2006 offered some interesting challenges as the market changed. Here is an overview of my opinion of why the market changed.

First; Investors left the residential market. Investors made up 28% of the residential market in 2006. That helped slow appreciation.

Second; Builders left with inventory on their hands started offering buyer incentives from $30,000 and up. Important to homeowners, builders started to pay from 3% to 6% commission for a buyer to local Realtors. Needless to say agents pay attention to 6% for the buying side of the transaction.

Third; Many sellers thought they were exempt from the market place, and held out for unrealistic asking prices. This resulted in a larger number of homes on the market. The actual number of new listings going to market in 2006 were near the same in the Inland Empire.

Fourth; We have had loan programs become available that were unavailable just a few years ago. Today it is possible to buy a home for less money out of pocket than rent for a comparable home.

Fifth; The news media turning negative about the market place. Need I say more? Remember this is the same media that helped create the huge appreciation in home prices in the last 5 or 6 years.

Now for what to expect in 2007.

Late payments, Notices of Default and foreclosures will start to surface. Lenders will add more requirements for loans. Interest rates will rise, but not by much.

The new element here is the price of gas. It is as important as interest rates, maybe more important,  and certainly more volatile.

The market should remain at current levels because as foreclosures increase, investors will return to the market.

Here at Coldwell Banker Kivett-Teeters, we have positioned the company to offer more services in 2007. Customers want more time saving services.

We have had mortgage, escrow and commercial real estate services for a number of years. We will add insurance and property management services as well as a pre-sale “fix up” loan program with no loan payments until the close of escrow. Of course there are other conditions on these loans.

With a stabilizing market and expanded services we are excited about 2007.

If you have any questions or comments on this blog, e-mail me at gteeters@coldwellbanker.com.