Are You Timing the Market?

Have you been wondering when the Frederick real estate market would hit bottom, or what we call timing the market?  While none of us have a crystal ball, we follow the market statistics closely, and we're seeing a shift here in Frederick.

The end of the summer saw huge jumps in sales numbers for many areas of the country.  Southern California saw a 65% increase in sales this September over last Sept., and 51% of those sales were foreclosed properties.  This is one time when I hope the saying is true:  The trends start in California, then spread to the rest of us.

I'm glad to say that Frederick experienced a boost in sales at the end of the summer in several Frederick Communities, including New Market, Walkersville, Middletown, (sales were up a whopping 172%!)  Brunswick, and 2 zip codes of Frederick City.  County-wide, sales were up 15%. 

That's good news to many of us, because that means inventory is getting lower.  One of the things that has to happen to return to a healthy market is the decrease in inventory, especially the REO kind of inventory, (forelosed homes).

The not-so-good news for many homeowners is that prices have fallen, 15% countywide, and as much as 25% in some neighborhoods, since this time last year.  Of course, that explains the jump in sales.  And it tells me that buyers decided the prices were good enough for them to jump off the fence and purchase one of these great deals. 

Now, we're hearing about the lack of consumer confidence, the lack of credit, and lots of other doom and gloom news, but I'm not so sure that buyers are, well, buying it.  We have had recent situations concerning foreclosed homes, with multiple offers, one with 3- and one with 5 offers.  We had one buyer who took too much time and the home was under contract by the time she'd decided.  We're seeing REOs go for 10 to 20% below the present market, thereby insulating these buyers against the possible further 10%fall in price that some are expecting next year. That says something to me.  It says there's been a shift. 

We're hearing something else too.  Banks want to be rid of their REO properties in 90 days.  They keep lowering the prices until they're snatched up.  I believe the banks want them gone.  They want to cut their losses and move on. 

So, buyers, this may be your golden few months; keep your eyes open, get your prequal letters in hand, and be ready to jump when the price is irrisistable.