How To Benefit From Weak Housing Market – Irvine Real Estate – Irvine Homes for Sale

by Robert Mack on February 23, 2011

in Buyers, Latest News

While there are some economists, bloggers and news reporters warning again of a double dip in real estate, the California Association of Realtors (“C.A.R.”) forecasts that the year ahead will bring stability to our California real estate market. Indeed the January S& P /Case-Shiller report, considered a leading indicator of home prices, shows recent gains in the L.A. area.

This L.A. area study covers month to month gains for Los Angeles & Orange County. While year to year prices were down 3.5%, the latest monthly report for the October to November period shows prices were up approximately 1%. There is a 2 month lag between the date of issuance of the report and the period for which the data is reported.

While the volume of sales is sluggish, if a property is under-priced for the market, it is still possible to get multiple offers. Some agents will use this “under-pricing” strategy to generate multiple offers. What can buyers do to assure they obtain the best value in this market? First, if you create a mindset that there is no one house that you must have and do not fall in love with any one property, you will fare much better in your negotiations. In fact, you might let the seller’s agent know you have other properties in mind.

Although there have been two or more offers on a property, the other buyers may have cooled. The seller’s agent may still lead you to believe you are in competition with others. Also, you rarely know how strong these other offers actually are. The price may be much less or the buyer may not be a good credit risk. Many buyers are finding that they cannot qualify for the desired loan.

As a buyer, determine the seller’s motivation. You should know how much the seller owes against the property and if the seller is currently in default on the mortgage or property taxes. Set a price that you believe is reasonable and stick to it.

According to the Case-Shiller report, the change from the peak month of September 2006 to now shows a drop of 38%. We are already seeing signs of rising interest rates, so even if prices were to drop, it may not be to your benefit to wait in a rising interest rate environment.

It is significant to note that all three tiers of the L.A. housing market, the low, middle and high end increased in November with the low tier getting the biggest boost up 2.2% in a month. San Francisco, San Diego and Los Angeles still appear to be on the rise, while other areas of the country seem to be losing steam from the summer 2009 price boost.

The key both in buying as well as in pricing your property for sale is to understand your local market. This means evaluating recent as well as pending sales in your neighborhood.

Posted on Irvine Orange County Real Estate Market News

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