Bidding Wars Igniting Redding Real Estate Market
INDUSTRY NEWS, SHASTA COUNTY, TIPS FOR BUYERS
May 6th, 2009
Whether I represent buyers or sellers, one thing is for certain: many buyers are bidding against one another to buy attractively priced homes in hopes of locking in a loan at historically low levels. This phenomena is sweeping the country including California, Redding and Shasta County.
Here’s why:
- Inventory is shrinking in many markets. Some areas are running into shortages of moderately priced homes. The Unsold Inventory Index dropped from 12.2 month supply in March of 2008 to 5 months in March 2009.
- Led by gains on the West Coast, home prices nationwide rose by 0.7% in February from January. First-time buyers should pay attention as this could signify the narrowing of the window of opportunity we are experiencing presently.
- Economists and housing analysts predict Sacramento and San Diego, hard hit areas of California, are poised to recover first. An executive with Lyon Real Estate in Sacramento said recently if the sales pace for foreclosed homes maintains its current pace, the supply will be exhausted in one month. For non-foreclosure properties there is an eight month supply.
- Lenders responding to offers on foreclosed homes are more likely to accept all cash offers or offers from buyers with pre-approved loans than the highest bid. Buyers unable to pay cash should get full underwriting approval before shopping for a home.
- Buyers should expect to offer full price or above for extremely desirable homes receiving multiple offers. Doing so increases the odds of sealing the deal.
I have written offers for several different buyers this year that were in a multiple bid scenario. Buyers should realize that some lenders are intentionally underpricing homes to create a frenzy of bidding activity. Being a buyers market, it is difficult to advise buyers they need to bid more than the asking price. Buyers usually learn the hard way after losing out on several properties they really wanted to buy. Eventually, they get tired of losing and accept the fact overbids are necessary to prevail.
530-224-6767 or 530-941-7492
BRAD GARBUTT
REALTOR/BROKER ASSOCIATE
REAL ESTATE PROFESSIONALS GMAC
CORNER OF COURT AND PLACER
QUARTER CENTURY LOCAL REAL ESTATE EXPERIENCE
