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Should you wait to buy or sell?

We are seeing an up-tick in real estate sales activity in the last couple of weeks, influenced by several factors:  increasingly favorable interest rates, desirable prices and excellent selection of inventory.  Also, February is the month when serious buyers start to re-enter the market.   We’ve seen several multiple offer transactions in the last week as buyers try to secure low interest rates and favorable prices.   We are also seeing investors start to re-enter the market and quietly pick up investment properties at favorable prices.   Southern and Central Marin are the strongest markets and Novato is lagging, but even in Novato with the right price and preparation we see some multiple offers.  Sonoma County is still lagging.  

This is not to say that we are headed into boom times, but the Marin market is seeing more activity and buyers are on the move.   January was slow, but February is markedly different. The new rules regarding Jumbo loans will also bring more activity into the market in the next few weeks.   For those who are waiting for the “bottom” of the market, you will know it when it is past.  The time to buy is before the buyers have flooded back in to the market.  By the time it is obvious that inventory is being taken off the shelf faster, you have missed the bottom.  So my advice to serious buyer is to start paying attention.    I have heard buyers say “we’re in a recession and I think prices will go down another 5% - to 10%; I’ll wait.”  Let me make two points on that front:

1)       Not all markets in Marin are going down, some are appreciating:  median price is up 3.5% from Jan ’07 to Jan 08’.  The lowest end of the market is indeed hard hit ($300,000-$700,000) due to first time buyers who relied on creative loans and low down payments.  The midrange ($800,000 - $1mil) has seen some softening but is getting more activity.  The $1million to $3 million range is very healthy and competitive if the property is desirable.

2)       For those markets that are still soft, let’s say that you wait a year to buy hoping for a 5% to 10% decrease in price.  When the recession ends interest rates will go up.  The example below was brought to my attention yesterday, suggesting that buyers are taking a risk by assuming they will save more money later:

For those who would be in the Jumbo loan category, I think that the coming weeks will flesh out lower rates to take advantage of.  So, potential sellers get ready to put your house on the market before the flood inventory of late spring.  Potential buyers, get your pre-approvals in order and start to look seriously.  That is my best advice.  I don’t say this to cause you to do something you are not ready for.   I provide this information so that you are as informed as you can be.  You will make your own decision as to what is right for you in your own time.

For those who are interested in real estate statistics, Marin County has released January statistics compared to January of ’07.  As I said above, number of units sold was down from last January.  However, average sales price has ticked up slightly.   Marin is not one market; it is town, neighborhood, and house specific.

Total number of properties sold in January of ’07 = 148, Median Price = $869,000.   Total number of properties sold in January of ’08 = 98, Median Price = $900,000.  Median price is up 3.5% over all.

My job is to provide information and counsel, and to be there when you need me.   I hope to help you through these confusing times with the best information available.