For years, the upward price of Bay Area real estate has showed no signs of reaching a limit. New research shows that’s changed, as some sellers are learning.
Mariann Jensen thought the sale of her three-bedroom home in the Blossom Hill section of San Jose would be a slam dunk. On the market in June, the nicely decorated stand-alone sat with only tepid interest, until it sold in September..
“Just be prepared for anything, you know? Good offers, bad offers. Any offers. Just be sure you’re ready to wait it out. Or price, maybe different. Maybe lower the price,” said Jensen, as she stood in the kitchen of her 1900 square foot three level home.
It’s a shocking reality, as what has been a seller’s market shifts in favor of buyers; prices are being are being lowered to make a sale.
“We noticed that the open houses died off, and things got slow. And then all of a sudden the offers just didn’t come in like they used to,” said Sandy Jamison, a broker-owner with Tuscana Properties.
According to a new report from real estate firm Redfin, nationally, more than one quarter of the homes listed for sale saw a price reduction. The red hot real estate market is cooling, especially in California. And sellers are trying to catch lighting in a bottle by bending to the will of the buyers.
“Buyers are being discerning. Before they were looking at, here’s the list of things I want. Well let’s pick one and get a house. And now they see more inventory,” said Kalena Masching of Redfin.
Experts say Increased inventory is one reason for the plateau in prices. Another is increasing interest rates, and the simple fact that prices have gone so high, few can now afford to buy.
“Real estate has been in an 18 year cycle for 200 years. That means there’s a very regular cycle of real estate prices and construction that has existed since the early 1800s,” said Fred Foldvary, an economics and real estate lecturer at San Jose State University.
He says his research shows an economic recession follows falling real estate prices. Maybe it won’t be as bad as the crash of 2008, but those ghosts still haunt sellers.
“I was worried we were gonna be here for a little bit longer,” said Jensen.
She and her husband closes on the sale of their home this week, and then head to Hill Country in Texas to be closer to their children. For other sellers, the advice is to pick a price, but be prepared to do something that hasn’t happened in a while – take less than asking.