I recently had a client contact me to sell his house. He stated that he had listed it a couple of years ago but had canceled the listing because prices were lower than he had wanted to sell the house for at the time. He stated that he hoped prices were more reasonable now. After some checking, I discovered that the home’s value had dropped another 20% since he had listed it 2 years ago. Yikes! So much for reasonable…from the seller’s perspective or the buyer’s??? California Real Estate is going to continue it’s downward trend for another year or so.

During the year we had the tax credits in place for “first time buyers” of homes, there was significant movement in the home buying market. Most of the homes that sold in the East Bay real estate market were foreclosures or short sales. Due to this fact, there were more buyers than sellers during the tax credits and as a result, the demand for homes outweighed supply. More buyers were making offers on homes than were available. When demand is higher than supply, prices will generally start to increase. This is exactly what happened. I worked with several buyers during this time and the majority of the time, my clients made offers over the asking price to even be competitive in the market.

Basically what happened was that buyers ended up paying more for the home than they would have had they waiting until after the tax credits were over to buy a home. By buying a home with a tax credit, buyers ended up using the tax credit for the price instead of receiving it as a discount for purchasing the home.

Pinole Real Estate

Now that the tax credits have expired, there are more short sales and regular sales on the market. However, buyers have pulled back and have decided to wait to purchase a home. Unfortunately now would be an excellent time for a buyer to make an offer on a home because the supply now outweighs demand so prices will start to drop. Buyers can make offers at or below asking and get more credits for repairs and closing costs.

Seller’s will have to be extremely realistic about pricing strategy. Yes! Your house is beautiful and well maintained and on a cul de sac, and you have a lot of land, but ultimately price is what will make a buyer make an offer. The features your home has brings them to the house.