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DECLINING MARKET - BUYER’S MARKET

The rub comes in when you are in a Declining Market. If you err on the high side, the home never sells because it is always overpriced. Even if you price it correctly, if it doesn’t sell immediately then your home becomes over priced and doesn’t sell.

Let’s take the same example. A similar home closed this week for $790,000 and had a 30 day escrow. The current market value of your home is $780,000 because it has declined $10,000 during the month. So if you price your home at $780,000 and it doesn’t sell right away then you are over priced and need to reduce your price $10,000 every month until it sells. Obviously if your home sits on the market for 5 months you may be lucky to get $740,000 for it. Other factors which come in to play in a Declining Market are fewer buyers and more homes for sale – supply is high and demand is low. So it becomes even more important to price you home properly.

It may be best to offer your home at $20,000 under market value to attract potential buyers and get a quick sale. There is a price where everyone says to themselves, “That’s a no brainer! We’ll buy it.” Everyone wins. The seller minimizes their potential loss and the buyer gets a good buy. REALTORS® will steer their clients to the best buys available. So if you under price your home by $30,000 then you have a good chance of selling it within 3 months. At the end of 3 months, you will need to reduce the price yet again.

Naturally, we want to predict when this declining market will end, level off, and start back up. If we feel it is going to be of short duration then we may want to hold off on reducing our price. If it looks like it is going to persist then we may want to get aggressive in our pricing. Recent events have made it very difficult for REALTORS® and Sellers in determining the proper course of action.

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RISING MARKET – SELLER’S MARKET

Sellers and REALTORS® have had it easy pricing property over the last 6 years. Look up comparable properties that have recently sold and add $10,000-$20,000.

In the example below let’s suppose the comparable property for your home just closed escrow at $790,000. It was a 30 day escrow so today’s current market value of your home should be $800,000 because prices have been rising at $10,000 per month.

So if you price your home at $840,000 then it should sell within 5-6 months. On the 5^th month it should be at current market value and on the 6^th month under current market value. The beauty of this market is that you can err a bit on the high side and everyone is happy.

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Congratulations to Bob Lyon, the new Honorary Mayor of Cayucos. His lovely wife Shirley won the auction with a bid of $1,350.

Thank you Shirley, and thank you Bob for serving our community!

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With long stretches of sandy beach, little crime, a population of 3,000, and only one main street of businesses, you might think being the Mayor of Cayucos is, well, a day at the beach.

But governing this beautiful, coastal town is hard work. Very hard work. It requires riding on a float in the 4th of July parade, waving at children and tourists, viewing sand sculptures on the beach, enjoying good music, chatting with fine folks, eating tasty bar-b-que, and watching the fireworks off the pier after sunset. Yes, being Mayor of Cayucos is exhausting work.

If your political ambitions are less than capitol, then you will want to mark tomorrow, Saturday, May 27th on your calendar because the Chamber of Commerce is putting the office of (honorary) Mayor of Cayucos on the auction block at their annual May Madness Fireworks Fundraiser at the Cayucos Vet’s Hall. Tickets to the May Madness fundraiser are $150 per couple and may be purchased at the Cayucos Chamber Office at 158 N Ocean Avenue in Cayucos (995-1200) or at the Vet’s Hall door.

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Even the worst fixer upper will sell at the right price.

Despite 6% dips in Morro Bay and Los Osos, Cayucos values have remain level. The reason for this may be that prices in Cayucos move in stair steps while the price line of all the other cities on the coast have a uniform slope. So while prices may level off for awhile in Cayucos, I don’t expect them to drop much unless this nation wide downturn is sustained for a while longer.

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My daughter Jenni has spent many hours setting up this blog for me. I hope you enjoy it, and I hope to start writing regular columns about the local real estate market very soon. I’ll post notes about my family and hobbies, too.

As I am the president of the Cayucos Chamber of Commerce, I will also post announcements for the Chamber.

-Breck

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