by Dennis Copson

Created on: May 24, 2008

PET PEEVES: Real Estate Hype and Realtors Who Use It

I read an article in my local paper recently by a corporate real estate sales person which irked me to no end. In it he hypes' the current real estate market as having reached bottom and now accelerating upward. "Don't miss the boat," he implies, "lest the new boom' set sail without you!" Pure unadulterated hype designed to scare a buyer into the market now rather than later. Peeves me - you, too?

In my area, San Diego County, California, we are not near bottom yet. The reasons for this are many, but the foreclosure numbers alone indicate there will be large numbers of homes coming on the market at deflated prices for an extended period. This factor in itself will inflate the inventory considerably. Supply and demand applies to real estate especially. Bank owned property in the market in large numbers is never a good thing. Banks will and do accept offers well below market value. That sale becomes the next comparable for the neighborhood causing sellers to adjust their listing prices downward which they resist to the max.

Here in San Diego, there was a small increase in sales activity and even prices for April over March. That is to be expected as spring - summer is the peak buying period for houses. Is this slight upward movement enough for realtors to begin hyping'? Hardly. Even the experts advise that a trend won't be discernible for months.

In the San Diego Union - Tribune (Tuesday, May 20) DataQuick analyst Andrew LaPage is quoted as having the little blip of positive activity pegged when he says "For the most part, this is a good, old fashioned blue plate special - this is discounts spurring more home sales for the most part." In other words, prices discounted by sellers of short sales, which are becoming trendy, or bank owned sales. Not by eager sellers willing to accept rock bottom prices. Not yet.

LaPage and other experts caution that the burgeoning market of the past has not returned as of now. And it may take upwards of a year to do so in any positive fashion. Increased sales in April were highly influenced by 35 % (869 of 2475 sold) being on foreclosures. The current San Diego market inventory of 18,000+ with a sales factor of @3000 a month won't deplete inventory much even if another house doesn't come on the market. However, foreclosures will continue to be added to inventory for the foreseeable future. These will influence asking prices.

Buyers tend to wait and see' in this type of market. That is

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