Northern California Real Estate
Recreational And Estate Properties
We have been doing this since 1976
Market Conditions In The Country
Updated: November 2, 2007
MARKET CONDITIONS IN THE COUNTRTY: They are not the same as in town. From 1990 to ‘96 we saw the first real recession in the real estate market since 1929-35. The country market is more resilient. That market was flat from ‘91 through most of ‘93. In late 93 it came back to life. By 97 we had sold our way through the built up inventory and prices were rising. In 98 through 2000 they were going up about 20% each year. In 2001 & 2 about 5% and then back to 15 to 20% through late 2004. Then it started slowing down and appreciation is now flat. My SWAG is it will stay flat for another 3 years. So far after 2 1/2 years of saying that they have actually gone up a little in some cases.
Selling motivators are usually death, divorce and job changes. Country property usually is extremely recession proof due to it being held by fewer financially stronger people and they typically are not as effected by job changes.
I am tracking about 120 properties on my Rural List. Unfortunately, less than five percent are realistically priced and have a nice ambiance. The list includes my listings but it is primarily to keep track of other agent’s listings that fall into my guidelines. If you want a copy let me know. I cannot have it on the WEB as it violates our MLS rules. I often modify agent’s fliers or make up a brief report of their inventory. I do not want other agents to know when I think they have a good deal. They are often not in a position to evaluate it against the competition as they have not seen the competition. This was proved dramatically last month when a local large producer put a very nice parcel on the market under market value. It sold immediately. On the other hand we are still seeing listings coming on to the market at ridiculous prices.
About 25% of listings are on the market at a reduced commission. These usually do not sell well as agents will avoid them if they can. It is very easy to do. “You don’t want to go there, they have a terrible neighbor.” They often sell for below market because of agents blaming the price as the problem. This is often the result of their inexperience and trying to BUY A LISTING by giving it an unrealistic value and offering to work for less money. I do sell these properties but I ask you to guarantee me a reasonable paycheck. The lower the commission the less they perform and the harder I have to work.
I should be carrying between five to ten listings. I now have 3. I have sold everything else. Good inventory is very limited
Selling this kind of property is like looking for a new outfit for a particular function. No matter how nice the inventory is, if it doesn’t fit, you do not want it. It has to feel right. It has to match your requirements. This is not a cookie cutter process. Due to the lack of good inventory, it may take time.
As a defensive tool, I have to cut back in some way because I am simply working more hours than are reasonable. Unfortunately, I do not know of any property that I think is nice that is under $250,000. Thus, in the future, I will not track any property under this price.
SALES STATISTICS FROM May 2006 to June 2007.
During that time loosely defined as country properties sales have been about 344 units and have exceeded 500 million. Volume is only off 5% as compared to the previous year which was a record at that time.
In the price range from 1 million to 2 million there is no apparent decrease in prices.
Under 1 million and over 2 million there is a small price break. It is more pronounced in the over 2 million range.
Overall there seems to be a 3% price decrease in value over the previous year.
The time to sell has increased by about 18%. We are still suffering from agents taking listings at un realistic prices.
There is very little good inventory on the market.
Joe White