Grand County Real Estate: Good News: It’s a buyer’s market
April 21, 2008
If you are trying to sell your home, you may at first think that a “buyer’s market” is not such good news ” but here are the facts:
1. There are buyers looking for real estate in our area
2. Most are pre-qualified or coming in with cash
3. Our market is relatively unaffected by foreclosures
4. In today’s market you can still sell for more than you paid for your property (if you’ve owned for more than three years)
History doesn’t lie:
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– In 1988 Shadow Mountain Lakefront lots sold for $50,000. Today, $250,000 would be a good deal, if any were available
– In 1998, a cabin in Grand Lake sold for $86,000
– Today, $250,000 for a cabin is a good deal
– The same is true throughout Grand County
You’ve heard it all over the news. Nationwide, housing prices have dropped by over 11 percent since the first of the year. Big announcement ” we’re all supposed to be anxious and wondering, what’s next? Yet, this is good news.
Why are falling real estate prices good news? Because it’s the first sign that sanity is returning to the market, and sellers have finally gotten the message. A sane real estate market is the first step to economic recovery.
The only way out of our real-estate-bubble-inspired slump is a new real estate reality. Property owners must finally recognize that some of the prices we saw over the past couple of years were out of line, just like Internet stocks in the ’90s. Artificially high housing prices caused developers to build things that shouldn’t have been built; consumers to spend money that they didn’t really have; banks to loan money to those developers and consumers; and Wall Street to bundle those loans into products that most of us still don’t understand.
But, back to the good news. Like it or not, our mountain resort real estate economy is driven by investors ” second homebuyers ” speculators. The bad news repeated over and over has got them licking their chops in anticipation of all the good deals to be had. And they’re showing up to buy in all price ranges from our lowest priced lots to million-dollar-plus starter castles. If it looks like a good deal, acts like a good deal and feels like a good deal ” it must be a good deal.
The flip side of the coin is, our sellers are also made up of investors ” second home buyers ” speculators, who have no intention of losing their investments. But it’s just not realistic to think that anyone can sell a house for $400,000 that they bought last year for $300,000. If they’ve owned long enough, sellers are still making money in today’s market. Listing a $300,000 house for $400,000 and leaving it on the market unsold accomplishes nothing, and could even generate a loss when you calculate the payments, interest, taxes and insurance the seller would be paying. That’s just keeping the house and hoping it’ll appreciate in the future. The “For Sale” sign out front is decoration, something to keep the mailbox company. There are plenty of those still out there.
If this were just about the price of real estate, who cares at what price people try to sell their homes, or how long those properties stay on the market. But falling prices are helping to put the “market” back in the real estate market; it’ll get us back to a point where sellers are asking prices that buyers are willing to pay. And it’s already happening here.
It’s a signal to buyers that they don’t have to wait any longer for the deals that they know are coming.
It’s a great time for local residents and first time homebuyers to also be out shopping for a home. Contrary to what we’ve been lead to believe, there are some great loan programs available to those who have good credit. Our local banks and mortgage brokers know what they are. There is downpayment assistance available for those who qualify, through the Grand County Housing Authority. Homebuyer’s education classes, held once a month, are free and take place in various locations throughout Grand County. The market that has historically excluded locals has just hung out a welcome sign.
And finally, our local Realtors have their fingers on the pulse of what our market is doing ” which doesn’t necessarily mirror the national news. Both sellers and buyers can benefit greatly from the knowledge these real estate market specialists are able to share.
Things don’t have to get worse before they can get better ” we’re already there.
Cathy Walton-Smith is a Real Estate Broker with Century 21 Grand Lake, located on the Boardwalk in the Waconda business complex. She can be reached by calling (970) 627-3341 or on her cell at (970) 531-3055.