Copy for Real Estate Guide Column for 8-26-05 (473 words)

REAL ESTATE PATTERNS
By Ken DuVall

ITS NOT OVER YET

“Parade” last Sunday said, “In this climate, sitting pretty pays. Nationwide, the median home price has gained 55% since 2000, up to 100% in CA. The reason for this boom is the biggest generation ever- the ‘Boomers.’ (born 1946-1964. The Gen Xers, born 1965-1976, are plowing ahead too, the next major upcoming demographic group. Gen “Y”, born from 1977 to 1994, are subsequently to make their economic presence known) “The Boomers are in their peak earning years and are spending on real estate at a record pace. Will it last forever? No. But it will last as long as the boomers are in it- probably another 10 years. Hunkering down with plans for gradual property improvements makes sense in any market- boom, bust, or anything in between.” If it were me, I wouldn’t be shoveling sand against the tide. Time- not timing- is your ally. I’ve had clients ask me, “Should I buy and flip for a profit in a year?” My answer: No. Plan on holding it for 5 years at least. That’s prudent.
CHICO IS DOING JUST GREAT
Locally, just about as many properties coming online are going into escrow. The Pending Sales Index, in escrow but not closed, is at an all-time high. This indicates historic home sales levels will continue. Nationally, existing home sales in June were at the highest level ever. Of course, real estate is cyclical, seasonal, and interest-rate sensitive. Kiplinger forecasts the 30-year fixed rate loan will hit all of 6.25% by year-end, up from 5.9% now, no big deal. So far, so good. We’re still experiencing dramatic response to well-priced, well-located offerings. Example: a downtown Chico $950,000 residential income property came on last week and had multiple offers within 24 hours.
SO GOES THE NATION
Record sales are stimulating the economy, creating high demand for related goods and services, and creating new jobs. The overall housing sector now accounts for fully 25% of all economic activity. Extraordinary when you think about it. In addition, the growth in housing wealth is feeding consumer spending, helping many other segments of the economy. History- the best guide to the future- is telling us that housing is simply the best long-term investment a family can make, with home equity accounting for the lion’s share of wealth. Since 1968 prices have risen 1 to 2% faster than inflation. When you look at the home appreciation rate relative to the inflation rate, these are the strongest increases ever. Americans view housing as a solid long-term investment and are taking advantage of the current favorable conditions to improve their lifestyle and long term financial interest. In my opinion, the only way to lose money in Chico real estate is to not own some. Of course, with 20/20 hindsight, I wish I still owned everything I ever bought over the last 40 years.

Ken owns Ken DuVall & Associates, Realtors at 3rd Ave. & Mangrove in Chico. Ken was the 2001 President of the Chico Assn. of Realtors and the 1995 Chico Realtor of the Year. See Chico MLS listings at http://www.kenduvall.com/ and call Ken at 345-3700 for all your real estate needs. Free consulting.

Copy for Real Estate Guide Column for 8-12-05 (485 words)

REAL ESTATE PATTERNS
By Ken DuVall

RECORDS SMASHED AGAIN

Existing home sales nationally hit another record in June with prices zooming at the fastest pace in 25 years. Projection: a record 8.7 mil sales this year. 2004 record: 6.78 mil. New home sales, 20% of the market, increased 14% over a year ago, another record. Both categories have set records for 4 straight years; figure on another record in 2005. Single family construction should hit 1.69 mil units, another record. Builders are careful this time not to get too far ahead of demand. Unlike the meltdown of the early 90’s, they won’t build now unless they have a sale. California’s median zoomed 16% to $542,700 over a year ago. The Inland Empire, Riverside-San Bernardino, 60 miles east of L.A., is sizzling with an astounding 305,000 new homes/lots in the pipeline. In every month this year the forecasts fell below the actual. Several So Cal area medians are $1.5 mil. Only 16% of Californians can now afford the median price. I’ll guess with you. It ain’t over yet, folks.

The national median is now $219,000, a gain of 14.7% over last year. Just when we think activity is ready to settle into a sustainable pace, the market continues to surprise, underscoring the value of housing as an investment. People are still saying, “I’ve got to buy now or I’m never going to get a house.” But sales momentum and price appreciation will taper as the market comes closer into balance, not expected now until year-end 2006. Last week, of some 204 active Chico listings, the median was $411,450, the average, $506,800. Whew.

YOU THINK IT’S BAD IN CHICO!
In L.A.’s super heated housing market, tiny run down houses are going for over $500,000. It’s shocking when the house you bid on has 50 offers, listed at $549,000 for a 2 BR 1319 SF hovel with crayon markings on every wall like cave drawings, clutter and piles of dirty laundry everywhere. True story: A couple decided to offer $81,000 over the ask. They included a letter about themselves accompanied by a photo of their 5 baby, a not uncommon device to sway sellers. They came in 2nd. It sold for $670,000.

LET’S TRY AGAIN
They were resigned to becoming the owners of an expensive glorified box. Finally they found a larger home, still in need of TLC, an acronym for “tons of loose cash.” They overbid again. Meanwhile, the listing agent mentioned an open house at the neighborhood elementary school. “At this point, we were desperate to stop the insanity, so we went and ran into the sellers as schemed. My husband muttered something about stalking being against the law. I felt like a ‘Desperate Housewife.’ The next day our Realtor called and said if we raised our offer $7000, (we did) the house was ours. The sellers were debating between us and another couple, but they liked us better! Game over. Thank God.” Gimme shelter!!

Ken owns Ken DuVall & Associates, Realtors at 3rd Ave. & Mangrove in Chico. Ken was the 2001 President of the Chico Assn. of Realtors and the 1995 Chico Realtor of the Year. See Chico MLS listings at www.KenDuVall.com and call Ken at 345-3700 for all your real estate needs. Free consulting.