From Greg Nichols, Real Estate
Broker Associate w/ eXp Realty:
Welcome to my Local Real Estate Insight update. I get many questions from people about the market and what is going on. I have kept my finger on the pulse of the marketplace for years in this industry. I have seen many upward trending markets and many downward trending markets. We currently are near the tail end of an upward trending market. However, buyers are still looking for more inventory so a pent up demand for housing is still with us. The money is out there to be invested in housing in our region - the Sacramento Valley.
The last upward trend that we were in in this country and region began about 1997 and it lasted until about 2006. The current upward trend began in about 2013 and is still with us, but some believe it has leveled out right now. Maybe you are thinking of selling and you just don't know when it is best to do so. Right now is a great and strategic time. Below is one expert who is not expecting an imminent crash for real estate in California and their reasons why.
Will values be crashing soon in California?
The following is an excerpt from an online article by Managecasa, a software service for property managers:
Housing Crash Predictions?
"Hoards of millennials, working poor, and homeless people are praying for a California housing market crash, but prices have only leveled or dropped a little. With such strong demand driving the whole California housing market in 2018, 2019 and beyond, it’s unlikely a crash will happen. In fact, with the extra economic activity spawned by housing construction and household formation, there is upward price pressure. And the US economy as a whole is booming and we could be looking at an even longer run of economic prosperity.
That spells opportunity for buyers in California if home construction is allowed in an era of ecology-inspired building code red tape. How confident are you right now in buying a home or rental income investment property? Which cities are best for buying?
Let’s take a closer look at the California housing market for those people and demand factors that are influencing the business of housing here. By the end of this post, you’ll have a better idea of price predictions and whether you should buy or sell or rent in this market in 2019/2020." *
End of Excerpt: You may read the whole article here! *
*Source: Managecasa is a property management software firm based in San Francisco.
How Do Homes Get Priced When Selling?
Your real estate agent has the job of helping you price your home if you are selling. Many home owners think that the extra dramatic features and upgrades in their home carry the most weight in pricing. That is only a secondary consideration. There is an overlying principle in appraising real estate called "conformity."
What is the Principle of Conformity?
According to the Real Estate Glossary, "it's the idea that a house will more likely appreciate in value if its size, age, condition and style are similar to, or conform to, other houses in the neighborhood."
This means that your house value is tied to the comparable sales of similar houses in your area. If you price your home without regard for this principle, you can possibly price it wrong and have it not sell for months. Here is the good news. You get to use the 3 best comparable house selling prices of neighboring homes, as long as they are less than 6 months from their selling time. Your agent locates these comparable sales and then they are compared to your house to see if you have any differences that might allow you an upward adjustment of the prices found. Isn't that simple? A good agent will give you the knowledge about pricing so you can help the agent set the price in an educated manner.