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What I Learned About Real Estate in 2009

I want to start by thanking all of you who have read my blog. So far no corporation has contacted me to ask to advertise on my site because of my incredible readership, but enough of you are reading and commenting to make me feel as if my efforts are worthwhile, so thank you very much.

2009 has been quite a year for real estate. Silicon Valley has seen some changes that many people never saw coming. While some cities were not hit by huge waves of foreclosures or short sales, no place was immune from a drop in value. At the start of the year mortgages, particularly jumbo mortgages were hard to get, but that has passed. While we will never go back to the days where the qualification to get a mortgage was a pulse, there is money available for people with provable income, down payment, and credit. In many areas a flood of foreclosures caused a huge drop in value, followed by a wave of cash rich investors buying up property and the return of multiple offers for well priced homes. In Palo Alto we saw a slower drop in prices, a big increase in inventory, followed by a drop in inventory and now a more balanced market.

I have personally experienced a very different kind of buyer and seller this year, and a change in what is expected of an agent. Some of my personal encounters with buyers:

1. Buyers are better educated than ever before and pay a lot of attention to numbers, values, and market trends. The home of my dream concept has often been replaced by the deal of my dream.

2. Buyers will go to web sites like Zillow and Redfin for information, but many still want the extra help that a local agent can give them to determine value.

3. There is an increase in buyers in think they know enough to attempt to buy a home without using an agent.

4. Buyers who find me on the internet trust me more than buyers I meet at open houses. This is the fact I find more interesting than anything else I have encountered this year. I guess that my writing makes people feel they know me, which I think is a good thing.

My personal encounters with sellers:

1. While selling a home where a bank is involved, ie a REO, has a level of frustration unequaled by any other type of sale, you can be assured that the house is going to be sold at whatever price the market will bear. The bank will not withdraw the listing just because they can not get their expected price.

2. Last Jan short sales had about a 10% chance of closing. I do not know the national average for closings, but most banks are allowing the process to proceed and eventually closing many of short sales rather than foreclosing.

3. Estate sales, whether they are trusts or probates also close. The estate has to sell and will do it at market value and not throw a hissy fit and go home if they do not get what they want. Well, they may throw a hissy fit, but eventually they still make the sale.

4. Individual sellers are still often unrealistic and think their home is worth more than a buyer thinks it is worth. This is nothing new, but what is new is that these sellers now have competition from the above three types of sales so very often an individual seller will just not sell if he or she does not like the market value.

What has not changed for me this year is my belief that real estate is a wonderful long term wealth builder and if you buy a home, pay it off, and have it to live in, rent out, or give to your heirs, it is a smart way to spend your money. I also still believe in the home of your dreams, even if many of my clients do not.

Thank you all for your support and your disagreements, I learn from both.

Marcy Moyer

Intero Real Estate

D.R.E. 01191194

marcy@marcymoyer.com

www.marcymoyer.com

650-619-9285

Palo Alto Market Update, Feb 26th: Single Family Homes

Here's today's snapshot of the Palo Alto market--

123 active listings

25 pending sales

I'm in too much shock to deal with the sold homes. I'll get to that in my next post but I wanted to get this information out. 

What does this mean?

Last Dec. I commented that if Palo Alto's inventory got up to 120 active listings we'd be in trouble. Well, we are. There hasn't been this many homes for sale since 2001. We all know what happened then. The reasons for the decreased inventory are different than in 2001, but the results will probably be the same. I can only hope that sellers don't try to insult the buyer's intelligence, and that the buyers treat sellers with respect--even if they don't respect the asking prices. 

More on closed sales and price drops tomorrow. I'm off to the theatre tonight--my only occasional night off. Going to see "I Am My Own Wife" at the San Jose Stage Company, my very favorite area theatre.

If you're interested in finding the final selling price of any home, anywhere, you can do it on my website. Click here to get to my site. Once there, click on Cyberhome Home Valuation. You can then type in any address next to the search icon to get the  county records. 

If you need anything else or have any questions about the market, please contact me. I'm here to help.

Marcy Moyer, Intero Real Estate

650-619-9285

marcy@marcymoyer.com

Bay Area Highlights, Oct 6-20

Enjoy October by taking advantage of some of the great events happening this week in the Bay Area!

Music--

7:30PM, 10/7

Earth, Wind, & Fire, Rock/Pop, Mountain Winery, Saratoga

8:00PM, 10/9

David Byrne, Mountain Winery, Saratoga

9:00PM, 10/10

New Kids on the Block, Lady Gaga, Rock/Pop, HP Pavilion, San Jose

7:00PM, 10/12

Classical Pianist Garrick Ohlsson, McAfee Performing Arts and Lecture Center, Saratoga

9:00PM, 10/16

Russ Barenberg and Byron Sutton, Bluegrass/Country, Little Fox, Redwood City

8:00PM, 10/17

Jeffrey Siegal plays Grieg, This celebrated pianist returns to kick off Peninsula Symphony's 60th Season, San Mateo Performing Arts Center, San Mateo

7:00PM, 10/19

Tina Turner, HP Pavilion, San Jose

More Things To Do--

26th Annual Chocolate Fest

Twenty different vendors of chocolate wares: ice cream, gelato, brownies, cakes, cookies, truffles, and candy. 

10/11. 7:30--10:00PM. First Congregational Church of Belmont, Belmont

San Carlos Art and Wine Faire

The San Carlos Chamber of Commerce's Art and Wine Faire will celebrate its 18th year. 

10/11-10/12. 11:00AM, Downtown San Carlos

Campbell's Oktoberfest

Many cities across the U.S and world celebrate Oktoberfest. Campbell might well be mistaken for a German village during this event. 

