Don’t let your sellers read this. They won’t like it.
Real Estate from A to Z
by Aaron Zapata, MBA, CHS, Broker, Relocation Certified
It’s almost midnight and I am writing this blog. I drank too much caffeine this evening so I’m up and thinking about real estate. Yes, I’m must be crazy.
I had a conversation with a great client of mine today after we got a “low ball” offer on his property. The conversation went like this:
Client – “You think the prices are going to come down from here?”
Me – “I know they are going to come down. In fact, they are coming down right now”
How do I know prices are going to come down?
Well, a few weeks ago I posted to my Facebook page (www.facebook.com/aaronzapatarealestate) that reading the real estate news in the papers is like reading a history book. The point is that news organizations like to report facts (well most of them do, some don’t care to make sure the “facts” are really the “facts”…that’s beside the point) and in order to do that, they have to look at closed sales data. Those hard and fast numbers, however, are all rearward looking. They reflect the market activities from 60-90 days ago. I, as a Realtor, get to see in real-time what is happening, what buyers are saying, feeling, and doing. What they do today won’t be in the papers for another 60-90 days.
Here’s what I see happening today on my listings. Sellers don’t like this information, but it’s true.
Anaheim Hills. I have a luxury home listed at over $1M and we are getting very few showings. It’s been listed for 8 months and not a single offer. Homes coming on the market in this area are lower priced and there are a few short sales that have closed at much lower prices. No offers means it’s priced too high and I’ve had buyers tell me that too.
Placentia. I’ve got a great little starter home under $200k. We should be getting tons of activity on it, but we are not. We got an offer 15% below list price. The only offer in a month.
Chino Hills. I listed this home almost 3 months ago and got a full price offer in the first 5 days. Unfortunately, the buyer took a huge pay cut shortly after opening escrow and had to back out. We’ve since lowered the price by $10,000 and not a single offer has followed.
Ontario. I have another starter home and the owner agreed to price the home 5% under the short sales and REOs. We got 10 offers in the first 2 weeks and are in escrow for an amount over asking price.
La Habra. I have this listing in escrow now after getting 4 offers within 10 days almost 2 months ago. Three weeks ago, however, it was doubtful whether or not the buyers were going to be able to close escrow and I put the home back on the market as Active. It stayed that way for 3 weeks and showings were horrible and no offers came in.
Laguna Niguel. I listed this short sale almost 6 months ago. In the first week we had 3 offers for full price. The bank took way too long to approve the sale (they still haven’t) and we lost the buyer. We had a back up offer for full price and that buyer has since moved on as well. We have now lowered the price 10% from the original offer. While showings are strong, we aren’t getting any offers.
So what does that say about the market?
The only listing I am getting activity on is the home that was “underpriced”. The rest are sitting there with little activity and no offers. These listings are in 3 Southern California Counties (Orange, Riverside, and San Bernardino) and are all experiencing the same thing.
In my weekly Yorba Linda Homes For Sale Real Estate Market Update I see an average closing price that is only 92% of the listing price. That’s an 8% discount between what a seller is asking and what they are actually getting.
In two months the newspapers will boldly proclaim that home prices have come down! For me and my clients, that will be old news. My advice to sellers, lower your price and get your home sold before another homeowner lowers theirs and steals your equity. I know, it’s not what you want to hear, but this is advice based on what I see all around me today.
Do you need someone to help you navigate the real estate market? Let Aaron Zapata, MBA, CHS help you through these tough times to help you make the best decision for you and your families.
Aaron Zapata is a licensed Broker with Prudential California Realty and serves clients in Orange, Los Angeles, Riverside, and San Bernardino Counties. He holds and MBA from Cal State Fullerton which gave him the skills to understand Economic data and apply them to the local real estate market. He is also a Certified HAFA Specialist (CHS). HAFA is the Home Affordable Foreclosure Alternative government program that helps homeowners through the shorts sale process. He is also a Certified Relocation Sales Professional and has been quoted by the Orange County Register and the Associated Press. He has a Spanish-speaking assistant and a full-time transaction coordinator that assist him and his clients.
To contact his office, call (800) 573-1520 or email him at Aaron@AaronZapata.com.