Although the current market in the Brainerd area is better for a buyer coming in than it has been for years, many buyers are still out there trying to time the bottom of the market. They are afraid to pay too much. In giving this topic considerable thought, the following thought arose.
Years ago Sherri and I were in Santa Fe, New Mexico and ventured down into their market district, kind of a town square in the old part of town. Beautiful shops with custom jewelry, original artwork from the area, unique clothing stores with product not found anywhere else...you get the picture. We also found the best gyro sandwich we have ever had that was prepared from a street cart similar to the hot dog carts out east, but I digress.
The thing that struck us odd was that most of the stores had huge signs in their windows toting the benefits of "Huge Sales", 700% Off Today Only, etc. etc. This was in May or early June as memory serves so it certainly should have been "tourist" season and not their off season.
What we ultimately deduced was that the "sale" prices probably were at about what the market should bear. Anything more than that could best be described as frivolous or highway robbery if you will. But the message that was being conveyed was that the prices were extraordinary, and that if you saw something that you liked you ought to act fast.
We are now seeing this in the values of real estate in the Brainerd market. Savings of 20-50% or more off of original listing prices are not uncommon. But if you pay $300K for a property that was listed at $500K that is probably only worth $300K, is it a better value than paying $300K for a listing that is worth $300K? It is an interesting question. The difference between Santa Fe and our local market is somewhat different however as in many cases the sellers in today's market actually paid much higher prices 2-3 years ago. The prices during that period were justifiable and there were appraisals that verified those values. But like in any market, prices don't always go up. If you don't believe that check your 401K balances. But just like the stock market, there becomes a point where prices become so good that you can not help but to buy. Warren Buffett said late last year one of the secrets to his success was, "Be fearful when others are greedy, and be greedy when others are fearful."
The key to it all is to first narrow the search to the type of property that one wants. That in itself is a substantial undertaking given the amount of inventory that is available. Once that is established, the next step is to then determine out of the list which properties are the best values compared to the rest. Experience shows that if these steps are followed the best available property will be readily identified. That's where I come in. We will spend the time to go through this process and figure out which ones are the best deals. And they are out there.
Once the decision has been made to get into the market, rest assured we will find a "deal".
Stay Warm!
Greg
Greg
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