I echo what xboxboy said. His points apply to RSF as well from what I can tell. RSF is not immune to the downturn. Homes have sat on the market for quite a while longer than last in recent years and many are selling for below asking. Inventory is very high RSF currently has 17 months inventory.
But, while many homes have seen price drops by as much as $1 million, many sellers will not lower their prices one penny. What I have encountered is many sellers who can afford to wait. I have seen homes that have been empty for quite some time or that are vacation homes in RSF (4th or 5th homes) with sellers who can afford to hang on to them. Many sellers are just not that motivated and take forever to get back to you on a question. I have found a few selling agents frustrated by unmotivated sellers.
But I have also seen sellers indicate they will not budge on price, only to see the price drop considerably after a few months. So it does pay to wait. Somebody eventually blinks.
Time and time again, I do hear from selling agents that RSF is “immune” from the downturn. This is just not so. Prices have come down considerably in Fairbanks Ranch, Cielo, and other parts of RSF, but there is indeed a great variety of homes and if you find the one you want, the seller may not budge on price and you will just have to pass and wait for another one where the seller will be more motivated.
A high inventory of a lot of different houses is very different from a high inventory of houses that are close substitutes for eachother.
The same thing is happening in high end markets up here in the Bay Area, like Los Altos Hills. Many sellers stick to their prices and don’t mind 400 days on market. After all, I will not be selling my current house in this market. I will be renting it out.
So I am playing a waiting game with the sellers. Who can wait the longest? My wife wants to be moved into a new home by Thanksgiving of 2008. I want to wait until 2009. Sellers may want me to wait longer. There is nothing in the current inventory in my price range that gets me all excited so I can wait. Time will tell.
