On 1/31/09 I wrote the following blog:
There has been a lot of speculation about what will happen to the market in Palo Alto. Will it drop 30%, drop 10%, improve in 6 months? Most of the argument against Palo Alto having a lot more decrease in home value, is the thought that most people here did not get bad loans and therefore do not have to sell. If most people don’t have to sell, the prices should not go down too much, but if more people selling do have to sell that would bode for sharper decreases. I thought it would be interesting to see as best I can, who is selling. I have broken the listings up into over 2 million and under 2 million for the asking price and put the listings into the following categories:
I am updating this on 4/12/09 The numbers on the left are from 01/31/09 and on the right are from 04/11/09
Over 2 Million:
- New construction 16 New construction
- Vacant
6 Vacant
- Owner occupied 20 Owner Occupied
- Short Sale (this is also new construction but I put it in short sale) 1 Same house on Kingsley
- Rental
0 Rented
- to be built 2 To be built but has structure one of these is the same
0 Bank owned 0
Under 2 Million:
- New construction 12 New Construction
- Vacant 32 Vacant properties
- Owner occupied 32 Owner Occupied
- Short Sale 0 Short Sales
- Bank Owned 0 Bank Owned
5 Rentals 10 Rentals
1 Stanford property 3 Stanford Properties
On Jan 31st I wrote these comments.
So what does this mean? Quite frankly I am not entirely sure, but I believe that new and vacant properties are likely to have more flexibility in pricing than owner occupied homes. The one big exception to that rule would be short sales, but as you can see there is only 1 in Palo Alto. There is a much higher percentage of new and vacant homes in the listings over 2 million, so maybe it means there is more room for prices to drop in this segment. We’ll see. I will keep you updated about who is selling over the next few months and how that may relate to what the market is doing.
My thoughts today:
The inventory is almost double what is was in Jan. but the increase has not been entirely across the board.
Over 2 million the number of new and vacant homes has gone up a little, but not doubled, but the number of owner occupied homes has almost tripled. The common wisdom is that if you want to get the most for your home, don’t sell now. My guess is that at least some portion of these people have to sell and we may some short sale activity or just more price flexibility in this segment, although I am not predicting a huge wave here yet.
Under 2 million there is a doubling of rental, owner occupied and vacant but not new construction. A lot of the new construction in PA is in the townhouse classification so not part of my analysis.
Although the numbers do not point to it currently, I think that we are going to see some short sales in the under 2 million range also. My rational for this is that it is more likely that the newer (last 10 years ) owners of these properties have loans, or have re-financed. 54% of the US homeowners owe more on their homes than they are worth. Some of those people have to live in Palo Alto and some of those people will have to sell for a variety of reasons including life changes, job changes or losses, family issues. If they need to sell they will need to sell short. The thing to look for will be a big spike in owner occupied homes for sale compared to the relative number of homes for sale.
Another group of short sellers could be builders who can’t sell and can’t make payments. We may see more of those in the over 2 million market, but it hasn’t happened yet.
If you are interested in finding the final selling price of any home, anywhere, you can do it on my web site. Go to www.marcymoyer.com and click on Cyberhome Home Valuation. You can then type in any address next to the search icon and get the county records.
If you need anything else please feel free to contact me. I am here to help you.
Marcy Moyer Intero Real Estate
marcy@marcymoyer.com
650-619-9285
www.marcymoyer.com
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