January 2018 Confidential Sellers’ Market Update
(PLEASE DO NOT DISTRIBUTE OR SHARE. THIS IS INFORMATION WE SHARE TO OUR CLIENTS ONLY. COMMENTS ARE OUR OPINIONS, AND DO NOT REPRESENT GUARANTEES IN ANY WAY. YOUR SITUATION IS UNIQUE, ALWAYS CONSULT SPECIFIC PROFESSIONALS FOR TOPICS OUTSIDE OF REAL ESTATE. THANK YOU!)
Chino Hills is now on its FIFTH STRAIGHT YEAR of an upward market. Much as John & I would like to say that it’ll keep going strong, we can’t. We’re beginning to see signs of weakening, or at the very least, stalling.
1. When most loans are of the 30-year FIXED variety, that is a sign of strength. Most of the market declines were precipitated by Adjustable (ARM) Loans, and any other varieties. There are other scenarios, such as REDUCED down payment requirements. Currently, even the major banks are now offering ADJUSTABLE loans. In my opinion, such loans are like removing the pin from a grenade. It’s just a question of waiting for the time for it to blow up. When the initial LOWER payment is done, many are often not able to refi their way out of it, and the snowball starts.
2. Taking a look at the “How’s The Market” chart in the latest update (scroll below), note the top line, which is the number of unsold/available inventory in Chino Hills. This is mainly 4-5 bedroom homes, no condos, townhomes or custom homes, and no homes in the older pre-1984 areas. Note the full year chart, showing lower inventory around Jan of 2017, and Dec of 2017, while the highest levels are the summer months in the middle.
TRADITIONALLY, the best time to sell has been late spring through summer. Despite increased inventories, the higher number of buyers “prevents” inventory from causing a drop in prices. This has been true for decades, but hinges on ONE main point – that the buyers are locals like you & me, sensitive or tied to the school calendar.
In Chino Hills, the last 5 years have completely changed. One look at the lower BLUE line shows how many completed purchases by the month. It is a surprisingly steady range between 40 & 50 throughout the whole year.
In other words, we ask: Why sell when there’s almost FOUR TIMES the inventory and competition? Why not sell when there’s a lot less homes on the market? Of course, we still sell many homes through late spring and summer. But we have also recommended to sellers that if their schedule and time frame allow, why not AVOID the competitive time? While we cannot guarantee it will be the same for everyone, we have once again successfully sold many clients’ homes during this “quiet” window of October through March, and many getting BETTER prices than summer.
*** NEW CONSTRUCTION around the city:
This has been an interesting topic. In general, new single family homes will tend to push older homes around it DOWN. Townhomes & condos, or homes with ATTACHED walls help support older homes, but just the smaller homes.
Of course, every home & neighborhood & situation is unique & different. If you’d like to learn if this is right for you, just call us at (909) 262-3132 for a friendly & exploratory visit.