Home Buying in 94517>Question Details

Ayodejiolowa, Home Buyer in Clayton, CA

will real estate still go down in value or it has stabilise in value?

Asked by Ayodejiolowa, Clayton, CA Mon Aug 1, 2011

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36
Lisa and Goran Forss (Broker)’s answer
Going up here in Temecula. Very low inventory coupled with lots of home buyers/investors are driving up the prices. Up 8% over last year.

http://www.come2temecula.com/temecula-market-update-for-nove…
1 vote Thank Flag Link Fri Nov 23, 2012
My observation or crystal-ball gazing is drawn mainly from what I see in the press and maybe some professional publications. There has, indeed, been some growth in home prices. The greater Denver area where I am at has experienced a boom in home sales, particularly in the introductory priced homes and condos. I hear Florida has been scrambling because foreign investment showed up there.

Perceptions have changed because inventory has been low. A few weeks ago there was a report that foreclosure inventory was not keeping up with investor interest. As banks move more inventory onto the market, we could see stabilize. However, the picture here is more complex. For one thing, the average buyer doesn't want to take on a project or inherit someone else's run down home. They want move-in ready homes that show well. So, the current robust buying gives the impression that the economy is healthier. The other thing to note is investors are leaving the stock market for investments that may represent a better risk and right now the perception is that inexpensive homes are that kind of investment.

There has been an occasional analysis designed to lift our eyebrows. But, I don't dismiss them. The fact is home construction is way off pre-recession levels. Historic trends tend to hold, so we can expect that a population that still values home ownership will show up. Some say it will be an echo of the Boomer generation.

The nation has a remarkable population of people who are determined to beat the recession. When I see reports that 20 million or more people are unemployed, I see a healthy surge in housing coming. There already is a shortage of rentals here in Boulder County, where some estimate only a half percent of rentals is available. Boulder County and other Colorado areas have very attractive homes that eventually come available. People come here and fall in love with the scenery, the laid back living and the active lifestyles.

There will be areas that won't recover soon from the recession. Other areas are bound to recover. A huge Boomer population has started retiring. They represent more than half of my clientele. They will buy in Longmont and surrounding areas. They probably will ignore the foreclosure homes.

My advice is not to get too caught up in the gloom. Eventually these things the press is focused on work their way through. Call me an optimist.

Suz
1 vote Thank Flag Link Fri Jun 22, 2012
Down, down done until jobs go up, up, up!
1 vote Thank Flag Link Wed Aug 3, 2011
Unfortunately the prices are continuing to decline. This year it has been hard to believe but true. It is only a matter of time before interest rates go up due to inflation or actually any good economic news. People will not be able to buy as much house so prices will go down. There still are a huge amount of foreclosures and short sales coming on the market. This is also a downward trend. If you are a buyer, even if prices go down more, you would be better off buying now when the interest rates are low. In the long run you will come out better than a slightly lower price. Also banks are getting more strict on appraisals and aren't accepting lower than market prices like they did before. So I guess this is a good time to buy and also a good time to sell. If people would sieze the opportunity it would help the market improve and accomplish the buyer and seller's goals.
Lynne French, Clayton, Ca.
Web Reference: http://www.LynneFrench.com
1 vote Thank Flag Link Tue Aug 2, 2011
Hi

This as others have indicated a hard question for anyone to answer including real estate agents. We may be a bit closer to the market and get a feeling for what is going on, but we agents do not have a crystal ball.

The Clayton area from 2011 compared to 2010 has gone down 13%. We would all like to think we have bottomed out and in some areas this is true. Again as stated there are niches within niches that are on the rise with multiple offers.

If you are thinking about buying or selling to get a truer picture I would suggest contacting a real estate agent to give you comps for your area.

Let me know if I can help.

Linda
1 vote Thank Flag Link Mon Aug 1, 2011
Predictions are very difficult...especially about the future.
Web Reference: http://www.321property.com
1 vote Thank Flag Link Mon Aug 1, 2011
As of Tuesday, August 2nd, 2011; it is still going down!!!!

