May 13, 2008

Critical Thinking

So we’re seeing a few signs of the market picking up. Granted, it is May and it’s time for the annual summer sweep in the real estate market. But everyone’s getting a little excited. This Realtor is telling us that the market has completely shifted from 2007 to 2008.

Then again, I think the writing is a little biased. I read back to last summer and couldn’t find any negative information about the real estate market. The Realtor provides great information - thorough statistics and data. It is just the pressure to buy and the way the data is presented that makes it so hard to chew.

So what if I had followed this line of advice? Here I’ve chosen 1 neighborhood to focus on (Pacific Hills in Mission Viejo) and looked at when the it was claimed a good time to buy and what the home would be worth now.

Sat, Oct 21st: It’s a SPOOK-Tacular Time to Be a Buyer
20 Montgomery
4 beds / 2.5 baths / 1,768 Sq Ft
Sold For: $670,000

Fri, Nov 30: Market Time Report: ‘Tis the Season To Buy
1 Bolero
No bed / bath / Sq Ft Listed
Sold For: $550,000

Currently On Market:
26 Harveston
4 beds / 3 baths / 1,800 Sq Ft
Listed For: $619,900 (estimated by Zillow to be worth $602,500)This is a short list, there are several other places where it was proclaimed to be a great time to buy from October to December of ‘07. Had people jumped in and bought homes their home would currently be worth less than they had paid for it. Yet as I reported last week (Why TV’s Bad For You) - CAR anticipates that home values will drop an additional 24% in 2008.

All this to say - be careful what you read. There’s always an agenda. With Why TV’s Bad For You fresh in my mind, I keep thinking about the fact that numbers can be spun in so many ways. As you make a decision on buying or selling try to keep any sales pitches out of it if at all possible so as to make a level headed decision. The market’s not stable and probably won’t be for a while. Buying today is a risky move - do so cautiously!