The number one question I am asked by clients and friends at social gatherings; “When are we going to be at the bottom of this real estate cycle here in Carmel and the Monterey Peninsula?” There is no quick answer and even if it exists, we are not able to see it clearly in this murky economy.
We may be there in many local markets, especially the entry level areas on the Peninsula. The lower price levels in Pacific Grove and Monterey are very active with multiple offers in many cases. Unfortunately too many buyers are playing the game of trying to pick the bottom. They need clarity before taking action, which means they will likely miss this buying opportunity. It may be helpful to remember a few common sense basics as we work our way out of this downturn.
First, buyers are not purchasing a “real estate market”, rather they are buying an individual home with its own pricing history. Astute buyers understand that each individual property has its own “bottom” and a general relationship to the overall market as a whole. It is reasonable that if we are not at “the” bottom, we are close, and the sum of the individual sales over time will make it clear with a dose of hindsight.
And most important, from a buyer’s perspective, the end of a cycle is very messy with lots of mixed signals, good days and bad ones. Experienced sellers understand the lack of uncertainty and price their homes as close to the “market” as possible. For the buyer, however, clarity is not a friend. Uncertainty is in fact the basis for opportunity. Once it is clear to all without any doubts that the market has turned, sellers will have gained the advantage and off we go into the next market cycle.
So the best advise I can offer comes from my clients that are currently buying in this market. “Ben, we may not be right at the bottom, but it is close enough for me to go and negotiate a good deal on a home I want.” Sounds like good advise to me.