Parsons Real Estate Group

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The market is coming back! - January 2007

Posted by Mike Parsons
January 17, 2007 at 03:59 AM

It has has been a cold Oct., Nov., and Dec. I'm not referring to the weather, I'm talking about the real estate marketplace in Columbus, Ohio. Buyer's confidence had dropped and there were more sellers than we have ever seen. This was due to many homeseller's low interest, adjustable rate mortgages turning to variable/higher interest rates than when they purchased in 2003/2004 on 3 year fixed mortgages. They were quick to put their homes on the market as they could no longer comfortably make their monthly mortgage payment and could no longer refinance their way out of their money problems because rates had creeped up a bit. This adjustable rate mortgage trend coupled by record homebuilding, with mostly short-term buy-down financing loans, created an increase in supply to the marketplace. The supply rose above the demand and turned a seller's market into a buyer's market. We saw real estate prices drop anywhere from 1%-6% depending upon the area of town. (Before you start getting chestpains please realize this minor correction is peanuts compared to what our friends in California, Arizona, and Florida have seen over the last few months.) When the national news was predicting a real estate landslide we knew the market didn't have far to sag, but our buyers and sellers heard the message and were nervous. I am here to tell you that the market has hit the bottom. I am not telling you that we are looking at another incredible bull run, but a nice steady renewal of consumer confidence and getting back to Columbus's typical 2.5-3% appreciation per year. There are some real, real estate values out there and buyers are starting to come out of the wood work and claim them. Now that all the holiday craziness is over they are getting back at it.

I expected to go on a nice peaceful vacation to watch the Buckeyes play in Arizona after the new year, afterall it was a pretty slow real estate market, I had some time to kill. In between lounging by the pool when I arrived, sitting in a lawn chair on top of our RV while tailgaiting, and through the next two days I was in Arizona, I was bombarded by calls from buyers. "Mike, we are ready to start looking!" "Mike, remember me, I want to buy a house!" We have seen a definite increase of showings on our listings after the new year as well. There's nothing like being in the middle of the desert without internet or cell phone service. It is great to be back.

The real estate tornado that analysts predicted has been a little thuderstorm and we are starting to see the light. Buyers that are first to the market this January will be the ones to get the best prices. I predict our bad market is turning to good and will continue over the next 2-3 years to be a good market. The market won't be great again until our local and city governments create more jobs and boost the economy. In short, the buyers are coming back! To be attractive in this marketplace, sellers need to use a pricing strategy based upon sales over the past 3-4 months rather than looking at comparable sales from the beginning or the middle of 2006.

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