Practicing Patience
November 7, 2008
I was listening to a Brian Buffini CD in my car yesterday talking about the current real estate market, how different it is from previous ones, and how patience is the key to getting through this one. He’s been in the business over 20 years and owns the largest coaching company for realtors in the country. He’s speaking with thousands of agents every year. Many are leaving the business after 30 or 40 years. I’m in my 10th year, so not exactly a novice.. While I am not inclined to buy into the gloom and doom that many are, I do want to pay attention to trends. Someone would have to reside on a different planet not to know how foreclosures and short sales are dominating the marketplace as far as available inventory—over 62 percent are bank-owned and a good portion of the rest are short sales.
Patience is a virtue, and boy is it needed if you’re a buyer in this market. I am working with several buyers right now who have made multiple offers on properties and don’t get the deal. Cash is still king, especially with banks. Buffini says he advises buyers to make an offer and keep looking. Don’t get attached. I have to agree. I have clients that are happily moved in after months of looking and multiple times at bat. Finally they scored.
In Sacramento, some areas are back to 2002 prices. Not everywhere is this true. Established neighborhoods like Midtown, East Sac, River Park, Sierra Oaks, Arden Park, Wilhaggin, Land Park, Curtis Park have been holding their values better than some. However, look in Elk Grove, Natomas, West Sacramento where new development was greatest, and you’ll find deal after deal where homes have dropped almost 50 percent from their last purchase price. Trendgraphix, a data tracking service available only to Lyon agents, helps us sort fact from fiction. In October 2002, zip codes 95816, 95818 and 95819 homes sold averaged $219/sf. In October 2008, that figure is $284/sf (just dropped below $300/sf in the last two months). In Elk Grove and Natomas the drop is actually below 2002 prices of $146/sf to an average in 2008 of $127/sf.
This is a hot market where buyers need to be prepared to act quickly when they find a home they like. They need to know values, what the property is most likely to appraise for, their pre-approval letter from a recognized and trusted lender, money set aside for a good faith deposit, and a huge tolerance for not knowing what the seller side is doing. Long waits, no responses, last minute changes and multiple offers are common place right now. For those that are willing to work with the new terrain, there are good deals to be made.
I love the hunt for that perfect home. I know that’s the high that most of us who love this business feel when we’ve been able to help someone achieve their dream of homeownership. When we finally get through the process and hand the keys over, the hours of searching and all the disappointments from deals that didn’t work out, become a distant memory. It’s the stuff we build our stories on about how we found our own “home sweet home.”
If you or someone you know needs a trusted advisor to help them find or sell a home in this unpredictable market, I’d love to be the one you call. Visit my website at www.DeLongTeam.com. If you’d like to be on my email list for the latest figures from Trendgraphix, just ask.
