After a tumultuous 2005, what can we look forward to in 2006? Of course, nobody truly knows what will happen but let's play anyway.
I think we can be fairly sure that multiple, over priced offers are probably a thing of the past. Last year was very definitely a sellers market and I think 2006 will return a balanced market; one that is fair to both sellers and buyers. This means that buyers will have the luxury of being able to look at several homes, sleep on it, and being able to make a decision without feeling pressured.
Here, in Arizona, pundits are predicting continued appreciation but in the single-digit range. Largely, I agree with this, but I also think there are a few areas, and no I won't name them, that will see small declines. These will be areas with a large percentage of investor ownership. Many have made a 50% return in one year, and likely will be happy to give back a little of that in order to liquidate that investment. Some homeowners in those areas have moaned that investors are "dumping" their properties and are hurting values. This isn't really true. The reality in some cases is that if you live in a community where there are, sometimes, hundreds of similar properties for sale, the investor may sell into the "curve" for a speedy sale. These are in no way "fire sales" and reflect the prices achievable, today in a balanced market.
So, for sellers, you may have to give a little back but you already gained so much, so what? For buyers, a return to normalcy which, for many, means the train hasn't left the station after all.
So, it's good news for everyone.
Happy New Year!
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