Real Estate Article: Response to the Market Decline
06/15/2004

     Recently, there have been changes in the estate market. These changes include a tremendous increase of estates on the market and a decrease of demand and leads me to believe that the estate market is going to turn its good forecast. Currently, there are 256 Chino Hills estates, 250 Diamond Bar estates on the market. I believe there will be an increase of over 250 estates, and at the same time, the number of buyers has decreased. Between last March and September, the transactions within Chino Hills exceeded 100 estates; however, this year there was an average of only 70 estates. The reason there are fewer buyers is because the prices of houses has gone up. The median price for estates is currently $450,000 and affordability for homes at that price is under 20 percent. Keep in mind that $450,000 is the median price. What about estates that are more expensive? $500,000, $600,000? That would definitely make affordability well under 20 percent if not under 10.

     Chino Hills' housing market began to change in May and continued to change throughout June. In surrounding areas such as Diamond Bar and Walnut, the market changed a little bit earlier. Additional information on the situation of the market can be found on my website. With greater knowledge on the real estate market, it is an experienced agent's duty to inform his potential clients and the sellers out there about what is happening in order to prevent them from making the wrong choices. If your house is currently on the market it is best that you take time to consider whether the price on your house is suitable for the environment at this time. From June, the number of sellers is constantly increasing and the number of buyers is constantly decreasing. This is because buyers noticed the constant decrease in prices and were worried that they might buy a house that eventually dropped even more in price and backed out from the market. With the decrease in buyers, I predict that only around 60 houses will be sold this month but currently there are 220 houses listed. This means that only 1 out of every 4 estates will be sold. If you want to have a successful transaction, you should reconsider your price like I mentioned earlier.

During the change in the market, you have a few options to consider:

1. immediately adjust your asking price to one that can sell, the faster you can sell your home the better
2. adjust your asking price to the lowest price acceptable to you immediately, if you are able to sell it then good, if not than try another time
3. temporarily leave the market and avoid the competition, wait for another season.

Some individuals may ask, What if I decide not to sell anymore, when will be the next hot season be.

Please refer to the diagram below.

References from the graph:

1. The last the market peaked before earlier this year was 1989 which means that there is a span of 15 years between peak. Can you predict when's the next time the market peaks?
2. Two years before and after the peak had the greatest impact on the increase and decrease of prices
   Between the peak to the lowest price range was about 7-8 years.
3. If you are currently selling your house, you are at “point a” on the graph. If the market will gradually fall and rise back up as I predict, you will not be able to sell your house for the same price as now until "point b" in the year 2017.

     From the information above, I hope to give you a better idea of what is happening in the housing market so that you can make a proper decision regarding your house. If you are a seller who is determined to sell your house at a set price, yet unable to achieve it, you can wait to sell your home. However, if you are a seller trying to bring in the money quickly for either profit or any other reason, the prices have only gone down a little from the peak, sell your home as soon as possible.

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