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Random thoughts as the 2009 Real Estate Market comes to an end…

As 2009 is coming to an end we have experienced many changes in the market. The beginning of the year my clients had plenty of bank owned foreclosures to choose from. We would put an offer in less than asking price and in a few days we were in escrow. These homes were perfect for the first time home buyer who wanted to close escrow in 30 days and take advantage of the $8000 tax credit.

By late spring or early summer the foreclosure market had dried up. Lenders were foreclosing on homeowners at a much slower pace because of new government regulations and because by flooding the market with to many foreclosures the housing prices were dropping. Foreclosures now seem to be coming on the market drop by drop instead of in a flood. Home prices appear to be flattening out or at least dropping at a much slower pace.

First time homebuyers flooded the market this year because of the low price of homes combined with the $8000 tax credit. The credit was set to expire at the end of November but congress extended it to April 2010, and also opened up a $6500 tax credit for existing homeowners.

Investors also have come back into the market. The investors are buying houses at auction, buying in large pools of homes from HUD and other entities, as well as competing directly with first time home buyers and offering cash.

As the year ends the market appears to be one primarily made up of first time home buyers and investors competing to purchase short sales (homes the lender allows the owner to sell for less that they owe on it). There is a significant supply of short sale homes on the market and if you have the time and patience you can get a good price on one of these homes. It usually takes 2-3 months for a lender to approve an offer on a short sale. Almost every listing I have received the past 6 months was from homeowners who were upside down and wanted me to short sale their home. I am happy to say that we have had a great deal of success selling these homes.

I guess the bottom line as the year comes to an end is that there are a lot of opportunities in the market for first time home buyers, investors, or anyone who is willing to take the time to see what options are available to them.

Jim