I can say that with certainty!
0 votes Thank Flag Link Fri Feb 8, 2013
Keep your eyes on interest rates and unemployment figures. Right now the law of supply and demand is causing prices to rise, but this situation could change quickly. If you are selling you may want to jump on the market before it becomes saturated. If you are buying you need to watch out for rising interest rates.
0 votes Thank Flag Link Fri Feb 8, 2013
It is my belief that the value in real estate will be hyper local. As we enter a more global economy information has become more abundant and the need for specialist has become more necessary. Real estate professionals will need to continually educate themselves and stay a breast of the latest real estate trends in their areas of expertise. Take a state like New York it is my strong belief that Hurricane Sandy will have significant effects on some communities while none at all on other communities. It is felt that in the case of New York, the recovery will be hyper local. Each county, city, and neighborhood will recover differently, some will recover sooner than other and some may never recover at all. For these reason's it is important for consumers to consult with real estate professionals for all of their real estate needs. So I guess the simple answer to your question is that some markets are experiencing a strong recovery as I write. While others are still plunging, while others are standing still.
0 votes Thank Flag Link Fri Nov 23, 2012
Passage of time has answered this question and the answer is an emphatic 'no, prices will not go down." An improving economy and an acute shortage of homes are moving prices.

If you're a fence sitter, don't despair. Mortgage rates are even lower. Who would have thought that the conditions would be good for both buyer and seller? Check it out.

Suz
0 votes Thank Flag Link Thu Oct 25, 2012
It apears to have stabilsed for the time being. Values have gone up in the last few months due to lack of inventory & low interest rates. As the inventory builds it will probably level out. I am hoping prices will start a normal appreciation path. One to six percent a year.
If the government doesn't extend the tax forgiveness for short sales, more people will choose foreclosure which will drive the prices down again. Let's see what the new year will bring.
0 votes Thank Flag Link Thu Oct 25, 2012
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0 votes Thank Flag Link Thu Oct 25, 2012
Hey, Shortsale, Agent, California. I just flagged you as spam. Do as other RE professionals on this venue do and PURCHASE your advertising space. This platform is for legitimate Q/A not self-serving touting of your wares.
0 votes Thank Flag Link Wed Jul 18, 2012
The pundits in the press say the markets are putting in a floor for prices. In Colorado, prices are up 7 percent over last year. Homebuilders are more optimistic than they have been in five years. Permits are way up. Inventory is becoming more and more scarce.

Sorry if you're waiting for prices to come down more.

If you are shopping in Colorado, you might have missed the boat for the market bottom. But good deals come along all the time.

The general advice is don't try to time the market. Make your purchase when it makes sense for you - particularly if your plan is to stay for more than five years. The market may cool some over the winter. But, don't count on a big move. If supply keeps losing ground the way it has here, buyers won't get any big breaks.

Hire an agent to help you. By the time you find what you are looking for, it may already be gone.

Best,
Suz
PML of Longmont, CO
0 votes Thank Flag Link Tue Jul 17, 2012
If there is a ripple effect from California, then I'd say they will go up since that's what's happening here. Demand exceeding supply is causing that.
0 votes Thank Flag Link Tue Jul 17, 2012
Welcome back Dan. LOL! Love your pessimism. So just where would you prefer to invest your money?
0 votes Thank Flag Link Sat Jun 23, 2012
Residential real estate will lose 50% of its value from current levels.
0 votes Thank Flag Link Sat Jun 23, 2012
Since I answered this question last year fortunately prices have come up enough to bridge the decline we had last year (10%) approximately. So they are flat so far. Not bad for this market.. All properties are not getting multiple offers. The condos and upper end are moving slower than the lower & mid priced single family homes. Single story homes are most in demand. If it is moderately priced and in tip top shape some are getting multiple offers. So far the majority of these offers still aren't going over the listed price.
As far as selling a property before it hits the market, this is the seller's choice. Many sellers, especially in short sales, really don't want the home exposed to the scrutiny of the market. They are embarrassed. As long as the potential buyer offers full price many sellers would rather just get it sold as soon as possible. Again this is their choice. Many sellers want to have it fully marketed and try for a higher price or better terms based on competition. This is the advisable way to go for most.
0 votes Thank Flag Link Fri Jun 22, 2012
Since this question was posted last August things have sure changed. Home prices in Clayton have risen drastically since March. Not only in Clayton but in the nearby area. Any reasonable home for sale will receive multiple offers in a bidding war. A certain Clayton broker will persuade tclients/sellers to not list on MLS so the broker can double-end the deal and sell the house immediately to their own buyer (an agent for this broker in Clayton told me in writing that these homes are "special gifts" for their buyers and that I'd have to work only with them to know about them).
0 votes Thank Flag Link Fri Jun 22, 2012
It's been my experience that house prces are stabilizing throughout California. Low inventory and low interest rates are pushing values up. I honestly don't see things going down sbustantially from here.
0 votes Thank Flag Link Mon May 14, 2012
Currently we have a low inventory in Clayton, which is a good thing if you are thinking of selling. It's the whole supply and demand scenario and rates are at historic lows. That's the good news. The bad news is that in the last half of last year the median single family home sold price was $511,025 and now year to date the median price is $489,000. The reality is that no matter what they say in the news, we all need a place to live and feel safe living there. Clayton home values are stabilizing and will start to see an increase in the next several months.
0 votes Thank Flag Link Mon May 14, 2012
Have to chime in with Bob. In the SoCAl (San Diego specific) market we've shown an upward blip. Not sure what it's all about yet but interest rates are still down, prices are not increasing but inventories are still a big question. We're still straddling the fence and proceeding with caution. Looking at a couple of distressed properties tomorrow that could pencil. Will keep you posted.
0 votes Thank Flag Link Fri Aug 5, 2011
Ayod,

