Balancing Act: Timing Is Everything

seesaw.jpgI always seem to be a day late and a dollar short, although thankfully my mortgage isn’t resetting anytime soon and there is no chance of foreclosure in my future. But we did wait just a bit too long to sell. We have many friends who were wiser, particularly those closer to retirement age, that were able to sell their homes at the height of the market and buy down into smaller homes, sometime out of the area. They have a pretty little nest egg to keep them comfortable for a long while. Our goal had been to do that next year, but now we have decided to hang on, do some remodeling, and wait for a more stable market. At least that is our decision this week. Another good example of poor timing is our mortgage. Right now mortgage rates are lower than they have been in 6 months, according to some sources. Perfect time to refi. But thanks to corporate layoffs, we only have one income right now, and would not qualify. So we will have to wait, and probably miss that boat, too.

I mention this only because prices have been on a downward spiral and mortgages are low, with no guarantee they will go lower. It may very well be the time when the see-saw is at an even point, not tilted toward low prices on one side, or low mortgage rates on the other. And even better, is that sellers seem to be waking up to the smell of coffee and getting more realistic quicker about price cuts. Yesterday, on the corporate Redfin site, there was a blog post by intrepid leader Glenn Klelman, singing the praises of Jeff Yee, who did an extensive survey on price reductions.

Jeff looked at all the active listings (MLS, REOs, FSBOs) in all the markets that Redfin covers. The good news, according to the post: What he found: 38% of currently active listings have undergone a price reduction at some point since going on the market. But it was the average magnitude of the drop from the original list price that shocked everyone here: 10.7%.

So, low prices, low mortgage rates, realistic sellers—this is a good combo for buyers right now.

  • Joel

    …except the price will most likely go even lower.

    The optimists are predicting that it will bottom in 6-9 months, but it may drag for years.

    And needless to say, price trumps rates since one can always refi.

  • Lily

    low prices but not low enough for average income to afford payment, maybe just to get by.

  • Bob

    The key perspective we should consider moreso is within each neighborhood. Prices have adjusted more significantly in Escondido, whereas not as much in Rancho Bernardo. A statement that we are ‘done’ adjusting may be premature if we’re not looking at micromarkets and instead are averaging regional adjustments.

    True, prices are lower relative to where they were. But they went up a loooooong way. Current RB/Poway prices are still too high for the average buyer.

  • http://sfbay.redfin.com/blog/author/susan.brady susan.brady

    Thanks for all your input – good info all around.