Realtors may be knowledgeable on current and past prices for their area, but they are NOT experts on future price trends. Realtors are NOT economists and very few have any business or economic training to speak of. They are SALESPEOPLE. The reality is that they only get a commission if you buy, so they have an incentive to be less then accurate as to their assessments. The few competent Realtors with integrity would admit that prices are going down and most buyers could save money by simply waiting for the bubble to further deflate.
Apart from a few â€œthe world is flatâ€ realtors, everyone realizes that prices are falling. Those that are expecting a quick turn around from this bubble are dreaming. The last cycle took about 11 years to reach peaking pricing from the previous peak. Here are your Los Angeles County vanilla medians between 1989 and 2000: http://www.laalmanac.com/economy/ec37.htm
Pretty amazing, someone who purchased the â€œmedian homeâ€ for 214,831 sold for 215,900 11 years later. However, this bubble appears even larger that the 1989 run up, as depicted in the following graph: http://latimesblogs.latimes.com/laland/2008/04/where-we-stand.html . Granted prices are falling faster, so perhaps we can reach a bottom faster.
In my opinion this would generally be a terrible time to purchase. All leading indicators are pointing in the same direction as to the Los Angeles market, (i) inventory has increased, (ii) sales transaction volume has slowed dramatically, (iii) lending standards have tightened (pulling thousands of potential buyers from the market), (iv) notices of defaults and foreclosures are at records levels, (v) the economy is slowing (looking more and more like a recession), (vi) literally thousands of high paying mortgage and other real estate related jobs have been lost in southern California over the past year and (vii) the mania which surrounded the real estate market a few years ago has been replaced by a conservative caution steering people to other investment classes. All of these things will put downward pressure on pricing for some time to come.
The reality is that residential prices will almost certainly be lower later this year, likely lower in 2009 and possibly even lower in 2010. Real estate cycles take many years to play out and we are at the early stages of a down cycle.
With that said, if you find your dream home and can purchase with a large down payment and conventional financing and don't care about prices dropping further, consider the purchase. But DON"T purchase with the expectation of future price gains for a long time. If history is any guide, prices will not rebound quickly when the bottom is finally reached.
Best of Luck,
Make sure you re-read Tisza's entry...it's good.
Additionally, Claremont is one of the most eastern cities in L.A. County. This allows for the people on the Westside of LA County to sell their homes when they retire and keep their old (pervious) property tax base. (Restrictions apply). Also, the Claremont Colleges...Wow that is a great reason to own in Claremont.
Claremont is an interesting place, I should know as I am a local expert and I live and work here :-) As for property values dropping here in Claremont, you will see some fluctuations but they will for the most part be minor.
One of the things that will keep pricing more stable here than it is in other markets is the simple fact that if you want to live here in Claremont, for the most part, you need to choose from one of the homes that are already here. We don't have much new home construction since we really don't have places to put new construction.
To give you an idea of what the market here in Claremont is doing right now I can give you the market statistics for last month: We had 153 homes available for sale in Claremont (Single Family Homes and Condo/Townhomes), 31 properties sold and one year ago at the same time 34 properties sold. We are down 9% in sales from August 2006 to August 2007. We currently have 4.9 months of inventory on the market (that means we are still in more of a seller's market here than a buyer's market). Our average home sold for $775,061 in August '07 versus $672,062 in August '06. So, as you can see, even though we sold fewer homes (by 3) this year than last, we still posted a 15% increase in overall value.
I said that Claremont is an interesting city and one of the interesting things about it is that the statistics stay pretty consistent, month for month and year for year. With some of the best public schools in the state, colleges that are world renowned, beautiful tree lined streets and homes that are as unique as the folks who live in them, Claremont really is like nowhere I've ever lived before.
The Claremont market is and remains strong. There is a reason why CNN Money ranked this city #5 overall of the top 100 best places to live.
If you are interested in finding a home here in Claremont to call your own or if you just want additional information about the area, please give me a call. I truly am a local expert and love helping nice people find a home here in this wonderful city.
Take care and have a wonderful day!
Tisza Major-Posner, Claremont's #1 Realtor, (909) 837-8922
Another reason Claremont's market is more stable than others is because it's a great place to live and people buy here with the intention of staying a long time. There are 14 homes on our cul de sac. At 15 years , we are one of the newbies on the street.
If people stay put home, values don't fluctuate much.
So Fatima, did you wind up buying here?
Okay. Talk to you soon.
Real estate never goes down (as long as you hold it long enough) and it is a ALWAYS a good time to buy!
Helping you BUY and SELL the homes of your dreams.....! -NNA
has anyone got some numbers on the claremont zips? i got twenty bucks says they're down year over year and month over month if you use a case shiller type metric...i will caution that using medians for any analysis is a bad idea...they really are useless...one 4 million dollar sale in the mix or a very slow month for the most typical sales in a trade area blows the relevance all the hell. the case-shiller style of trend analysis is more illustrative of reality
i will disagree with you that this is a terrible time to purchase...the next 18 mo=nths are going to be happy hunting times for anyone with some cash and a strong financial profile. i see positive cash flow rental properties in many areas and am planning to back up my truck and buy everything i can get my hands on. i haven't seen so many defensible investment properties ever before and ive been in the trade since the early nineties. residential is a different matter but given that it is not likely that a person might call a bottom i'd advise, and do, that one keep their eyes open and their powder dry to make a deal that they will likely be very pleased with in the long run...there will be some real trophy homes that go cheap and the victory here will be to the prepared. that advice though is ONLY for homes that are special in some fashion...tract type stuff and common homes will continue to be hammered for a full year or so.
No one knows for sure what will happen with pricing however, I will say that Claremont is one of the safest bets locally.
I would disagree that Tisza is the #1 Agent selling Claremont although the local real estate board seems to show that it is Geoff Hamill and Laura Dandouy. I guess we would all like to believe we are number one in our eyes though.
This is a great time for buyers! I say buy, buy, buy just make sure that you are paying below market so you make sure that any market adjustment doesn't hurt you once you have closed escrow.
Good luck ~