Real Estate Appreciation or Price War

Paso Robles Home

Paso Robles Home

I feel like I’m back in  the earlier part of this century, when every time we listed a house for sale, we priced it $5000 higher because of the real estate appreciation that was happening daily.   And if we didn’t price it high enough, there would be a price war with each offer coming in, higher than the last.

Case in point, I recently wrote an offer for a new listing in Paso Robles and found out that it all ready had 4 offers on it with another one on the way.  When I am helping my clients compete for a house they really want, we have to go over the list price.  But how high is too high?  It’s like a silent auction.  The buyer has to decide how much they want it, and based on their recently acquired knowledge of the market , they have to determine a price that is over list but not out of line for appraisal purposes.

So this particular client wrote an offer about $35,000 above the list price, and barely won the house!  Isn’t this a price war?  Homes did in fact appreciate last year in our area about 6%.

But why is this market so different now, than in 2004 -2006?  Buyer are hungry to buy.  Interest rates are amazing.  But in 2004 -2006 two things were different.  We DID have houses to sell, and the economy was booming!  So despite the real estate appreciationwe are really beginning to see, things feel very different.

Wish I knew where this was all going.  All I can do is write about what I see and share it with you.  But if you can buy a house you like in this market, for a price you can afford, buy it!  Real estate appreciation will come and go, but the right house does not always present itself.


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