Open House Sunday 1-4pm
4392 Bellflower Dr.
La Mesa, Ca 91941
San Diego County
Call John Goodell 619-895-0389 for more info.
www.SDHomePros.com
Friday, July 16, 2010
Friday, July 9, 2010
County Home Prices Up 7 Percent in May--------- Really?
We are all hungry for good news about the San Diego real estate market, especially those of us who make our living as realtors. We all want to run out and tell our clients and our potential clients that things are looking up, there’s good news, and now is the time to do something.
So why do I resent news headlines like the one above found today in the Union Tribune. It is because even though I long for good news, truth and accuracy are more important. Yes, you can take a positive or a negative approach to most things, and I try to stay mostly on the positive side. So if you ask me the proverbial question, “Is the glass half full or half empty?â€, I will usually reply it is half full. In this case, it is perfectly acceptable to choose the positive approach because it too is accurate. But to say the glass is half full when only a few drops have been added to the empty glass goes beyond being positive, it is false. Visit http://ping.fm/Ds9oi to read the rest of the article.
We are all hungry for good news about the San Diego real estate market, especially those of us who make our living as realtors. We all want to run out and tell our clients and our potential clients that things are looking up, there’s good news, and now is the time to do something.
So why do I resent news headlines like the one above found today in the Union Tribune. It is because even though I long for good news, truth and accuracy are more important. Yes, you can take a positive or a negative approach to most things, and I try to stay mostly on the positive side. So if you ask me the proverbial question, “Is the glass half full or half empty?â€, I will usually reply it is half full. In this case, it is perfectly acceptable to choose the positive approach because it too is accurate. But to say the glass is half full when only a few drops have been added to the empty glass goes beyond being positive, it is false. Visit http://ping.fm/Ds9oi to read the rest of the article.
Thursday, July 8, 2010
County Home Prices Up 7 Percent in May--------- Really?
We are all hungry for good news about the San Diego real estate market, especially those of us who make our living as realtors. We all want to run out and tell our clients and our potential clients that things are looking up, there’s good news, and now is the time to do something.
So why do I resent news headlines like the one above found today in the Union Tribune. It is because even though I long for good news, truth and accuracy are more important. Yes, you can take a positive or a negative approach to most things, and I try to stay mostly on the positive side. So if you ask me the proverbial question, “Is the glass half full or half empty?”, I will usually reply it is half full. In this case, it is perfectly acceptable to choose the positive approach because it too is accurate. But to say the glass is half full when only a few drops have been added to the empty glass goes beyond being positive, it is false.
What does this have to do with the headline? The headline is deceptive. What rose 7 percent was the median price. In this case, the median is a very poor and deceptive statistic. This shift is portrayed as good news. Sounds good, right? The implication is that values of individual properties are going up and the market is getting healthy. But is this true?
Just what really caused the movement in the median, and is it really good news? Last year, the entry level market was extremely active with banks bringing a steady supply of foreclosed properties to the market. Combining with the generous supply at the lower end was a voracious demand fuelled by investors, people longing to be first-time home owners, and tax incentives from the federal and state governments. With this high level of activity at the entry level, the median was shifted toward the lower end.
As we moved through last year and into this year, the supply of available homes at the entry level steadily dropped as government restraints and the banking industry’s reluctance to foreclose on home owners reduced the flow of bank-owned properties to the market. With the drop in supply, we also saw a drop in demand as economic uncertainty continued and the tax incentives expired. The combination of a lower supply and a lower demand reduced the number of entry level homes being sold. It is this drop in sales at the lower end that shifted the median to a higher level. The median price can move up even if real prices are moving down!
Real prices do appear to have moved up slightly at the lower end of the market, but they are soft at the middle and high segments of the market. It will be difficult to maintain the gains at the low end as we move through the large number of distressed properties that remain in various stages of default. And the move-up market is currently at a standstill due to the lack of people able to sell the down-leg property of a move-up transaction through a traditional sale. It is imperative, therefore, that we work through the distressed properties as soon as possible. This “real” picture is different from the one implied by the headlines. We need less interference in the market and more transparency.
Can we still find good news without the distortions? Yes! Real estate is a long term investment, and as such, now is a good time to buy. Is it a good time for anyone to sell? Again, yes! As is often the case, the very conditions that create difficulty for some, provide opportunity for others. The inability of many to sell their home through a traditional sale and move up to a nicer home creates a great opportunity for those who are able to do it. The lower sales price of the home you sell is more than offset by the bargains and selection you will find at the next level up. And interest rates remain incredibly low. So if you can, and you have some desire to do so, sell your current property and move up to the next level, or maybe even to your dream home! Now truly is a great time to do it, and this is really good news for those who can make the move.
For more information contact John Goodell. 619.895.0389 or jgoodell@coldwellbanker.com
To view todays Real Estate Inventory visit: http://www.sdhomepros.com/
So why do I resent news headlines like the one above found today in the Union Tribune. It is because even though I long for good news, truth and accuracy are more important. Yes, you can take a positive or a negative approach to most things, and I try to stay mostly on the positive side. So if you ask me the proverbial question, “Is the glass half full or half empty?”, I will usually reply it is half full. In this case, it is perfectly acceptable to choose the positive approach because it too is accurate. But to say the glass is half full when only a few drops have been added to the empty glass goes beyond being positive, it is false.
What does this have to do with the headline? The headline is deceptive. What rose 7 percent was the median price. In this case, the median is a very poor and deceptive statistic. This shift is portrayed as good news. Sounds good, right? The implication is that values of individual properties are going up and the market is getting healthy. But is this true?
Just what really caused the movement in the median, and is it really good news? Last year, the entry level market was extremely active with banks bringing a steady supply of foreclosed properties to the market. Combining with the generous supply at the lower end was a voracious demand fuelled by investors, people longing to be first-time home owners, and tax incentives from the federal and state governments. With this high level of activity at the entry level, the median was shifted toward the lower end.
As we moved through last year and into this year, the supply of available homes at the entry level steadily dropped as government restraints and the banking industry’s reluctance to foreclose on home owners reduced the flow of bank-owned properties to the market. With the drop in supply, we also saw a drop in demand as economic uncertainty continued and the tax incentives expired. The combination of a lower supply and a lower demand reduced the number of entry level homes being sold. It is this drop in sales at the lower end that shifted the median to a higher level. The median price can move up even if real prices are moving down!
Real prices do appear to have moved up slightly at the lower end of the market, but they are soft at the middle and high segments of the market. It will be difficult to maintain the gains at the low end as we move through the large number of distressed properties that remain in various stages of default. And the move-up market is currently at a standstill due to the lack of people able to sell the down-leg property of a move-up transaction through a traditional sale. It is imperative, therefore, that we work through the distressed properties as soon as possible. This “real” picture is different from the one implied by the headlines. We need less interference in the market and more transparency.
Can we still find good news without the distortions? Yes! Real estate is a long term investment, and as such, now is a good time to buy. Is it a good time for anyone to sell? Again, yes! As is often the case, the very conditions that create difficulty for some, provide opportunity for others. The inability of many to sell their home through a traditional sale and move up to a nicer home creates a great opportunity for those who are able to do it. The lower sales price of the home you sell is more than offset by the bargains and selection you will find at the next level up. And interest rates remain incredibly low. So if you can, and you have some desire to do so, sell your current property and move up to the next level, or maybe even to your dream home! Now truly is a great time to do it, and this is really good news for those who can make the move.
For more information contact John Goodell. 619.895.0389 or jgoodell@coldwellbanker.com
To view todays Real Estate Inventory visit: http://www.sdhomepros.com/
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