Mission De Los Arroyos Report Archive - July 2006

Real Estate Market Coming in for Soft Landing?

To read the newspapers, you might think the real estate market was going down the tubes. Without a doubt, things have slowed down considerably from last year's unprecedented hot market. That could have been a once-in-a-lifetime event. Thinking back to that time, you might recall newspapers were writing headlines such as "The Forthcoming Burst of The Real Estate Bubble." 

Were we in a bubble? Did the bubble burst as predicted? In my opinion, what we're seeing is a market correction coming in for a soft landing. Interest rates are still low; there are still buyers (albeit many of them may be elsewhere this time of the year); and people are still moving to the valley at the rate of 160,000 per year.

Homes priced at fair market value are still selling. However, a number of buyers priced their homes last year based on the expectation of a continuation in rising prices - and prices leveled off instead. The chart below illustrates the difference between asking prices and selling prices over the past year.

Do you want to sell your home? If so, price it right and the buyers and their agents will find you.