I will be a bit more optimitic and say that things are showing signs of stabilizing in some price points and markets. As is everything in Real Estate the top 3 things are Location Location Location! Prices are, I prefer the word...adjusting to a landscape that is changing on a monthly basis and will continue to change through the first quarter of next year (and that is only as far as I can know about. If the meddlers in Washington and Wall Street keep jacking around it could be another year).

The proof is in the pudding. MLS analytics show some areas are up and down but the median is flat. Sales are up, inventory is flat, interest rates are down and we have a structural housing shorage in the Bay Area. Looks pretty good here, all things considered.
Web Reference: http://bob2sell.com
0 votes Thank Flag Link Fri Aug 5, 2011
Homes across the nation will lose 20% in the next 12 months...minimum.

The USA is a banana republic in so many ways: massive debt, debased currency ready to collapse, waging wars against...everyone, police state here at home, etc.

Hunker down. Stabilized real estate = eye of the hurricane.
0 votes Thank Flag Link Wed Aug 3, 2011
As Annette stated, it depends on WHERE. If you are asking about Clayton, then the current trend is downward, and has been for over a year. The average sold price per square foot has dropped from a high of $280.00 sq/ft in June of 2010 to a current low of $226.00 sq/ft. For homes under $800,000, the average sales price dipped from $680,000 in 06/10 to a current $429,000. As you know, Clayton is small and doesn’t have a lot of homes on the market at any given time. Currently, 21% of the homes for sale are categorized as luxury homes with prices substantially higher than the remaining 79%. This ratio tends to skew the overall numbers a bit – especially since most of these high-end homes have been on the market a long time.

If you just go with the existing numbers for Clayton, then I’d have to say the market in your area could easily continue in the same direction it’s be going for a while. We’re entering an election season, and markets tend to be soft during these times as uncertainty rules the day. In addition, Clayton is located out of the way and is not perceived as a real estate “destination.” There is no real compelling reason to move to Clayton as compared to other parts of the bay area.

However, if you are looking at Contra Costa County as a whole, average prices are actually trending UP, and have been doing so for the past 5 months. Pending sales have risen sharply, inventory is decreasing – all positive signs that a short-term recovering might be in the offing.

As stated by others below, there are so many factors involved – and the key is location.
.
0 votes Thank Flag Link Mon Aug 1, 2011
Hello,
I've had an eye on the foreclosure stories. And, while there are a lot of factors that play a role in a stabilizing market, one important indication of stabilization is the foreclosure picture. The argument might be made that the drop is a function of the banks halting foreclosures last fall. Even as foreclosures continue to drop, there is a backlog to consider. You might have heard mention of the "shadow inventory." Some estimate that there are still 2 million homes that have to be absorbed by the economy.

On the plus side: The foreclosures are unlikely to return to previous levels. The trend is not toward accommodating more foreclosures by the states. California has a non-judicial system for dealing with foreclosures, but the state also reports a drop in foreclosures.

Bottom line: Foreclosures dropped dramatically and this points to stabilization.

Though, the drama of the national spotlight muddied the near-term picture for stability. We'll know more as events unfold this week. On the basis of the slowing foreclosures, though, we can expect the trend of slow improvement to continue.

Best,
SuZ
PML of Longmont, CO
0 votes Thank Flag Link Mon Aug 1, 2011
Apparently, the Bay Area has started to get busy; Multiple Offers, and everything.

In addition, the "grapevine" is saying that Interest Rates may go up.

May I suggest talking to a local Realtor; my Broker.
Mike Rowland at: mikerowland@windermere.com
He is in El Sobrante, right next to Orinda.
Have a cup of coffee.

Good luck and may God bless
0 votes Thank Flag Link Mon Aug 1, 2011
Since you are in Clayton, I will give you a local answer. The market is hard to predict, but if you look at the factors, it seems that we might have a little bit more to go down before stabilizing. Obvioulsy, it depends on the area and city. Certain areas have more bank owned inventory and short sales. This will have a negative affect on home values. We won't have much stabilization in those areas until we get rid of some of that inventory. Some of that inventory is unknown, which makes predicting value direction impossible.
Web Reference: http://www.brokerdawson.com
0 votes Thank Flag Link Mon Aug 1, 2011
It is a well known and accepted fact across the board that RE is a local condition. You've received a broad cross-section of feedback from all over the Country. But to be more specific the San Diego market has been declining is certain areas to the tune of about 1 percent per month.

