Fitch Properties

Fed-up … Interest Rate Jitters Rock the Northern CA Housing Market!


Roseville, CA -- (ReleaseWire) -- 06/20/2006 --With the housing market showing dramatic signs of correction, a concern is that the economists and pundits are hyper focused on old data, simply out of touch with the actual market. We are going to have to wait a couple of months for the real numbers to come out, but to remove any speculation that anyone might have, the numbers are going to be far worse than everyone seems to be predicting. Predictions of a soft landing are the majority belief … but when is the majority belief specific to financial markets ever right? Many seem to have a short memory span when it comes to the historical picture of the financial markets, and right now that is quite possibly a good thing. Talking heads are one thing … most of us knows who the talking heads are, but the Federal Reserve has an interest rate shot gun and they as a group seem to be waiving it around ready to fire with both barrels. We have multi-trillion dollar debt to manage and the quagmire of numbers that are a product of that debt can be blinding … sometimes it is necessary to look at the reality of the economic situation … incorporating the here and now information into the equation.

If you are a contrarian then maybe you should begin to look for bargains in this market. However, here is a little bit of advice for property owners that need to sell now … you may wish to consider the following: In Northern California we are seeing hundreds of price reductions daily, but that doesn't tell the true story. Home sellers are pricing themselves right out of the market to begin with, only having to drop their listing price three weeks into their listing. The real estate market is noticeably correcting, and with the correction there is lack of Buyers. Moreover, there is an abundance of inventory, so the home seller has very little margin for error. Ed Fitch of Fitch Properties / points to one fatal Seller error, and he sees it all the time ... "Pricing your home too high initially will lessen the value of your Multiple Listing. Sellers feel if they price their home on the high side then they can accept a lower offer that will be palatable for them, and it does not work like that. Sellers will be continuously dropping their price far below where they would have sold in the first place had they priced correctly." The bottom line is that if a home sits on the market forever it has a stigma attached to it regardless of how nice it is ... pricing correctly at the onset of the listing is critical. An attractive property when priced correctly will sell in this market. However, if you are upside down on you property right now, you should try to negotiate with your lending institution rather than letting your property go into foreclosure.

Ed Fitch is a published author and has written articles for Northern California Real Estate Publications.

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