Friends, I hope that this new year and this new decade is one of hope, peace, personal contentment, and a time when you are surprised and happy with what you make happen in your life!
The question of the season is, so what is going to happen this year? First, let’s visit 2009 for a moment. It was the year of the first time home buyer. I helped buy/sell 46 properties and 31 of them were for people who had never owned a home before. My favorite was a family who has been renting in Davis for 30 years, and decided that NOW is the time to own. There was lots of nervousness around these sales, but ultimately the rates were excellent, the government incentives were a help and these new homeowners are excitedly begining to nest in their new homes.
What we did not see in 2009 were enough mid-range homes of good aesthetic quality. And even fewer high end homes. I believe that sellers in the mid-upper ranges have chosen to stay put and remodel rather than move up. For buyers in this range, the prospects were generally dismal.
So, 2010? If we were “returning to normal” before, we have definitely arrived now! People are buying homes not simply as an investment, but as a place to live, to have a sense of neighborhood, to raise their children and to LIVE comfortably. Sales take longer, buyers are more detail-oriented, processes are undertaken more deliberately.
Inventory will improve. At present we have 81 properties on the market. For a town with a population of about 65,000 this represents VERY few choices! Many people who were waiting will make their move to sell this year. We have a large population of people who own large homes (think Northstar) whose children have long since left home – I predict that this population will be ready to start right sizing, looking for something new that better suits their lifestyle. We will see these homes begin to come on the market.
There will be no “average” Days On Market. Homes that are attractive, well kept and accurately priced will sell within a week on the market, so buyers, be prepared to take action. Homes in ill repair, unstaged and unready for market, and not priced correctly will linger for hundreds of days. Buyers are no longer tolerant of paying top dollar for what they disparagingly refer to as “dumps”.
Interest rates will go up. The U.S. government will stop purchasing mortgage-backed securities from Fannie-Mae and Freddie-Mac by the end of March 2010 based on the lack of funds that have currently been allocated for the ongoing purchase of these mortgages. If true, this means that banks will once again need to step in and underwrite these loans (as opposed to the American public) and it’s fairly safe to assume that banks won’t be writing loans at 5% fixed interest for 30 years.
Foreclosures, in Davis? There will continue to be a handful of foreclosures in Davis, and there will be mid and high end homes in the mix. There will be short sales and new rules for short sale processes mean that the sales time will be shorter and less mysterious.
People want to build their own homes. This Instinct that is unscientifically based on anecdotal evidence from the many people I speak with. They want something new, something with a modern aesthetic, something that fits their life, something that they aren’t finding in our most recent inventory. There are very few lots in Davis, this is the year that homes will go up on these lots….