Everyone wants to know how the Palos Verdes real estate market is doing. I am an optimist by nature so I have to check for facts before I give my opinion. Currently we have 32 properties that have sold/closed escrow since the first of the year compared to 23 properties this same time period in 2008. Additionally, there are currently 42 properties in escrow. So the Palos Verdes real estate market is moving forward. Prices are definitely down though compared to 2008.
How will our market fare in 2009? Leslie Appleton Young, Chief Economist for California Association of Realtors, gave her forecast last week (can be accessed by clicking here). Bottom line is that she thinks number of sales will go up and prices will go down. In high end markets (like Palos Verdes), she is forecasting a double digit decline based on the economy, financial markets and decrease in trickle-up buyers from low-end properties (with high foreclosure rates) to mid-range properties to high-end properties.
For Sellers, this means pricing is key to getting your home sold. Accurately pricing a home continues to be the number one factor to conclude a successful sale. 67% of all buyers in 2008 stated that “price decreases motivated us” to purchase a home according to the above referenced Market Forecast. If the forecast is correct, now is a good time to sell before further price decreases.
For Buyers, this means that your time is now. When you sell your existing home and receive less, it will be more than offset by the savings on your up-leg property when you buy. Interests rates are at historic lows – less than 5% for conforming loans and 6.25% for jumbo loans. If you purchase before the Spring, you will experience less competition from other buyers when negotiating price on your new home. Part of the Stimulus Plan if passed by Congress includes a tax credit for buyers (stay tuned for those results).
