Competing With The Joneses
Tyson Lund
Real Estate Business Analyst
A recent report release by the California Association of REALTORS® outlined how the median price of a single-family home in California will again increase by double-digits next year, again being fueled by the continuing shortage of housing across much of the state. (California typically gains nearly 250,000 new households, yet only will build about 200,000 new housing units this year, creating a shortfall of about 50,000 units.) This begs the question, “Is Carlsbad experiencing a shortage in inventory” and how does this affect me as a buyer and/or seller.
Current State of Inventory in Carlsbad
In October 2004, the number of available homes in Carlsbad reached record levels. Whether it was to cash out of their remarkable equity, move up or into new construction, more residents were compelled to sell than ever before. Sellers faced enormous competition, not only from growing resale market, but the numerous new construction projects, who incidentally, also began to offering incentives (upgrades, landscape allowance and realtor fees) to buyers. Selling prices had increased substantially since the beginning of the year, but as the inventory increased the sales prices began to lessen. Inventory continued to decrease until the first of the year, and has currently been fluctuating slightly allowing a small amount of appreciation.
Recently, Carlsbad has experienced an increase in the number of homes for sale, which is normal and should continue into the summer. Knowing who your competition is and pricing your home accordingly is an extremely important step to a successful sale. If there are a number of similar properties competing with yours, the ability to sell without compromising your price will be more difficult.
Who do you compete with?
The amount of similar properties within your price range will determine how much of your asking price you will receive and how fast you will sell. Properties you will compete with are those in your community that feature the same living space as yours, i.e bedrooms and baths, built around the same time, within the same school district, similar amenities and location in comparison to your property. Also, take into account comparable sales, but keeping in mind that the market is dynamic and that sales price is a combination of past sales and current inventory levels. And since new properties continue to enter and exit the market every day, you can be assured that your property will change in value.
Keep Your Eye On The Condo
With their lower acquisition costs, condos appealed more to first-time buyers who accounted for 37 percent of all condo buyers in 2004, according to the National Association of Realtors. Attached property also caters the single-person households and has become more appealing as a second home purchase to homebuyers. The inventory for attached housing remains tight in Carlsbad. If it remains so, attached housing will continue to enjoy better appreciation than detached property, as it has for several years.
For more information Email Tyson at Tyson@LundTeam.com or Call (760) 431-3338