What in the world…? Yes I think many unsuccessful home buyers feel kind of bitter right now. Many in Orange County and Laguna Niguel specifically were beaten out of buying a home this spring by cash buyers or high money down buyers. Rapid price increased were taking place for sure and the obvious choice for sellers was the cash buyer who didn’t require an appraisal or loan approval.
I know of many buyers who became fed up with the wild market and renewed their rental contracts for another year. My advice is to keep a long term perspective. What will the interest rates be like a year from now if the Fed really backs off their current policy which artificially keeps rates low? If the rates go up another point your purchase price target goes down another ten percent. Will the home prices really drop ten percent to compensate? Maybe, but most all home buyers who have bought in the last six years were well qualified buyers or even cash so they can hold out. I believe the price levels we are at right now are definitely sustainable. So if you are a buyer take the long term look at the market. You will likely be in your new home for seven to ten years or more and you will look back and think what an awesome interest rate you got – not to mention the tax deduction you have enjoyed.
All that being said, be patient as well because many of the homes on the market right now are a bit over-priced. Some of those sellers will pull their home off the market but many will “get real” and price accordingly if the proper motivation is in place. Always have your agent do a market analysis and see what the real value is because multiple offers are still possible if the home is priced right. In Laguna Niguel in the past 10 days I have seen multiple offer situations on more than one home listed in the 800’s. Many lower priced homes are sitting because they are just a little over priced.
In my experience August is the slowest real estate month of the year and this August lived up to that. I will go out on a limb and say that the home buyers are coming back right now and the next 60 days will be a busy time.