Wednesday, May 13, 2009

Housing Market Update and Just Listed!

The real estate economy doesn’t care about Swine Flu! Last Saturday I planned to show a buyer 7 properties, and upon further investigation, one had 4 offers, another had 15 offers, and yet another had over 30 offers. The trends that I watch on a weekly basis support this. Santa Clara County had 580 homes come off the market and go sale pending last week. We haven’t seen a number that high since May of 2005, and we all remember what was happening at that time, multiple offers resulting in major amounts of appreciation. Below is my previous prediction from April. Also, please pay attention to the market stats I have posted!! 3 of the 4 data points I follow are on the rise - home prices are rising!

I just listed a 5 bed 4.5 bath home for sale this morning for $1,149,000 in Cupertino. Click on to see more about this great home. In 3 hours I received 3 emails and 4 phone calls requesting more information about the home. The activity is really high, even in the higher price ranges, when the home is priced well. If you want to see this home I will be holding it open this Sunday from 1:30 to 4:30. If you find yourself in the neighborhood stop in and say “Hi”.

Previous Prediction: The buying trend is going to continue, as long as interest rates stay as low as they do. Properties below 650K are going to see many many more offers and even the ugliest ones will start to get purchased.

Recap: The market has changed. This month the median price for homes below $1M in the county have risen by over 4%. Time on the market has continued to shorten. Below is the updated chart of sales in all cities East of Highway 880. Now we have seen 9 consecutive months of demand exceeding supply.

For Comparison: Here is the exact same chart for cities West of Highway 880.

Prediction: Inventory is going to continue to fall, as long as interest rates stay as low as they do. Well priced properties in the higher priced markets are now going to begin to see more activity.

What’s driving the markets:

· Interest rates are at 40 year lows!!!
· Buyers are getting concerned that the competition is going to be too high now that signs of economic recovery are in the midst
· Majority of short sales have now become “Bank Owned” which are much easier properties to purchase
· Dow Jones Industrial Average has risen about 2000 points to 8,500, which is bringing back people’s down payments

Scared to buy because you fear losing your job? Consider this:

1. You always have to have a place to live.
2. Even if you are laid off, you will still have to pay rent.
3. If you miss one rent payment, you may be evicted.
4. If you are evicted, you may not be able to easily rent again.
5. If you miss 1, 2, 3 or more mortgage payments, you still stay in the house.
6. If you are laid off and get another job, you can pay the missed mortgage payments.
7. If you use your saving to pay for rent, it’s lost money you’ll never get back.
8. If you use your saving to pay mortgage, you continue to build equity.
9. Most likely you will not qualify for a loan after layoff with no income.
10. It may be difficult to qualify for a mortgage when you get new job.
11. Mortgage interest and property taxes are usually deductable, so it may be same as rent.
12. Rent usually increases every year. Mortgage payments stay the same for 30 years if a fixed loan. Even if current mortgage payment is higher than rent, most likely the future rent increases will catch up to mortgage payments, and eventually may be higher.
13. You can borrow against equity built up.
14. Increases your net worth.
15. Future long term appreciation of home.
16. You are in control of where you live. Landlord cannot give you 30 day notice to move.
17. Quality of life will be at its highest point when you own. You may make any changes to your home with minimum restrictions.
18. Pet owners may have any legal pet without restrictions.

" You have to have confidence in your ability, and then be tough enough to follow through."
Rosalynn Carter (1927 -)
Enjoy the rest of your week and if you know of a friend, co-worker or family member who really wants to buy a piece of property and needs some sound advice let me know. You can count on me to provide it.

The table represents aggregated values based on MLS data for the specified date.