Telecom layoffs in the Plano/Richardson area of Dallas continue and foreclosures are up as 401K's are running out. Tell me that these people won't deal to avoid foreclosure, then say that it's not a buyers market.
Technology, engineering and telecomm have had their fair share of "hits" in our city and several recent assignments I have done in neighborhoods close to these business locations have many more 4-sale signs and lots of examples of folks having entered the new "selling season" back in Feb./Mar./April with first list prices too high to find favor with buyers. One can see the list expirations, and new ones to follow that same or next day, and a whole string of price reductions before they finally contracted and sold. Database views for 3 or 6-month time blocks over last year+ show average prices staying "stable" or clearly "declining". I don't have any trouble stating those discoveries in the market description section and addendum if needed. Builders are offering better "package deals" to keep their projects chugging till that last designated lot can be improved. Checking off that form box for "increasing" is not always now taken for granted as we observe market evolution.
In my small market that has dropped from over 350 residential sales of all types per year to less than 325 (that is a big drop here), just did a study of the number of trustee sales advertised versus the number of closed sales. There were 94 residential sales of all types between 7/3/02 and 10/23/02 and 41 residential properties trustee sales advertised. Some of those trustee sales will be redeemed by the property owner before the final foreclosure. But that still is a very large percentage. Any suggestions on how to describe a declining market? Appreciation has been nil or almost nil for about four years also. So am I expressing a value when a client calls with a sky high estimate and I tell them this is an area of very low or no appreciation--so whatever the home sold for or was appraised for (by a local appraiser--not an appraiser from 125 miles away or a realtor) in the past 3-4 years is probably the upper limit today unless there has been extensive physical changes to the subject??? I am trying to get out of accepting an order that is not going to go anywhere. Here, our problem is the slowdown in the copper industry as the price of copper keeps dropping.
Here's a tip on determining whether a market is beginning to decline. Look not at the upper level properties or the entry level properties, but rather at the mid-level properties. These properties are the move-up homes, often relatively new, in nicer subdivisions. If you see a significantly higher number of homes for sale, unusual concessions, and lower sales prices, coupled with builders of these homes giving significant price breaks, you have the beginnings of a down market. The reason is that the people with money will buy or hang onto the high dollar homes, and the entry level homes are where the people in the mid-market are going back to.
I remember buying our first home in Colorado in early 1980. My husband and I were only 22 years old at the time 8O . The market was stable to declining until about 1993, then the growth boom slowly started taking off. For about 13 years my home was worth no more than I paid for it, and had I tried to sell it through an agent I would have had to bring money to the closing table. We rented it out for the last 7 years that we owned it because we couldn't afford to sell it!
Funny thing is that when I try to explain this not-so-long-ago crappy market, most people currently living in Colorado simply do not want to believe that it could ever happen again. They seem incapable of grasping the concept of buying a home as a place to live that may eventually be paid off, rather than a fast cash generating investment. :roll:
Buried in about 4" of snow...and it's still coming down.