The problem in PB that I am seeing is that sellers are either ignorant or in denial about the reality of the ongoing crash (price correction). Why is this? I think it can be partly explained by the fact that there is little if any new development in these areas, and most sellers have lived in their homes for many years and are not in desparation sale situation.
An example, just talked to a neighbor in my complex in PB and found out they are moving and about to list the property. They have owned since the complex opened in the 80s so they little or no debt on the place. I asked them what they plan to list it at and the price range they want is higher than any of the comps for this complex, even than the units that sold in 2005, at the market peak.
I politely informed them that this would be challenging given the market correction, but they said they won’t settle for less as they have completely re-modeled the place. Clearly they have no chance to get anywhere near their asking price. Anyone who reads the paper can see that median prices are down 20% since the peak. So how can people rationalize asking higher than peak prices given that the market has dropped 20% since then?
Ignorance or denial. These owners that aren’t in a desparation sale situation continue to be stubborn trying to hold on to the past (everyone seller wants it to be 2005 again). That is why we see such high asking prices in PB. But, it doesn’t change the reality that real values are dropping everyday and sales prices are reflecting that.
