Real Estate Prices Rising Again

Wednesday, March 31, 2010:

Well, it’s begun!

For months, I’ve been banging away on this blog, trying to convince you that the market is ready to turn north – that now is the best time to buy – that prices are at their lowest.

Yesterday, we closed the first full-price sale in almost two years. The buyer of this 99-acre parcel recognized the good deal when he first saw it, and wouldn’t let up until he owned it.

From the time the purchase contract was signed until the transaction actually closed took only 4 days – and the seller received his FULL ASKING PRICE – $595,000!

Just take a moment to think about the pricing that occurs during a down market – a recession. Prior to the beginning of a recession, asking prices rise higher every month. As an example, the average per acre asking price for 100+ acres in Watauga County in October of 2007 was $23,506. By September of 2008 (even after the recession began) the asking price rose to $40,576. Even though land buyers had long since abandoned their search for reasonable prices, Watauga County hit the all-time high asking price of $42,711 for 100+ acres of raw land in March of 2009.

OK – so rapidly rising prices precede a recession and even continue well into a recession. They are then followed by a period of reduced prices, however since serious buyers have already fled the market, those reductions aren’t enough to restart the land market.

Eventually, prices return to a normal level, however buyers continue to keep their distance because it takes many months for the word to get out that prices are “at the bottom”. During this period, a few investors begin to make low offers in attempt to buy at below-market prices. Most of them fail because owners are not yet ready to go lower.

Finally, the first sales at a fair price begin to return in the form of full-price offers. That is where we are today – finally. Most land is priced fairly at or below the pre-recession price range – and that’s when rebounding full-price offers encourage sellers to begin the cycle again – by raising their prices.

Were you one of the serious buyers who was shut out at the beginning of the recession by those high prices? Are you willing to act now – or will you miss out again?

Seriously, it’s decision time! Take a look at our website right now  and then give us a call. We’ll wait!