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Week of January 29th - February 4th
Property Tips and Tricks
Real estate reframe: control before you buy
Imagine this: You’re dining with loved ones or friends, and they share thrilling news - they’re buying a home! The excitement of an accepted offer often leads people to believe they’re already homeowners, just waiting for the keys.
However, this mindset can cloud judgment during the crucial ‘due diligence’ phase. This is when potential buyers should objectively assess the property, replacing assumptions with facts. If they’re already envisioning their decor in the living room, their subjective mindset can influence decisions and interpretation of new information. It’s vital to stay objective until due diligence is complete.
Entering a real estate agreement doesn’t mean immediate homeownership. Instead, you’re reserving the property, taking it off the market at a set price and for a set period. During due diligence, your main task is to replace initial assumptions about the property with concrete data and information. This could involve inspecting the property’s condition, reviewing legal documents, checking zoning laws, and more.
After gathering this information, you revisit your initial assumptions. You compare your initial thoughts about the property with the information gathered during due diligence. This comparison informs your decision on whether to proceed with the purchase.
Until this point, it’s beneficial to view yourself not as a buyer, but as someone controlling the property. This mindset can help avoid confirmation bias, a psychological phenomenon where people favor information that confirms their existing beliefs or hypotheses. For instance, people often identify with news stories that align with their views, leading them to believe those stories must be true, which isn’t always the case.
By maintaining the mindset of a controller rather than a buyer during due diligence, you can more objectively assess the property and make a decision based on facts, not assumptions. This approach ensures your decision to buy is grounded in reality, not influenced by confirmation bias.
Featured Property
CARMEL VALLEY
26165 Rinconada Drive
5 BD 5 BA 5,300 SF $4,400,000
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Real Estate News
Sales and inventory update
As 2024 dawned, a renewed optimism swept across the country. The markets were thriving, and home prices had risen by 6% year-over-year, surpassing many expectations.
Nationally, the active inventory of homes for sale in January 2024 was up 8% compared to January 2023, but still 40% below pre-pandemic levels. Locally, in Monterey County, the active inventory rose by around 4.8% in the same period, but was still down by around 42% compared to 2019.
The number of transactions in Monterey County for January 2024 was 324, lower than the 384 in 2023 and significantly less than the 713 in 2019 (single family residential homes).
Interestingly, while the median list price in 2024 here in Monterey County increased by around 8% compared to 2023, the median sale price saw a more significant jump of 15% in January 2024 compared to January 2023. This discrepancy could be due to a smaller sample size leading to greater variance. More importantly, it is likely due to owners of less expensive homes being priced out of moving due to high mortgage rats, leading to fewer transactions at the lower price points, lifting the median sales price. This trend, often overlooked in news reports, suggests that rising median sales prices don’t necessarily indicate a stronger market.
In other developments, hopes for a near-future rate cut by the Fed seem to be fading. The Fed is looking for more evidence of a sustained downward trend in inflation before considering a rate cut.
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Jonathan Balog
DRE# 01980970
Broker
M: 831.747.0310
[email protected]
Compass is a real estate broker licensed by the State of California operating under multiple entities. License Numbers 01991628, 1527235, 1527365, 1356742, 1443761, 1997075, 1935359, 1961027, 1842987, 1869607, 1866771, 1527205, 1079009, 1272467. All material is intended for informational purposes only and is compiled from sources deemed reliable but is subject to errors, omissions, changes in price, condition, sale, or withdrawal without notice. No statement is made as to the accuracy of any description or measurements (including square footage). This is not intended to solicit property already listed. No financial or legal advice provided. Equal Housing Opportunity. Photos may be virtually staged or digitally enhanced and may not reflect actual property conditions.
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