As a Realtor, the most common question I get is “What’s going on with the market?” Of course people want to know. Sometimes it’s very easy to answer that question, other times it’s not. Like now.
I just got done looking over the Zillow market report for Salinas. It’s full of “mixed” news. Here’s some key data:
Good stats include single family homes purchased in 2009 have 50,814 in equity for median owners. Compare that to median owners who purchased in 2006 (they are minus 214,305). Homes purchased in 2009 with negative equity stand at 22%. Homes purchased in 2006 with negative equity stand at 83%.
While those are good stats, there are also some bad ones to look at.
Single family homes lost 37.3% value over last year in Salinas. The last time the market was at this value was the second quarter of 2000. The percentage of homes losing value the past 12 months is 93.3%
The foreclosure transactions the past 12 months have increased by 46%. Salinas has lost more value than any other town in Monterey County this past year. The zip with the highest value lost is 93906 (46.8%)
Ok, so you bought your home before prices got crazy. You’ve been paying your mortgage on time, keeping your credit score high. You’ve done all the right things. You could be the perfect candidate to move up.
Think about it. Interest rates on a 30 year fixed rate loan could be lower now than when you bought. Depending on your location and where you would want to move, you might be able to buy a home that is bigger and newer, finance it cheaper and come out with a lower payment then you currently have.
Depending our your financial situation, you might even be able to rent out the house you’re living in and have future equity.
This is a very difficult concept for buyers to wrap their head around. They see a home being marketed at a certain price and they assume that’s what the home is worth to the seller.
Wrong!
The home is worth “market value”. What exactly is market value? It’s what a buyer is willing to pay for that type of property at that time. It could be more than the listing price, it could be less.
Here’s the problem, buyers are not used to buying things like that. Oh, we go car shopping and see the sticker price and start negotiating down from that, but who goes to a store or showroom and expects to negotiate up? No one. And yet, this is what it takes to buy nice homes in this kind of market.
How much more? You need good information and data to make that determination. I’m doing market analysis on properties for my buyers so that can make smart decisions on what they should pay for properties.
Don’t get caught thinking that list price equals market value. In many cases, it does not…..
Summer is the traditional season for relocating. Families move into new school districts, the weather cooperates and buyers get excited.
This year looks particularly inviting. Low interest rates, foreclosed properties at bargain prices and income tax incentives for qualified buyers. What’s not to like about that? Are you ready to pack up?
