Saturday, January 9, 2010

Palo Alto Market Update, Jan 7th: Single Family Homes


49 Active Listings
32 Pending Sales
As 2010 begins we have very little inventory, interest rates are not too bad, and housing prices are probably close to 20% lower than at this time last year. So what's the difference between now and other times when inventory was this low?

Let's start with the similarities. If a house is priced very low it will get multiple offers. There was a house on Bowdoin that listed for $728,000 and got 21 offers. It sold over $900,000. I don't know the final price, but I have a client who offered over 900K and that was not the highest offer. The house was probably worth $850-900K but pricing it so low incited a feeding frenzy that made it sell higher than what I think it was worth. This isn't my idea of how to sell real estate. Call me lazy, but I have no interest in dealing with 20 offers, and it is such a waste of time for so many people. Nevertheless, it's still true that a home priced way below market value will get many offers.

But what about the other homes on the market? This is not 2007, even though the inventory level is similar. Money isn't too expensive, but it's still not easy to get. Down payment and reserve requirements are high, banks are tight fisted with our bail-out money, and appraisers are tight on their appraisals. It's not uncommon to have an appraisal come in 10% less than what experienced realtors think a house is worth. Buyers don't have irrational exuberance and are definitely not jumping at any house in their price range that fits some of their needs. They want value for their hard-earned and ever harder to obtain financing. Job security is non-existent for many people. I think this will be an active year in Palo Alto real estate, with more homes changing hands, but I don't think there will be a lot of appreciation. And of course, as I have been saying for months, the over 2.5 million segment has not hit bottom 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
650-619-9285
DRE 01191194

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