After last week's pragmatic overview of the market in The Perspective, I received a quick response from my long-time friend Vivian, who migrated to Terra Linda (Marin) a few years before I moved my family to Piedmont. Vivian and I exchange a frank debate about real estate on a weekly basis and she wanted an update about the future of the market (who doesn't?). Of all my friends, Vivian is typically the one who always sees the glass as half full, so I wondered if her concerns reflected the average homeowner's feelings. From the discussions I've had all week - they do . . .
Before responding, I wanted to get a true read on sales activity in the North Bay (remember, markets are local!). Picking up the phone to speak with my colleague, Val Rogers of Frank Howard Allen in Marin (firstname.lastname@example.org) I inquired about her recent experience in the market there.
Val who sells home in Ross (the Piedmont of Marin) Kentfield, Greenbrae, Mill Valley, Tiburon, Sausalito, Novato and Terra Linda and has more time in the trenches than just about anyone I know. I consider her not only a good friend and a mentor but also a finely tuned barometer of the marketplace and of our industry as a whole. "Prices have adjusted 10-12% in Marin and they are holding steady," Val said. "By no means, are sellers 'giving away' their properties. They simply have too much equity in them and don't need to. Good properties continue to jump off the market in Marin." (Whew, that's been my experience here in the East Bay as well.) Together this is what we concluded: Should sellers enter the market? That depends. What are the sellers' goals and motivation and are their expectations realistic? If yes, then there are still plenty of well-qualified buyers. While many REALTORS often advise sellers to wait until the spring, we really have no idea where the market will be in 2009. If you need to sell, you should move forward.
Should buyers enter the market? Absolutely - After years of competing in a Sellers' Market, take advantage of the highly-anticipated Buyers' Market! (My employer, DJ Grubb, believes we have already hit the bottom!) What if the market continues to correct? It very well may, but holding out for "the bottom" may cause you to lose the unique home that fits your needs and requirements NOW. If you plan to stay in the home for several years, any further adjustments should be irrelevant in the long-term. If you plan to sell within a few years - rent. Are loans tougher to come by? Yes, they are, but liquidity does still exist. Meet with an experienced mortgage broker or your local banker before entering the marketplace to find out what steps you need to take in order to secure funds. Accorging to Diane Crosby of La Salle Finance, interest rates are expected to drop significantly next week! www.lasallefinance.com Is cash king in this market? Often - but not always. Cash is important to strengthening the terms of your offer - especially if it eliminates the appraisal condition or speeds up the close significantly - but cash doesn't trump a full price offer. (All offers are all cash to the seller at the close of escrow. How many days would you wait for an extra $25,000, $50,000 or $100,000? Thirty? Fourty-five? Even sixty? (Me too). It is a mistake to think that just because you have an ALL CASH offer, you are entitled to a wholesale price. All things being equal, a seller will likely take a slightly lower 'ALL CASH' offer in front of a highly-leveraged one (especially now) but a seller won't take it in lieu of a higher offer (practically and emotionally, sellers don't like to discount their homes.) Here is our collective bottom line . . .
Julie Gardner, has been writing The Perspective for 15 years and has published more than 600 essays. She is also a frequent contributor to the Sound Off column in the Real Estate section of The San Francisco Chronicle.