Lately I’ve been asked on a daily basis, “What’s really up with the market?” People are reading an article on Monday stating that the market is continuing to decline and then wake up the next day to an article in the same paper reporting increases in property values. How can homeowners and the public in general get a fair idea of what is really going on in today’s market with such conflicting stories being run? It’s a fair question – “what’s the truth in it all?”
It is my opinion that fair market values are climbing at a slow but steady pace. We are seeing increases in certain areas due to buyers’ willingness to pay fair market value for specific homes in the 2011 market. Maintained and Renovated homes can command a slightly hire price in this market. The reason we are seeing this is due largely in part to the fact that a very sizable percentage of available inventory is… well its junk.
When a ready willing and able buyer hits the streets to start viewing in this market it generally goes something like this – “oh my god, did people really live like this?” - “Uh…how much do you think it would cost to replace…. everything” - “I can’t breath, can we go now?”. Sounds comical, I know – but it’s funny because it’s true! I’ve seen things in homes that I wouldn’t dare speak of, never mind write of…
You can picture how buyers in today’s market would be willing to pay a slightly higher “Fair Market Value” for a home that has been renovated and cared for. This is why we are seeing slight increases in certain areas. The “value” of a well maintained home has climbed which in turn raises FMV for a certain sector of homes.
To be broken down it’s really easy to understand. With lending so tight, rehabbing a home to your liking is no longer an option for many. The days of buying a home, getting a home equity line and making it your Kingdom are over. Today’s homebuyers have most of their funds tied up in the purchase with little to no reserves for renovations. If we can provide what they desire, we can charge a premium, while not a large premium it is an increase, and these small increases over time are what bring us back. This is our slow and steady climb back to a more stable market.
Foreclosures may not be ending anytime soon, but that does not necessarily mean that our Fair Market Values need to continue to decline. Because there is so much “junk” inventory, good inventory can shine in this market and in turn; can command a higher price.
If you are buying or selling in this market, be sure to conduct your research and do your homework. There is a ton to take into consideration to fully understand what true fair market value on any particular property is. If you’re unsure, hire a professional; it’s what we do!!
