Buyers Are Still Trying To Time The Bottom In East Bay Real Estate!

The Sellers need to price accordingly and calculate holding costs.
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The East Bay real estate buyers may be playing a dangerous game in their attempt to time the bottom of the real estate market. From the statistics of 2007 the East Bay real estate market above $1 million has not had much of a decline in pricing. From a Sellers point of view of this price point, the Buyers are not as much in the driver’s seat as they may think. This is the biggest market opportunity for Sellers getting close to their price in 2008.
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When you are talking about the $600,000+ price point in East Bay real estate, it is a completely different story. WOW! What a mess for the Buyers who leveraged their mortgages with 100% or 95% mortgages. The market has corrected in this price point, big time. All you need to do is take a look at East Contra Costa and Alameda counties. The price corrections are causing Sellers to stop making payments on their mortgages because there is no reason for them to throw good money away at a selling price that will not payoff their mortgages.
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If a Seller in the $600,000 price range who is in trouble with their mortgage wants to sell their home FAST, they need to look at the lowest third of the price points in their slice of the market and get their homes priced there immediately! They will not get a sales contract on their home if they are not willing to take the PLUNGE. If you are speaking with any of these Buyers, just blame me for the suggestion I just made.
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Another very effective strategy for Sellers in this market is to offer a “buy down” of the interest rate for the Buyer. What his means is that the Seller would be willing to pay a 1% fee of the loan amount that the Buyer qualifies for in order to lower the Buyer’s interest rate. For example, if the loan amount was $600,000, the Seller would credit $6,000 towards the buy down of the interest rate. This has a dramatic effect on the amount of the Buyer’s monthly payment. This may end up being the key feature of the sale of the home that allows the Buyer to afford to actually buy it.
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We must get our creative juices flowing with “out of the box” ideas in order to stimulate the sale of homes instead of just having over priced homes sit on the market for months. It doesn’t serve the Sellers or the Buyers if creative solutions are not created for our East Bay real estate customers. Contact me if you want to discuss any of these ideas further. Until next time….