Reports are in and here are the main points:
1. Sales Decline Year Over Year
2. Inventory is Up
3. Existing Home Sales are Down
Out of context and as a collection, this information seems absolutely frightening. However, this is spring boarding off of what I was saying last week. The data isn't demonstrating a correction. What it's demonstrating is a tapering. If we've had 6-7% year over year growth, we ought to expect growth, but a slower rate of growth.
What does this mean for current sellers? If you're serious about selling, find the market. Buyers are being very easily spooked and very quick to walk away from a property and to move on to the next. This becomes especially apparent with the increase in inventory. This market requires more finesse on the part of the seller.
What about buyers? Don't be afraid to put pen to paper and to write an offer. Give the sellers an opportunity to talk to you and to entertain an offer. Like I said last week, don't let the seller drop the price and create a bidding war. Get rewarded for trying.
Last group, investors? Look at 5+ units. Why? Your appreciation play on whatever property you choose to purchase is limited or decreased. Apartment buildings or 5+ units, typically trade based on income and not the value of the building or the dirt. Appreciation is irrelevant. The rental income reigns supreme. If there is a property where you can add value such that you can significantly increase the rent on top of the already performing cap rate, slam dunk.
I'm not going to lie, I'm a little unsure about the repercussions of everyone recognizing this tapering. I say this in part because I still have plenty of buyers. Some are first time home buyers who want to buy their first home. Some are in the middle of a 1031 exchange. Some are just downsizing. I think this is the "you do you" market. People are going to have the opportunity to do what they want because it works for them. However, they will need to flex to the market. Power to the people not the market!!!
Check out more info in the links below:
Bay Area Sales Inventory is Up Comments on June Housing Sales Existing Home Sales Decline
1. Sales Decline Year Over Year
2. Inventory is Up
3. Existing Home Sales are Down
Out of context and as a collection, this information seems absolutely frightening. However, this is spring boarding off of what I was saying last week. The data isn't demonstrating a correction. What it's demonstrating is a tapering. If we've had 6-7% year over year growth, we ought to expect growth, but a slower rate of growth.
What does this mean for current sellers? If you're serious about selling, find the market. Buyers are being very easily spooked and very quick to walk away from a property and to move on to the next. This becomes especially apparent with the increase in inventory. This market requires more finesse on the part of the seller.
What about buyers? Don't be afraid to put pen to paper and to write an offer. Give the sellers an opportunity to talk to you and to entertain an offer. Like I said last week, don't let the seller drop the price and create a bidding war. Get rewarded for trying.
Last group, investors? Look at 5+ units. Why? Your appreciation play on whatever property you choose to purchase is limited or decreased. Apartment buildings or 5+ units, typically trade based on income and not the value of the building or the dirt. Appreciation is irrelevant. The rental income reigns supreme. If there is a property where you can add value such that you can significantly increase the rent on top of the already performing cap rate, slam dunk.
I'm not going to lie, I'm a little unsure about the repercussions of everyone recognizing this tapering. I say this in part because I still have plenty of buyers. Some are first time home buyers who want to buy their first home. Some are in the middle of a 1031 exchange. Some are just downsizing. I think this is the "you do you" market. People are going to have the opportunity to do what they want because it works for them. However, they will need to flex to the market. Power to the people not the market!!!
Check out more info in the links below:
Bay Area Sales Inventory is Up Comments on June Housing Sales Existing Home Sales Decline
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