Review - Winter 2005
Review - Winter 2005DEAR FRIENDS AND PAST CLIENTS,
HAPPY NEW YEAR! Thank you for your support in 2005 – not just for your business & referrals but for the flood of calls & letters for my daughter Sarah’s fight with Hodgkins Lymphoma. I am elated to share with you that the treatments are done, her hair is growing back and her doctors are very happy with her recovery. It was heartwarming to me to see that so many people cared. Thank you.
2005 was a year in transition in real estate and I believe 3 things will follow in 2006. To recap, values appreciated 8-14% in 2005 from January to May. From June on appreciation and values were mixed depending on the area, price range and type of home. Because we study this daily it didn’t take long to see the trends that will shape 2006. First, homes will take longer, probably much longer, to sell. There are homes today in every part of our valley that have been for sale since last summer. Mostly it is because the sellers priced them above what homes sold for in April/May and the market never reached their price. However many of those sellers did make price reductions and still didn’t sell. The end result is that unlike 2004, the inventory never dropped at the end of 2005 and today there are over 1100 homes for sale and it is climbing daily. This signals what is known as a “soft landing” in pricing and a more normal market in terms of how long it takes to sell a home. As such, pricing properly will be more critical than ever – as sellers try to find their proper value in today’s market.
The next trend I expect is for the overall amount of sales to be down in 2006 in our valley by about 20%. The main reason stems from my expectation that appreciation will slow or stop and the investors/speculators will sit out 2006. In addition there will again be a lack of new construction available that has driven the move up buyers. Add it up and it means less total homes sold until the new construction of 2007 hits. Essentially the “easy sales” of the last few years will be significantly reduced – we will join the rest of the country in a more normal market.
This will lead to the final shift which is a need by the public for more qualified and professional real estate advice. The fact is 2006 will have some record sales – but only for homes that are unique, desirable or in high demand areas. Only agents that really know the specific tracts in our valley will know which those are. For example, a nice Presidio in the Woodlands tract in the upper million range would have a lot of interest. A condo in Valencia Copperhill may be not so much. A pool home in the Torcello/Twilight Vista part of Stevenson Ranch will still sell at record high prices. A nice 4 bedroom in older Stevenson Ranch with average upgrades will probably sit awhile. In all cases the agent that actively markets, actively networks, and really knows what is happening will help their client maximize their situation - as buyer or seller. The out of area agent, the new agent, and the passive agent has never seen a market like this and will put their client at a disadvantage. In short what kind of a market your specific home is in may be confusing – some homes will sell, some will sit, some will be high, some lower. Not everything will go up, in fact homes not in saleable condition will likely go down and it may be confusing as to why. Hence the need for the best possible insight and representation.
Because of this I have recommitted myself and my team to being more active and aggressive than ever. Simply stated this type of market demands it and my clients deserve it. I have added a full time marketing director not because I want to be bigger (I don’t) but because the importance of the Internet in real estate demands it. More than ever your referrals and repeat business will be essential as I put buyers and sellers together.
Should you ever want to discuss your real estate needs, how a changing market affects you or how I can help your friends and family I welcome your call. Thank you again for your tremendous support!