November 5, 2005
THE REAL (ESTATE) STORY
By Larry Underhill
OWNER/BROKER
By Larry Underhill
OWNER/BROKER
GOING DOWN? Nobody should be surprised that home prices are finally settling a bit. It’s as inevitable as the changing of the seasons! The mad surge in property values HAD to find a topping-out point somewhere.
THE INTERESTING THING is to look at trends in home prices over several decades. A graph of home prices over twenty or thirty years looks like a wavy stairway, always trending upward with leveling-off or declining periods punctuating the ever-rising line. The overriding trend is ever-upward.
"THE MAJORITY is almost never right." So said a feller named Toynbee many years ago. The herd instinct isn’t limited to the stock market. When the real estate market reaches the top of its cycle and begins to level off or decline a bit, many folks jump into the market in a panic, afraid that they’ll lose their recent gain in appreciation. The glut of inventory then further exacerbates (a big word for me!) the softening of real estate prices. The market shifts from a Seller’s Market (Very little home inventory, lots of Buyers) to a Buyer’s Market (Very few Buyers, lots of homes for sale). It has always been thus.
We’re in the beginning stages of a Buyer’s Market. Home inventory in the Lodi area has nearly tripled in the last four months. So what? The value of your home only matters if you’re selling. If you’re in this home-owning thing for the long haul, relax and enjoy the ride. The home-value pendulum will swing the other way in the future. The number of homes built in California falls short of the number of new Californians by TENS OF THOUSANDS OF PEOPLE every year! Demand will once again outstrip supply in the future, which will once again drive home prices higher…and the cycle will continue.
You can read old newspaper articles decrying the exorbitant home prices…of 1946! Ten thousand dollars for a new Lodi home? Outrageous! In the short term, 2005 prices will mark the top of the current home-value cycle. However, not too many years from now, people will look back with longing on the home prices of 2005.
OPEN TODAY! Back by popular demand! Statesman’s own John Manguso will hold the following homes open this afternoon:
OPEN TODAY 12 TO 2 P.M.: 723 East Century Place has a contingent offer on it, but it’s still for sale! At $339,950, you’d better hurry! Three bedrooms, two baths, two-car garage, central heat and air, and easy-car front and back yards. Many varieties of roses! A genuine Grandma takes very good care of this place.
OPEN TODAY 2:30 TO 4:30 P.M.: Just REDUCED in price! 2100 Corbin Lane is a tastefully-remodeled Westside beauty with new 30-year composition roof! You’ll find loads of newly-upgraded features here, everything from new ceiling fans in all bedrooms to new wood-look blinds on the windows to new kitchen tile and appliances! This 1300-square-foot three-bedroom two-bath is a value at the new price of $369,950! Vinewood Schools, too!
REALITY: I just listed AND sold one of my rental homes (I’m exchanging into another rental). I priced it ten thousand dollars below the most recent comparable sale. Buyers showed up. Funny how that happens! In a soft market when the whole world is for sale, ya gotta get UNDER the market if you hope to attract one of those scarce Buyer-type people! Different markets call for different strategies. Have a great week! See you next Sat.
THE INTERESTING THING is to look at trends in home prices over several decades. A graph of home prices over twenty or thirty years looks like a wavy stairway, always trending upward with leveling-off or declining periods punctuating the ever-rising line. The overriding trend is ever-upward.
"THE MAJORITY is almost never right." So said a feller named Toynbee many years ago. The herd instinct isn’t limited to the stock market. When the real estate market reaches the top of its cycle and begins to level off or decline a bit, many folks jump into the market in a panic, afraid that they’ll lose their recent gain in appreciation. The glut of inventory then further exacerbates (a big word for me!) the softening of real estate prices. The market shifts from a Seller’s Market (Very little home inventory, lots of Buyers) to a Buyer’s Market (Very few Buyers, lots of homes for sale). It has always been thus.
We’re in the beginning stages of a Buyer’s Market. Home inventory in the Lodi area has nearly tripled in the last four months. So what? The value of your home only matters if you’re selling. If you’re in this home-owning thing for the long haul, relax and enjoy the ride. The home-value pendulum will swing the other way in the future. The number of homes built in California falls short of the number of new Californians by TENS OF THOUSANDS OF PEOPLE every year! Demand will once again outstrip supply in the future, which will once again drive home prices higher…and the cycle will continue.
You can read old newspaper articles decrying the exorbitant home prices…of 1946! Ten thousand dollars for a new Lodi home? Outrageous! In the short term, 2005 prices will mark the top of the current home-value cycle. However, not too many years from now, people will look back with longing on the home prices of 2005.
OPEN TODAY! Back by popular demand! Statesman’s own John Manguso will hold the following homes open this afternoon:
OPEN TODAY 12 TO 2 P.M.: 723 East Century Place has a contingent offer on it, but it’s still for sale! At $339,950, you’d better hurry! Three bedrooms, two baths, two-car garage, central heat and air, and easy-car front and back yards. Many varieties of roses! A genuine Grandma takes very good care of this place.
OPEN TODAY 2:30 TO 4:30 P.M.: Just REDUCED in price! 2100 Corbin Lane is a tastefully-remodeled Westside beauty with new 30-year composition roof! You’ll find loads of newly-upgraded features here, everything from new ceiling fans in all bedrooms to new wood-look blinds on the windows to new kitchen tile and appliances! This 1300-square-foot three-bedroom two-bath is a value at the new price of $369,950! Vinewood Schools, too!
REALITY: I just listed AND sold one of my rental homes (I’m exchanging into another rental). I priced it ten thousand dollars below the most recent comparable sale. Buyers showed up. Funny how that happens! In a soft market when the whole world is for sale, ya gotta get UNDER the market if you hope to attract one of those scarce Buyer-type people! Different markets call for different strategies. Have a great week! See you next Sat.
Statesman Realty
(209) 333 23801
(209) 333 23801
800-407-SOLD (7653)
Website: www.larrysellslodi.com
Website: www.larrysellslodi.com
Website: www.larryunderhill.com
Email: Larry@LarryUnderhill.com
Email: Larry@LarryUnderhill.com
posted by Larry Underhill at 14:39
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