Volume 139 - The Bird in the Hand!
Bang! I quickly looked up from my feeble attempts at cooking dinner, to the large plate-glass window in my kitchen and saw a bird falling to the ground. Rushing outside, I picked up the tiny Finch and watched as it struggle to breath, its little beak gasping for air; its tiny wings testing the air.
"What happened?" my younger son Tristan asked, standing beside me and looking down at my cradled hands? "I think it flew into the window and knocked itself out," I responded, hoping it hadn't done more damage than that.
Flap, flap, flap . . . after the last few years at a more reasonable and determined pace, recent sales activity has stepped up to a near harried level in the last several weeks. Suddenly, buyers are feeling a lot like that little bird crashing headlong into the marketplace and feeling every bit as dazed. In spite of stricter appraisal guidelines that confirm that values have softened considerably (or more likely, because of it) buyers are swarming to the market and intensely competing for the same few good homes. With inventory well below buyer demand and affordability UP, competition is stiff and well-priced homes are selling quickly and often - in multiple offers!
Aware that their purchase offers may likely surpass the appraisal results, buyers are often waiving the appraisal contingency altogether in order to strengthen their terms. In the face of tougher lending requirements that stipulate an appraisal, in order to fund the loan, many well-heeled buyers are coming up with enough cash to render this particular contingency in the contract moot. While banks are proceeding cautiously, motivated buyers are straddling caution and desire in equal parts - with desire to own often winning out.
For those less willing to compete at this level (or unable to) their comment is "What happened? I thought the market was soft."
Hmmm . . . That depends largely on where the market is. Modesto? Soft. Sacramento? Soft. Fremont? Soft. Piedmont? Berkeley? Rockridge? Not so soft as headlines would have you believe.
With inventory low, demand high and close proximity to The City always at a premium, these neighborhoods are enjoying much stronger sales than many neighboring communities nearby. So get your bearings, check your flight plan and look straight ahead - not behind. You'll need to adjust to the market we are actually in if you wish to reasonably compete.
And why shouldn't you?
Rates aren't expected to remain this historically low forever and home prices have yet to return to the highs enjoyed a few years ago. This healthy combination may make NOW the best time to buy for several years to come.
Sellers - with so many motivated buyers at hand, NOW may be a terrific time to sell - AS LONG AS you price your home appropriately. (While sales activity is indeed UP, it isn't necessarily reflected in higher selling prices.) Don't mistake the increased interest for unrealistic results.
So avoid flying head first into glass. No need to be stunned with so much good information to be had. I'll get you back in the air.
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Julie Gardner, has been writing The Perspective for 18 years and has published more than 670 essays on life and real estate.