Since there are always buyers in a market, at some point values will decline, to entice buyers to buy. As values continue to decline they reach prices that become more affordable to some and less of a risk to investors. So the number of potential buyers increase.
I was just talking to a co-worker today. She lives in Empire Ranch up by the new grade school & Madrone condo's. She said there is now only 2 original families in that immediate neighborhood, every other house has been sold & the majority is occupied by renters. That neighborhood, from what I can tell, was the most recently built "affordable homes" starting at $400K. Now, selling at approximately $275K.
What part of values continuing to decline don't you get? This isn't positive news for anyone, unless you are a buyer
As a buyer, newer SFH are on the edge of affordable, especially if one is prudent and won't go over their budget. I was out driving around tonight, again, through some of the high-density developments. Home ownership in Folsom is not enough to entice me to buy in one of these communities (I hope that comment doesn't come back to bite me).
That absolutely is positive news for everyone. The first step towards increasing home values is less homes available on the market which creates more competition. The lower the number of homes on the market is the stronger the market will be. At least we are finally seeing strong signs that step has been reached.
Actually, that's positive news for sellers & owners, but not buyers. And frankly, it sucks for buyers.
The rate at which they are dropping is becoming lower and lower. The lowest median home price bottomed out in October of 2010. Will we drop below that in the future? Possibly, but we are coming up at the one year point without prices going back that low again. That is positive.
Sacramento bottomed out in January of 2010 and now has gone 1.5 years without going that low again. That appears to show that Folsom is behind the curve.
Home prices are not increasing by any meaningful amount in either city, but they are not dropping year over year at this point.
I think Robert has brought up some very valid points, and granted the affects have not been felt as severely as in other Sacramento region cities, yet, as rpo mentions.
I can tell you as a buyer, and I'm looking only in Folsom, the SFH's in the low 200,000 in the newer sections of town are in a sorry state of disrepair (I'm not looking in the older section because the yards are too big). Not only do they need a cometic overhaul, but many will need some significant structural repairs as well for water or mold damage, just to make the place inhabitable. I was concerned about the article in Sac Bee yesterday about investors only making cosmetic but not structural fixes, so now I will have to steer clear of those homes too.
http://www.sacbee.com/2011/06/12/3694096/real-estate-scavengers-flip-foreclosed.htmlThen there is the sweet spot price range that Steve has mentioned, mid-200's to low 300's...these homes are now receiving multiple offers. And most likely will push the price up further - again, good for owners & sellers, but not buyers.
I really don't understand this submit your best & final price by 5 pm mentality, vs a seller looking at each option & treating each offer individually via the realtor. That's how it was done in the old days just a few years ago...or at least how we did it. This sounds more like "speed home" sales (like speed dating I've heard about). And a way to increase the amount of the offer. It's like a blind poker game with a heck of a lot of money in your hand.
This makes me really tired.
It's not nearly as exciting as it once was.