“The real estate market is hot."
“How hot is it?”
"It’s so hot that…”
Okay it’s an old shtick, and you can write your own punch line, but my ending to that set up comes pretty close to home.
My nephew James Flores, who just happens to be a very talented information technology professional and Marketing Director for Rancon Group, was looking to buy his first home. Coming from a family, and extended family, of real estate professionals, and of course working for an affiliate of the most successful real estate company in the Temecula Valley, you’d think James would have a pretty good chance of landing the house of his dreams. You’d be wrong.
Today residential real estate is so hot in the Temecula Valley that every resale home coming on the market has multiple buyers within days, or even hours, of being listed. My friend and cohort Mike Diaz at Rancon Real Estate says there are typically five or more buyers for every single home. They’ve had as many as 30 buyers making offers for some listings, and many of the offers are all cash!
While that is all good news, and what we live for, this quickly moving upswing is having some repercussions in the market. Appraisal contingencies are out. In fact, appraisals are pretty much out. Houses are being sold before the appraisal comes in, and the prices are changing so fast, today’s appraisal is tomorrow’s low bid.
Make no mistake; it’s now a seller’s market. In fact, today’s market for single family homes is so competitive that it is driving buyers to the new home market, where new development phases are being swooped up as fast as they come on the market.
Good luck if you’re an average homebuyer looking to buy using conventional methodology. You’ll need to have everything in order and be willing to bring extra cash above the appraised value, and you’ll have to be lucky.
Take James for instance. He started out looking for an existing home or condo in the Temecula-Murrieta area. He had a nice budget with his financing approved, and a solid down payment in hand when he started looking.
Now James, as mentioned, has a leg up on most buyers, and he’s no slouch when it comes to searching for deals and working them online. He began by finding, and making offers on three existing homes, all of which he “really liked.” All three were snatched up by all cash buyers. He decided to try the new home market to see if he’d have better luck.
He visited four new home projects with new phases coming on the market. On one Saturday, he found a nice project by Lennar with four new homes about to be released. By the time he finished walking through the model, all four were gone. Another new home project sold nine homes the same day they were released. In yet another development he visited, he managed to get on a “waiting list” with more than 30 buyers in front of him.
He’d almost given up when he came to an excellent project known as “Paseo,” by D.R. Horton. Of course, we (Rancon Group) have a history with Paseo. We acquired that property in 2009, and sold it to D.R. Horton in 2011. That’s a success story for us as well as D.R. Horton.
James just happened to visit Paseo on a day that new homes were being released and there was one left when he walked in. “Both the lot number and the phase number were my lucky number,” he said when he told me. So James was lucky. He was in the right place at the right time and he had the leverage to seal the deal.
James is scheduled to move in his new place in late June or July and is very happy. And, I have a lot of friends in brokerage who are also very happy with this escalating market. In fact, I too am a happy camper because I have no less than a dozen extremely viable projects in the pipeline for merchant builders looking for an opportunity in Southwest Riverside County.
So, how hot is the real estate market for single family homes in Southwest County? It’s so hot that….
PS: If you are not in, you need to get in. You need to grab good representation by a full-time professional real estate expert, from Rancon Real Estate, and you need to get your finances in order with a quality loan broker. Yes, this market is hot and if you don’t get in now, you may get left out in the cold.
By Jim Lytle