I suggested in my "Predictions for 2009" that prices would be directly affected by new foreclosures coming to market. For the past 4 years, areas that had lots of foreclosures dropped as much as 50, whereas areas that had lower rates of default lost less than 10. It was my expectation that, based on continued high default rates, prices would be soft and in many areas continue to decline because of foreclosure competition driving prices down. Surprisingly, the amount of foreclosures coming to market has been a fraction of last year at this time. In fact, inventory in Santa Clarita is at about 1150 homes vs. 2065 a year ago. So what is happening 1. Starting last year many loan servicers started complying with a government led "moratorium". I have tracked dozens of homes that went to foreclosure sale in December, January, Februaury and March that have never come on the market. I could write a thesis on what I believe is happening here, but suffice it to say they aren't for sale...yet.
Neal's Blog
A large part of my time is spent meeting with and advising sellers. It is advice that varies from area to area and especially from the very busy lower price points to the very slow higher price ranges. It truly is 2 completely different markets. Understanding the differences and tracking the numbers is crucial. An agent really can't accurately advise a seller without fully understanding the dynamics of what is selling and what is not. What every seller wants to know is "how much and how long?" and if how much isn't "enough" then how long before it goes back up?. Every seller in every price point asks these questions and the best agents always know the answers, in any type of market. To be able to answer them in a confusing market like we are in today requires an understanding of who the buyers really are and what their motivation is. In other words to have a "sale" you need a home for sale AND a buyer. In today's market there are clearly two types. The first buyer is the one