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Q: I listed my home for sale in Mammoth a couple of months ago at what
seemed like a really good time to put it on the market. Now it is just
sitting there and nobody is even looking at it, and I see there are
more and more properties on the market competing with it. What the heck
is going on?
A: This is today's most common question among sellers, potential buyers
and even amongst the real estate community here in Mammoth. There are
clearly many market conditions that have led to where we are today, so
let's take at what they are and what the crystal ball says.
First and foremost, let's look at two underlying global issues. A
presidential election always causes hesitation in marketplaces, hence
the term "election year" in the business world. Many questions are
asked and pondered; how much artificial stimulus of the economy has
there been by the current administration? What would a change in
administration do to change the economy, tax benefits and strategies,
etc.? What will happen in 2005 and beyond as a result of the election?
The answer, for now, to those questions is that many people and their
money have simply moved to the sidelines and are waiting.
The other underlying issue is the state of the world in regards to
terrorism and war. This creates more uncertainty, and thus more
hesitation by the public to make major purchases. On whole though, this
issue seems to have been a plus to the Mammoth real estate market the
past couple of years. The public seems less inclined to want to travel
by air and more comfortable being a tank full of gas or less from home.
The threat of terrorism has made Mammoth's isolation yet proximity a
real asset.
Now let's look at things more locally. From a visitation and economic
standpoint, the winter of 2004 died early. Almost summer-like weather
in March decreased the volume of visitations. Our southern California
clientele is like that–it gets warm and their minds wander from winter
recreation. The decreased visitor traffic softened what has become in
the past few years a very busy real estate period–spring. Add to it our
normal, seasonal, summer increase in inventory, and here we are.
We also have to look where we have been the past 18 months. The market
has experienced low inventory, incredibly low interest rates, and
appreciation in many market segments during that period in the fifty
percent range. No market can sustain that. Many of today's sellers are
sitting on asking prices that they dictated based on the rapidly
escalating values of that period. Many of those asking prices have
simply exceeded what prudent buyers are willing to pay.
Good properties without astronomical pricing and/or intense direct
competition have a good chance of selling in the next few months.
Sellers and properties with unrealistic pricing will need to get
reasonable or they will sit and get stale. Properties that have intense
competition (like cookie-cutter condos) will see price reductions until
the market establishes what buyers are willing to pay.
But there is another very positive market message here. The market
conditions have opened an attractive window of opportunity for buyers.
This issue of the Real Estate Times (mid-summer) really marks the
beginning of the selling season for real estate–the sales push and
frenzy that annually occurs as we head towards winter. It is phenomenon
that only a resident in a major ski resort can relate. Thousands of
southern Californians have their ski passes for next season sitting on
their desks dreaming of powder. Many of them still want a piece of
Mammoth real estate.
Right now buyers actually have the chance to select (what a concept)
from a quality inventory of available properties, AND they even have
the opportunity to negotiate with some flexible or motivated sellers.
We might even have a brief "buyer's market". And interest rates are
still so ridiculously low. Personally, I don't think that market window
will be open very long. All the dynamics in this market and community
are still in place and as strong as ever. The rush caused by the
anticipation of winter will close that window. Where we go from there
is anybody's guess. Meanwhile, the breather and some balance have been
good for the local market.
As for your home that is listed for sale and currently sitting on the
market, you need to make a decision, either get it priced more
competitively in the marketplace or be patient, and likely both. And
from my perspective, I can assure you that a different photo or
verbiage in your broker's advertising, or better positioning of the for
sale sign in the yard, is not the magic solution. The frenzy is over
for now. The southern Mono County real estate market has charged
forward and appreciated significantly in the past 18 months, and now it
has taken a bit of respite and has corrected and is ready to move
forward. Hopefully, now with a little more equilibrium. The rules have
changed some but the market is still in your favor. Get smart and enjoy
the ride.
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