In other areas i.e. beach cities and other desirable hi end communities it has either stabilized or is even ticking up a tad. But there are no dramatic upswings that indicate that the market is experiencing a rigorous or enthusiastic bounce back.

There's still a lot of "shadow inventory" lurking in the midst. Just how much I don't even think the banks know. With unemployment, the federal and state budget crisis, fuel, food, education costs inflating the average person is struggling just to make ends meet let alone thinking about buying a home.

In my opinion, and it's just an opinion, we've still got a way to go before RE rebounds with any real exuberance. However, there are some deals out there. Especially for investors looking to buy and hold to rent/lease.

The flipping investor, at least in San Diego, is seeing a significant increase in turn around time and hard money lenders who are the feeding trough for flippers are seeing aging on their portfolios beyond 90 days in many cases whereas in the early days of the bottom ('07-'09) they were realizing less than 30 day turn around time.

As a general contractor, developer, RE broker, investor and property manager we are sitting on the sidelines presently waiting for the right market signals to pull the trigger. I'm a little skiddish about the SD market because I've noticed a lot of investors, many of them newbies, vying for the same properties which drives the prices up when values are going the other way.

I'm also seeing construction rehab going up which drives the ROI down all the more for flippers. The only comfort zone I see once again is in the buy and hold arena. If you're considering the purchase of a property for long term personal use or for your rental portfolio things may get a little better if you wait. But if you find a property you really like I don't think you'd be leaving too much on the table so I'd say go for it.
0 votes Thank Flag Link Mon Aug 1, 2011
That is a loaded question because so many factors play into it. I think location is huge and I am unfamiliar with Clayton. In Santa Clarita our inventory is low. In fact Stevenson Ranch only has about a 3.6 month inventory. Homes in that area fly off the shelf under $500K but over $800K they sit for a while and will some drop they're price to sell. Middle price range depends on the situation.
0 votes Thank Flag Link Mon Aug 1, 2011
Real estate today, as it was yesterday and will be tomorrow is dependent on LOCATION.
Some communities within every city have not only stabilized but statistics may indicate some increase.

A housing crisis in China or India may influence the economy in the USA, such as higher inflation and interest rates that will reduce the number of end user buyers. Let us not forget the banks may be holding significant inventory that may or may not come to market quickly.

If you want to be land Barron tomorrow, now would be a great time to begin building your portfolio. Talk with a knowledgeable professional in Clayton Ca for a real read on what is happening in your LOCATION.
0 votes Thank Flag Link Mon Aug 1, 2011
Many areas of the country have shown signs of stabilization but this can depend on a number of factors. Different locations, types of construction, price ranges, etc. within a community may differ in the degree of stability.

We recommend that potential buyers and sellers keep themselves informed about their local market trends. This will help to be prepared to make a sound decision when the right time presents itself.

Good luck,

Bill
0 votes Thank Flag Link Mon Aug 1, 2011
If you are considering buying real estate as an investment, only do so after a thorough financial analysis of the opportunity. If you are buying because you want to live there, another set of considerations should be considered. Currently the market has experienced significant price declines which make property more affordable. Mortgage rates are at historic lows which makes purchasing more affordable. If you have a stable income and sufficient funds, it is a great time to buy. Engage professionals to assist in making this decision.
0 votes Thank Flag Link Mon Aug 1, 2011
No one can answer this question as you are asking it in a manner that requires predicting the future. Real Estate is no differnet than any other market it goes up anddown over the short term and no one can time a market, However real estate will always go up over the long term because there's a limited amount of desireable land where people want to liveby choice and the populationcontinues to grow.

If you need a place to live, can afford to by a home, and plan on living in the same area for 5 or more years, then by all means you should do so.

In my area real esatate has stablilized and in some price ranges and locations has begin going up a little.
0 votes Thank Flag Link Mon Aug 1, 2011
I have seen some stabilization, here in the Chicagoland area, the first half of this year. But my crystal ball has been seriously on the fritz, so I can't really tell you whether that's a nice "blip" on the radar, or the beginning of a trend.
0 votes Thank Flag Link Mon Aug 1, 2011
Alan May, Real Estate Pro in Evanston, IL
MVP'08
Contact
Real Estate here in Florida is stabilizing!
0 votes Thank Flag Link Mon Aug 1, 2011
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