Welcome to Dan's resource page for information about the current and past housing market. The links to the right are articles Dan has gathered that reflect not only the local Santa Barbara market, but also regard the health of the industry nationwide. He truly believes a successful Buyer or Seller is a knowledgeable one, and we hope you find the following articles both helpful and informative.
Should you like to discuss housing trends in relation to your current real estate needs, or merely have questions about the future of real estate both locally and nationally, please give Dan a call at (805) 565-4896 or send him an email. All correspondence is confidential and Dan is always happy to lend his expertise.
Now is the time to sell, real estate consultant says
By Mary Umberger
January 2, 2011
People who have been delaying putting their homes on the market should do it soon because prices may go down 5% to 8% as banks unload a glut of repossessed properties, Steve Harney tells agents.
Sell now, avoid (some) regret later.
That was Steve Harney's advice recently to a roomful of real estate agents. Harney is a housing industry consultant who told the assembled agents of John Greene Realtor in Naperville, Ill., that they should tell clients who have been sitting on the fence about selling that the time is now — if they want to sidestep more marketplace competition in a few months.
Or, as he put it, the cork in the dam is about to pop.
That "cork" is banks' indecisiveness. The "water" behind the dam is their stockpile of foreclosed homes, which has been growing with a vengeance for a couple of reasons, Harney said.
Banks have been in a state of limbo this year about what to do with repossessed houses, and so they have mostly held on to them in order not to add to the nation's oversupply of homes for sale, Harney told the agents.
"The banks have been saying, 'There has to be a number [the market] can hit where we can keep the river going without flooding the valley,'" he said.
Apparently, he said, the nation hit that number recently, as prices reached a relative level of stabilization. A Dec. 17 report from Re/Max, for example, said sale prices dropped "only" 1.7% from last year in its 54-city survey, which would indicate general price equilibrium.
But before you break into applause, consider that while the banks were waiting for that sign of stability to decide when to put their holdings on the market, they also were foreclosing at a rapid pace.
"In August, the number of houses banks took back was up 49% over the year before, and September was the greatest month in history for repossessions," Harney said.
That's bad for individuals, of course, but necessary, in Harney's view, for the housing market to heal itself.
Then, the robo-signing mortgage-document fiasco unfolded, causing major lenders to put new foreclosures on hold for a while. But as that situation begins to inch toward resolution, banks are resuming foreclosures, which is only putting more pressure on the dam, Harney said.
With the general agreement that the market has hit some long-awaited neutral spot, the banks have their hand on the cork, Harney said. He, among others, expects that cork to come out by the second quarter, as lenders push 3 million or 4 million (as seen by foreclosure-data firm RealtyTrac) to 8 million (as forecast by Morgan Stanley) foreclosed houses onto the market.
As a result, the burgeoning inventory should push prices down 5% to 8%, Harney said, although gloomier views foresee a 20% drop.
Harney is among those who believe that the worst is generally over for the market, and that the inventory mess and lending issues will work themselves out in 18 months or so as pent-up buyer demand begins to reassert itself.
Meanwhile, he said, selling earlier this year will probably net a better return than late.
"If you have a $500,000 house in Chicago, and the price drops 5%, you've just lost $25,000," he said. "That's why I'm telling agents, 'Don't let sellers wait till spring; they're going to lose money.' "
But what does that mean for buyers this year? Why should they buy from those early-year sellers if the prices are going to drop further?
Harney good-naturedly espouses a kind of logic that seems endemic to the real estate industry (and drives some economists crazy): That it's always a good time to buy — and to sell.
"There's no good news or bad news, just news," Harney said. "Every time a house rises in value, there's a person who makes money and a person who says, 'Darn!'
"And every time a house loses value, there's a person who says, 'Darn!' and a person who says, 'I got a steal!' "
Buyers, he said, should take a look at those recent charts that show mortgage interest rates creeping up and consider how much it might cost them to wait.
"That cost is going to go up, even as prices go down," said the former owner of a New York real estate brokerage. "Now is the time to buy."
Umberger writes for the Chicago Tribune.
MARKET INFO > ARTICLES HOME PAGE
(Realty Times, 1/6/10)
Golfer Couples Sells House
(Wall Street Journal, 9/18/09)
Best Cities For A Housing Recovery
A Tale of Two Markets Divided by the Conforming-Loan Limit
(Los Angeles Times, 6/14/09)
When Home Prices Hit Bottom
PGA pro Fred Couples Lists Montecito Home at $12.5 million
(Los Angeles Times, 3/24/09)
The Road to Recovery
(Dan Encell, 3/12/09)
How to Sell a House, When You Have to Sell It Now
(Santa Barbara News-Press, 7/14/08)
S.B. listed as one of U.S.'s most distinctive destinations
(Wall Street Journal, 1/13/09)
South Coast economy resolute, expert says: Forecast: Santa Barbara's situation "boringly steady"
(Santa Barbara News-Press, 4/18/08)
South Coast office space remains at a premium
(Santa Barbara News-Press, 1/30/08)
2007 Real Estate & Economic Outlook
Home Prices May Fall Again
(Santa Barbara News-Press, 2/23/07)
Home Sellers Find Buyers are Standing Tough
(Santa Barbara News-Press, 11/10/2006)
Future Trends will Reshape Real Estate Industry
(Santa Barbara New-Press 11/1/2005)
Number of Homes Sold in County Drops
(Santa Barbara News-Press 10/25/05)
Housing Market Shows Signs of Flattening
(Santa Barbara News-Press 9/30/2005)
Home prices hot, but buyers cool
(Santa Barbara News-Press 3/24/2005)
Casa de Maria puts price tag on Montecito Property
(Santa Barbara News-Press 1/25/2005)
Helping buyers find their "Home Safe Home"
(Santa Barbara News-Press 1/2/2005
Rich buyers help boost median home prices
(Santa Barbara News-Press 12/23/2004)