3 Strategies for Setting Your Costa Mesa House’s Asking Price

Selling your Costa Mesa house for the best price sometimes involves a certain amount of luck, but it’s the kind of “luck” that’s a lot more likely when you’ve set out the welcome mat for it. In addition to strategic home preparation and a solid marketing push, selling your Costa Mesa house for the best price also has to do with where that price starts out: that is, the asking price.

Once you have a clear idea of the professional opinion of its market value—that is, a price that aligns with the latest comparable sales data for similar Costa Mesa homes—you have three alternative strategies:
You can set an asking price as close as possible to what the comps suggest. After all, it’s reasonable and defensible—and lenders are likely to agree if a home loan becomes a contingency in the final sale. A possible downside is that it will be more difficult to stand out from the crowd since many comparable properties may be priced at the same level. It can also prove necessary to compromise with buyers who assume any asking price is an opening bargain position.

Or, you can set the asking price higher than what the comps indicate in the hope that a buyer who isn’t too economy-minded will fall in love with your place—or the strategy might be to make a final agreement more likely by leaving room for negotiation. The downside is that if a sale fails to materialize, lowering the asking price later can be costly: those reductions (especially multiple reductions) are like properties that linger on the market for a long time: they suggest that something is wrong (even if the only problem was the asking price)..

Alternatively, you can set the asking price lower than have comparable rival properties. The strategy here is clear enough: the expectation that serious house hunters will become interested. Very interested. Fascinated, in fact—especially in a market where supply is tight. The most serious prospects—the ones who know the market—will be expected to hurry to beat the others to your door. In the best case, this can result in a bidding war, resulting in higher-than-asking offers.

Selling your Costa Mesa house for the best price has another proven hallmark—one I’m pleased to pass on. The median selling price for homes sold with the assistance of a Realtor® like me is significantly higher than for those where the owner decided to go it alone. Currently, the final sale price averages $59,000 more for the typical home sale (per the NAR). For Costa Mesa sellers interested in getting the best price, the implication is clear: call me!

“Last Call” to Buy Your Huntington Beach Home?

The question posed in last week’s Realtor.com article was certainly scary enough: “Is It Last Call for Low Mortgage Rates?” If you have been putting off getting ready to buy your next Huntington Beach home, it could well have been a potent call to action. For the normally staid Realtor, it was an unusually pointed dispatch.

The article’s opening line, “All good things come to an end…” is what many Huntington Beach home loan rate watchers have known to be true enough—yet for years now, when it comes to the financial benefits that accompany low mortgage interest rates, the prospects for losing the resultant buying power has seemed to be a distant threat. But although by historical standards, Huntington Beach mortgage interest rates are still relatively favorable, the drift is clear: that advantage is rapidly slipping away.

“After hitting historic lows,” author Chris Parker writes, “average mortgage rates” have already climbed to peaks not seen since 2014. Even more alarming for prospects preparing to buy Huntington Beach homes, there is ample reason to suspect more hikes are on the way.

After referencing new Federal Reserve Chairman Powell’s expectation that the Fed will “gradually” increase rates, the article raised the immediacy quotient several notches. According to the author, “it is expected” that there will be no fewer than three rate hikes this year—possibly even beginning “this month.” The suggestion that it is “unlikely” that rates will go into “the double digits” may have been meant to be reassuring—but for those with long memories, probably accomplished the opposite.

Still, amid the abundance of disquieting data points, a few moderating notes could be found. A Freddie Mac economist was quoted as saying that “the levels of 10 years ago” (mid-5% to mid-6%) aren’t likely to be reached because “too much has shifted economically.” And, “it’s important to note that mortgage rates are still low.”

For those planning to buy Huntington Beach homes this season, the message was clear: locking in a mortgage rate sooner rather than later is undoubtedly the better part of wisdom. A corollary would also be that it’s high time to locate your future Huntington Beach home—which also makes it high time to give me a call!

National Home Prices Jump 37% Since 2014

When Fountain Valley homeowners sit down to plot out their household’s long-range financial plan, the value they ascribe to their Fountain Valley home usually deserves a leading role. As research firm Pulsenomics puts it, “changes in single-family home values can have profound impacts on consumer balance sheets.” Yet it’s often the case that homeowners assume that their home’s value is its apparent equity—the home price they paid less their mortgage’s remaining principal.

Fountain Valley homeowners will be pleased to find that using that measure is almost certain to result in a substantial underestimate. Since the historical norm is for residential home prices to rise, if you are trying to plot a realistic long-term picture of your family’s financial future, a middle-of-the-road estimate would take those likely price rises into account.

The problem is: who knows how much those values will actually rise? For instance, what if there were another international financial meltdown—with a real estate slump like the last one? Wouldn’t it be safer just to assume the worst—static Fountain Valley home prices? Safer, perhaps—but not likely more accurate.

For the most sophisticated projections, a better look at the direction of home prices is published quarterly in Pulsenomics’ “U.S. Home Price Expectations Survey.” The Survey represents the combined opinions of more than 100 economists, investment strategists, and market analysts. They have been publishing those projections for five years now—which is noteworthy since we can now check back to see if they were overly optimistic (or the opposite).

In January of 2013, the mean expectation of the Pulsenomics experts was for a 5-year increase in home prices of a whopping 22.0%. That number seems pretty optimistic, and sure enough, a year later, in 2014 the experts dropped it to a more realistic 19.7%. The following years showed similar moderation, until by this January, their median prediction was for U.S. home prices to rise by 18.2% by 2023.

Of course, nobody can know exactly what the future will bring, so holding their feet to the fire and expecting exactitude would be unrealistic. But how did they do? drumroll, please:

As for that first 2013 seemingly over-optimistic expectation of 22%: the actual rise in home prices has been 37% (the Case-Shiller national average)! We’ll have to wait a bit to see how the next year turns out…but I think we’ll have more terrific news.

The long and the short of it is that for practical planning purposes, don’t assume your Fountain Valley home investment will be wind up being worth what you paid (or will pay) for it. Realistic expectations can be quite a bit sunnier—and definitely, a solid reason to make Fountain Valley homeownership a cornerstone of your family’s long-term financial future. To get started turning that goal into reality, please don’t put off giving me a call!