Nicole Machado

Is history repeating itself?
August 3, 2009 ·  

In recent months the entry level Real Estate market has shifted and become for some people, a competitive sport. If priced correctly homes aren’t lasting past the first week’s open house as buyers are frantically racing to submit offers. Supply is low and demand is high and we all know with that combination multiple offers arise. What’s good for the goose isn’t necassarily good for the gander.. is history repeating itself? Is what is occuring now exactly what we saw a few years ago when home prices soared and multiple offers were just expected? There are many factors that come into play, some may argue this market is nothing like the one we saw a few years ago. We can say for sure banks have tightened up their guidelines to put it gently. Unless you can prove you qualify, you don’t get approved.   Interest rates are lower and home prices have dropped so buyers in today’s market essentially have more buying power.  Appraisals have been tightened and often times more then one is necessary to get approved by the lender.  With that said, is it really all that different?  Are consumers so eager to purchase a home for fear they will “miss the boat” that they are over extending themselves to make it happen. Hopefully with the tightened lender guidelines, history won’t repeat itself. What are your thoughts as I would love to hear them…

Nicole Machado           www.mve2day.com

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Comments

8 Responses to “Is history repeating itself?”

  1. Jonathan Shaw on August 3rd, 2009 4:04 pm

    Hi Nicole,

    Great synopsis of what is going on in the market there in San Bruno and surrounding areas. I do believe that there are 2 factors that will make this time different. The first you mentioned, lender guidelines. But the 2nd is the state of the economy where people are still a little gunshy that we aren’t out of the woods yet. Nice job!

    Jonathan

  2. Alan C Pursell on August 3rd, 2009 5:19 pm

    Nicole,
    I beleive the market is better than ever. I think it has corrected itself. Supply is low only because rampent speculation is gone, or at least diminished. Sellers seem to be only selling for the real (natural) reasons…job transfer, downsizing, retiring, etc…not just to make a quick buck. And buyers are real (natural) buyers. Folks who have qualified for loans they can afford and who have the 20% down in the bank.
    This is the environment we need…stability.

  3. Dean Rizzi on August 3rd, 2009 10:22 pm

    Good points Nicole. Buyers won’t be able to over extend themselves as easily as they did a few years ago… lenders are actually qualifying borrowers for homes today… imagine that.

  4. Brian Boisson on August 4th, 2009 9:05 am

    Hi Nicole,

    Thanks for the interesting observations.

    You asked for people’s thoughts here are a few of mine.

    In our part of the world, we have always had a unique market, and a very desirable product to sell.

    Many people are seeing the strong value in our lower priced market areas and jumping at the opportunity of it (not unlike the huge success of the cars for clunkers program for automobiles) Pent-up demand is at work too.

    And although there is high unemployment in the country, our area is less than the state and national average which means nine out of ten people are working here, many with great jobs that support a mortgage.

    I just think the people who are serious (and the smart people that advise them) are realizing the perfect storm of our marketplace and jumping at the chance to buy a home here today.

    Thanks again,

    Brian

  5. Larry Franzella on August 4th, 2009 9:15 am

    We are definately seeing multiple offers and homes especially at the entry level selling way over asking prices.

  6. Shokoofeh Nowbakht on August 5th, 2009 11:29 am

    Nicole, I have been experiencing the same. I see multiple offers and over asking price in every offer I am writing for my clients.

  7. Karin Cunningham on August 6th, 2009 2:19 pm

    This is a great post, Nicole! I am going to send it to some of my contacts so they hear this from another resource!

  8. Adam Chinn on August 16th, 2009 12:52 pm

    Great Post Nicole,
    I have been experiencing the same thing. My clients are writing and in most cases there are multiple offers over asking. I think Dean brought up a great point, lenders are actually qualifying borrowers.

    The market has definitely changed with the lower amount of inventory you mentioned, about half of what it was last year at the same time, while sales in contract are up about 50% in Daly City.

    As Brian mentioned, people are realizing the perfect storm and are jumping into the market place. Although I hear the news of people losing their jobs and unemployment being high it sure does not feel like that when my clients are writing offers, competing with so many others.

    Thanks again for the post,

    Adam

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