East Bay Blog

Although East Bay Real Estate is our focus, we always keep up to date on what the media is saying nationally about the Real Estate market. So today we had some news come out which said that last month (March), existing home sales posted their sharpest drop in 18 years. The reasons sited for this large drop? Two main reasons quoted were the bad weather we had earlier this year, and the sub-prime mortgage problems. If you have not already heard, a lot of the sub-prime lenders are having problems with foreclosures and short sales. So you, as a buyer/seller of real estate, how should you interpret this news? I think that depends on what your plans are.

If you are a first time buyer, or just a buyer period, this is the best market you could hope for. The media is helping fuel the fear that the real estate is in trouble. You can use this to your advantage when negotiating. (If you’ve read my blog before, you’ll know that in my opinion real estate is the best investment you can make) Asking price offers are no longer necessary in this market. If you are a first time buyer talk to your agent about what is a fair price to offer on a particular house. A lot will depend on market time, and history. If you don’t have an agent yet, I would be happy to assist you.

If you are a move up seller, this market is good for you. As a seller you may not like the fact that we are not in a seller’s market, but on your purchase you will be able to negotiate your purchase price down (see buyer paragraph above). Also with the right Realtor® it is still possible to have your home sell quickly. If you price right, and show well in the beginning, your home won’t sit on the market for months. So don’t worry, it’s relative, you are saving more than you are losing. At the end of your move, you should be seeing a benefit from this market.

If you plan to sell and not buy, this situation is a bit tougher for you. Do the math and calculate your cash flow if you rent out your property instead of selling. With the change in the real estate market, rents have been rising over the last year. If you can come close to breaking even, you may want to consider holding off on your sale. If you are a flipper, and you purchased with the intent of flipping property, I hope you did your research. It is very hard to flip real estate in this type of market. You cannot count on the market conditions you had when you purchased. Flipping should only be done by experts in this market.

The bottom line is that it is all about perspective. What your situation is, should dictate what type of real estate market you think we are in. I’m willing to bet that for at least half of you out there, this is one of the best real estate markets you’ve seen in a long time.

P.S. One word of advice. When selecting a Real Estate professional, make sure they do this full time. Over the last couple of months, I know there are many agents who have moved to part-time status. With the decline in volume, many agents are moving into other jobs to supplement income. Being a successful Real Estate professional is a full time job, don’t short change yourself.