Archive for the 'For Sellers' Category
Home sales have increased while the supply of homes on the market has dropped over the past couple of months in Palo Alto, Los Altos and surrounding area. As potential sellers hear that values are firming, they are more apt to wait (hoping to get a better price later) rather than sell their home now.
Is this a good idea? We don’t think so.
An article in Friday’s Wall Street Journal[click the link to view it] outlines yet another reason why folks shouldn’t be too confident re a quick recovery, in spite of the recent stock market rally and improved consumer confidence.
In fact, the more we read, the more we believe that a good portion of the stock market rally was based upon a combination of the public’s wishful thinking and Wall Street’s investment bankers’ need to buy and sell stocks.
Meanwhile, businesses are still contracting and laying off employees. This recovery is far from over. There is a very high probablility, in our opinion, that local home values could decline further. Therefore, if an owner is thinking of selling in the near future, they would be well advised to do so now while we are in a “balanced” market.
A “buyers” market is likely to be back with us very soon.
Jeff and Steve
The government reported Thursday that the economy shrunk at a revised 1% during the second quarter and estimated that government stimulus spending added 1% to economic growth. In other words, without stimulus the economy is currently shrinking at a rate of 2%. Normally such a rate would be considered terrible.
Our belief remains that the uptick in economic activity and the real estate market will be short lived. Near term home sellers in the Palo Alto/Los Altos market area should sell now; buyers should buy quality, lock in low loan rates, and plan to hold long term.
Jeff and Steve
Did you notice? As consumer confidence and the number of home sales recently increased, the number of homes coming to market fell?
If homeowners believe that the economy is improving, they will often decide to wait for a better market and/or higher sales prices to put their homes up for sale.
We believe that there is a great risk of the Palo Alto/Los Altos area real eastate market softening in the near future. This will be a natural result of the continuing recession, residential and commercial foreclosure problems, and a “jobless recovery”.
Our advice for those thinking of selling is to do so as soon as practical.
Jeff Stricker & Steve TenBroeck
Home buyers are back in action in Palo Alto and Los Altos market areas. During the past thirty days 78 single family homes closed escrow in Palo Alto and Los Altos. And of those 78 homes, 20% sold over the asking price! Last year by comparison, 82 homes sold during the same period; 50% of them sold over the asking price. While certainly not as hot as last year, the last 30 days have been pretty darn good for local home sellers.
Please note: We’ve just posted our 2nd quarter real estate report featuring statistics, commentary, and analysis on the residential real estate market for the southern portion of the San Francisco Peninsula. In it we compare Q2 ’09 with Q2 ‘08 sales plus we report the current trending from Q1 ’09 for each area. Included are sales statistics for Atherton, Portola Valley, Menlo Park, Palo Alto, Los Altos, Los Altos Hills, Mountain View, Sunnyvale, and Cupertino.
Jeff and Steve
Both home sellers and real estate agents are hoping that the recent increase in home sales will continue, if not increase. The improved stock market has fostered the belief that the economy has bottomed and will now improve going forward.
We are very skeptical that the improved real estate market in the Palo Alto/Los Altos market area will last more than a few months. We believe the increase in sales is due primarily to the threat of rising interest rates. It caused potential home buyers sitting on the fence to act rather than risk having their buying power diminished by further rate increases.
In April, Silicon Valley shed about 5,000 jobs! As long as job losses continue the market will weaken. Additionally, there are many home owners who bought between 2003 & 2005 with 5 year adjustable loans that are now resetting at unmanageable payment levels. They will be forced to sell. And, unfortunately, many of those owners purchased with 10% down payments and they actually owe more than their property is now worth. More foreclosures and short-sales are coming.
In spite of the recent bounce in consumer confidence and sales activity, the correction is not over. Therefore, if you plan to sell during the next 12 months now is the time.
Jeff and Steve