10/18-10/19. 10:00AM-5:00PM. Downtown Campbell.

Half Moon Bay Art and Pumpkin Festival

Pumpkins reign supreme on the picturesque terrain surrounding the charming coastal areas. 

10/18. 9:00AM-5:00PM. Downtown Half Moon Bay

3rd Annual Midtown Fun Festival

Games giveaways, and fun for the family.

10/18. 11:00AM-4:00PM. Midtown Shopping Center, Palo Alto

Bay Area Highlights is brought to you by Cindy Solomon at North American Title Company. 

Enjoy your week! 

Why Should Anyone Buy a Home in This Market?

Owning a home can get complicated. Your home is often your biggest investment, a tax shelter, and that first giant step into adulthood. The most important and most overlooked aspect of home ownership is emotional--homes are the centerpieces of lives and families. Your home is your castle, a place to be with family, friends, and pets. It's where you make your mark on your internal world, not your mark on the outside world. 

The values of home ownership aren't debatable--but in today's market, it's more important than ever to reflect on the pros and cons before making the big decision. Should anyone buy a home in this market? Is the economy too unpredictable? Should you wait? 

These issues are plaguing many families right now, and there is no simple answer. 

I've put together a list of essential questions to help you discover if now is a good time for you to buy. First there are the simple mathematical questions, and then there are the more existential ones:

1. Can you afford to put 20% down and carry a 30yr mortgage, or put 10% down, carry a 30yr mortgage, and pay PMI (private mortgage insurance), or put 5% down and get an expensive FHA loan? There are some shorter fixed periods than the 30yr fixed which may be good in some circumstances, but I am going to take the conservative route and ask you if you can afford payments on a 30yr fixed loan. Can you weather the economy's ups and downs? If no, then you should not try to buy now. If yes, move on to the next question. If you do not know, search out a good lender and talk with them. DON'T use internet calculations. They won't provide a dependable answer.

2. Are you planning on staying in this home for at least 5 years and maybe longer? If you have to move can you afford to to keep your home as a rental? If you don't know, don't buy. At this moment in the Silicon Valley I can't think of any homes worth less than they were 10 years ago. Most are still worth more than they were 5 years ago. If you can't commit to at least 5 years stop here. If not, move on to the next question. 

3. Do you have a very specific goal in mind that can be achieved in a specific location? For example, are you trying to buy a home in Palo Alto so your children can attend schools there? Has the soft market enabled you to do that? If so, then this is a great time to buy. If you do not buy soon prices or interest rates could conceivably go higher and lock you out. It's also possible that prices could go lower, but are you willing and able to take that gamble with your children's education? If you are willing and able, then wait, and you might get a better deal.

4. Are you easily pleased, or specific about what you want and need in a home? If you are flexible regarding what you want in a home, and are more interested in getting the best prices, then there is no reason to rush into buying if you think prices will drop or inventory will skyrocket. However, if you are very picky or have specific needs that aren't found in many homes, when you find what you want, BUY IT. For example, if you're sound sensitive and find an affordable home where noise is not an issue in an area that has few quiet places to live, then you are a good candidate for buying now. Are you looking for a one story town home that has central air, a nice patio, and an attached garage? Trust me, these are not a dime a dozen. If you find what you want, buy it! 

5. Do you want a new home in an area where there is not a lot of room to build? Right now there is a large inventory of new homes. If you live in a city where there is little room to expand this is probably a great time to buy a new home. Builders are very generous with their upgrades and a few years from now there may not be as many developments to choose from in centrally located areas. There are a number of new developments in San Mateo and Santa Clara counties right now, but there is not a lot of empty land. There may not be as much new inventory in coming years.

We're still left with the question: Why should anyone buy in this market? Clearly, the answer isn't simple, although hopefully my guide brought you closer to understanding your options. With some soul-searching and advice from a trusted Realtor and Lender, the answer will get clearer for you. Good luck! 

Silicon Valley Land Surveying

Silicon Valley Land Surveying is the company I go to when I need engineers for subdivisions. These guys are great at what they do, and offer a variety of land surveying services for clients, including ALTA surveys, boundary surveys, topographic surveys, and legal descriptions for utility easements, temporary construction easements, lot line adjustments, and land/title transfers/exchanges.

For a complete list of services, CLICK HERE

I also added their link to my blog list. While their site isn't exactly a blog, it's still helpful enough to warrant a quick link. 

They're one of the most respected surveying companies in CA. Be sure to check them out! 

Recent Home Sales

Here's a link to a posting of recent home sales in the Palo Alto Weekly.

Recent Home Sales

Silicon Valley Survives, Foreclosure-Free Zone

On Yahoo News an article was posted a few days ago about the relative strength of the real estate market in Silicon Valley. Link--In Silicon Valley, Real Estate Remains Strong

Most of the article discusses the technology powerhouses behind the market's strength (Oracle, Google). Big web company employees get massive paychecks, and most of those employees live in Santa Clara and San Mateo Counties. 

While the rest of the country was chewed up and spit out by foreclosures, Silicon Valley dodged major damage thanks to job growth in the tech sector and the area's high average salaries. Subprime issues are only really hitting parts of San Jose and the fringes of the Valley. The areas with the best schools (see? schools have a lot to do with the value of your home, check out some other posts for more info on this topic) have the most thriving markets (Palo Alto, Woodside, Los Altos, etc).

The market here has definitely slowed, but plenty of listings still attract multiple offers. Teardowns are still happening too, another indicator of the market's strength. Teardowns are when a buyer purchases a house solely to knock it down and build another in its place. The real gold in Silicon Valley is the land--undeveloped land is going for high prices because investment potential for buildable plots is sky-high.