Market activity for January and February was up significantly from the prior quarter. Inventory is down, buyer activity is increasing and homes are going under contract. On the numbers, sales have doubled so far this quarter, but the last quarter of 2008 was pretty abysmal. There were only 7 sales over the months of October–December. By contrast, there were 14 Chester properties with contracts pending for January and February 2009 alone. Interest rates will be a significant driving force for March sales. Rates near 5% for 30-year fixed mortgages are too good for committed buyers to resist.
The local market has taken quite a hit over the past year. For the first 4 months of 2008, Chester home sale prices averaged 88% of assessed value. With warmer weather, prices and contract activity improved, moving up to 92% of assessment from April—July. However, with turmoil in the financial markets, prices steadily declined through the 4th quarter as homes closed at an average of only 85% of their assessment. To keep perspective, remember that our
homes were reassessed after a 10 year rise — the steepest rise in prices the market has ever seen. Your assessment is the value associated with that 2005-2006 market —the tip top.
Before you lament holding on to this ‘declining’ asset, consider what might have happened if you HAD sold at the peak, say 2005 into 2006. Since most of us need a place to live, the chances are you would have ‘overpaid’ for your next house as well. Buy low, sell high is great advice, but where do you live in between? Consider too that a home is more than an asset, it’s a quality of life investment. What’s your home worth in terms of your lifestyle?
The coming Spring market offers a real buy-up opportunity for Chester. Homes valued between $800K and $1.4 million are pricing at 80% - 85% of assessment, while lower valued homes are still hitting prices of 90% or above. Right now, you can get a lot more square footage for not so
much more money. There is also a broad array of homes to choose from and time for reflection that you won’t get in an upward moving market. Today, the process moves at a much more relaxed pace.
Buyers are out, testing the waters and, yes, buying. Interest rates are even better than a year ago and the well-informed know the conditions are right. Jeffrey Otteau of Otteau Valuation Group, appraiser and real estate statistician says, “Look for a gentle ‘Spring Surge’ in home sales to occur if mortgage rates fall and remain below 4.75% by the end of March”. To catch that surge, it’s time to prepare now.
Here’s a short list of recommendations if you are considering a move.
·Renew/Repair — your home. The best condition gets the best buyers.
·Research — the market activity and trends before you think price.
·Reality Check — forget what you could have gotten back in 2005. It’s over. Think of what you can buy!
·REALTOR® — get the advice of an expert and follow it. Would you go to court without an attorney? Get an x- ray without a technician? Don’t gamble your most valuable asset.
·Remember me — whenever you, your friends or family need real estate advice.
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