers will aggressively avoid seeing a home with above-average market time. Luxury property excluded, the average Carlsbad home sells in 90 days. The pariah listed for 250 days is often not shown due to the perception that others must have seen it and not made an offer. The herd mentality is: “There must be something wrong with it.” Homeowners may benefit from removing their property from the market for a short time and re-listing the home at a later date. It is a curious event to see the increase in number of showings and even sales that have happened because those involved felt that they were bidding on a home new to the market and before anyone else.
But homeowners do not need to experience the pain of 250 days on the market. High market time can be avoided by clearly understanding what homes you are competing with and pricing your home competitively. Since homebuyers are now more greedy than fearful, if you are able to generate a significant amount of interest and multiple offers, you will have the best chance at a premium outcome. Fear of loss will stimulate the buyer to put his best foot forward. And if the number of homes does not increase substantially, the first half of 2011 should see a higher number of multiple offers and sellers securing closer to their asking price.
By historical standards and in comparison to the boom years, current housing affordability is high. California Association of Realtor's First-Time Buyer Housing Affordability Index, which measures the percentage of households that can afford to purchase an entry-level home in California – has San Diego County at 60 percent affordability in 3rd quarter 2010, up from 26 percent in third quarter 2005. This means that 60 percent of first-time buyers can afford an entry level home. Carlsbad has shown a recent rise in average sales price for the 4th quarter of 2010 when compared to 2009. But this was due to a mix of higher priced homes selling and pushing up the average. In 2009, 4th quarter average sales price of single family home was $689,974 from 249 sales. In 2010, the average sales price was $721,400 from 229 sales. Carlsbad's home prices are expected to stay relatively flat during the first half of 2011. Only areas of North County where there is above average competition can prices be expected to be less (no more than 3 percent) than the most recent closed sales. This fact should help homeowners wanting to sell in the current marketplace stand their ground, as home-buyers should continue to make initial low offers.
Homeowners with homes priced under $1M, should be able to secure within 3 percent of their asking price. Sales are expected to increase over the next three months in Carlsbad by as much as 30 percent. Currently, there are 260 single-family homes listed for sale (under $1M) in Carlsbad with around 58 selling per month. This leaves around four months of inventory — a number that signals price stability in the short-term.
Homeowners should be aware of three things: market-time, competing property and asking price. Brokers and buyers will aggressively avoid seeing a home with above-average market time. Luxury property excluded, the average Carlsbad home sells in 90 days. The pariah listed for 250 days is often not shown due to the perception that others must have seen it and not made an offer. The herd mentality is: “There must be something wrong with it.” Homeowners may benefit from removing their property from the market for a short time and re-listing the home at a later date. It is a curious event to see the increase in number of showings and even sales that have happened because those involved felt that they were bidding on a home new to the market and before anyone else.
But homeowners do not need to experience the pain of 250 days on the market. High market time can be avoided by clearly understanding what homes you are competing with and pricing your home competitively. Since homebuyers are now more greedy than fearful, if you are able to generate a significant amount of interest and multiple offers, you will have the best chance at a premium outcome. Fear of loss will stimulate the buyer to put his best foot forward. And if the number of homes does not increase substantially, the first half of 2011 should see a higher number of multiple offers and sellers securing closer to their asking price.