There are a lot of games being played right now with sales concessions in the form of closing costs and cash back to buyer. The number of true bidding war situations that are occurring right now are few and far between.

Let’s say I’m appraising a property and I have a dozen sales to analyze as potential comparables. If 10 of the 12 show one trend and the 2 “overbids” with 100% financing at the overbid price show a different trend, to which trend do you think I give more weight? If for some reason I am compelled to use a sale that included such concessions I adjust that sale for the financing terms, so it ends up reflecting the prvailing trend anyway.

Let’s think about this logically. Why should there be ANY overbids in this market? Sales volumes are down by 15% compared to the same period last year and inventory is just about as high.

It’s not like there’s any shortage of listings out there; and in most areas (including Carlsbad and Encinitas) that includes foreclosures, short sale, and other “must-sell” listings. There might be a couple holdout pockets of move-up homes in Scripps or Poway where buyers think they need the schools, but in the end they still have to make those decisions against the backdrop of the economic conditions present in the region.