How Will You Know?
One of the founders of Keller Williams Realty, Gary Keller, often poses the question "How will you know if the market is getting better?"
Of course the main answer to this question is prices will start to go up and inventory will start to drop. And then it is too late - you will realize that you did not buy at the lowest possible price point. This proves that trying to time the market is pretty tricky business. No one can really be sure until it has already happened. This suggests a scenario a little like the Saturday night live skit where the fortune teller is predicting things that have already occurred.
Recent statistics on the state of the Real Real Estate Market in the Coachella Valley (Palm Springs) seem to show that we are leveling if not already turning around and heading in the opposite direction.
- The Median home price has held since January (almost 6 months now)
- Sales, the number of homes sold, has gone up every month since July 2008
- Inventory has dropped from 8,188 properties available in January to 6,801 in May
These numbers suggest that if not full recovery there is at least significant improvements. You can pretty much expect to compete fiercely for the under $200K homes in most parts of the valley. There are lots of cash buyers and many are now sold within hours of hitting the market. Despite that fact there are still market segments that are hurting and where deals can still be had. The opportunity has not been missed and may - at least for the short term future actually be getting better. This segment is the mid luxury to luxury home. Homes priced in that $550-1,000,000K range. Though that may sound like big money and certainly no bargain what you will find is that in this market segment you are seeing amazing price reductions. Homes that are really worth 900K are selling for low 700K prices even down into the mid 600K range. That, when you think about it, is an astounding value! Large lots, big homes all the bells and whistles available for 200K less ( or more) than you would have paid two years ago.
In the end it is best not to lose sight of the fact that the real money is made when you buy your properties. Buying at the right price - a good price is always going to be the strongest factor in the eventual profit you make when you sell. Analyze the opportunities out there now carefully. Buying right has rarely been this easy.