Whether you are a first time buyer or seller, or have been through multiple transactions, you might be surprised by how quickly the real estate market changes in Los Altos, Palo Alto and surrounding communities. You need hard-hitting historical data, current market analysis, and insider experience to stay informed and succeed in these real estate markets.
As a service to their clients, Jeff Stricker and Steve TenBroeck of Alain Pinel Realtors provide regular market analysis and commentary. You are invited to read the entries below, add your comments, ask questions or contact them directly.
We can now add another wrinkle to the on-going mortgage mess. It seems that we are all impacted by it, in one way or another. The latest problem has to do with purchase money loans.
As if it weren’t hard enough to locate, negotiate, and beat out competing buyers for a good home in our area, now a buyer cannot be sure that their “pre-approved” loan is going to actually be there when it comes time to close escrow. Some lenders are now finding reasons, just prior to close of escrow, to call for another “review appraisal” or additional down payment money (due to “falling values in the Bay Area” – as if all Bay Area neighborhoods were falling in value! They’re not.).
The bottom line: A buyer cannot be sure they will be able to close escrow on time. This potentially puts the buyer’s deposit (usually 3% of the purchase price) at risk of loss, due to a breech of contract.
Advice to buyers: Allow more time (30 to 45 days) for close of escrow and be prepared to add to the down payment, if necessary.
Note: 2008 ½ yearly sales data and reports will be ready next week.
The Anderson Center for Economic Research at Chapman University reported last week that consumer confidence has “…collapsed in California” to the lowest level since the index began in 2002. One component of the index, future spending plans, had the greatest drop, year over year.
We believe that this is a clear sign that the inventory of homes on the market will likely rise significantly, moving the SF Peninsula real estate market into a “balanced” or perhaps even a “buyer’s” market.
The question now is, “When?” We believe the answer is, “Soon!”
Almost every time we are hired to sell a home, a friend or neighbor of the seller indicates they would like to buy it or that they know someone who does. Sometimes these friends and neighbors have good intentions, and sometimes not. It is impossible to know what market value is to determine a fair sales price until the home is actually marketed.
We strongly suggest that owners have all interested parties submit their offer on a specific day after the home is fully marketed. The home can then be sold to any party the seller chooses, at fair market value.
FYI, we have never in over 20 years of selling homes had one of these “interested” parties submit an offer, confirming that they were only interested in getting the home at a bargain price. It is amazing how successful these bargain-hunting buyers are at enlisting well meaning neighbors to find unsuspecting sellers for them. We wonder how many sellers have fallen for this ploy.
We have been commenting on the steep decline in U.S. consumer confidence. But our local real estate market on the south SF Peninsula is holding up nicely – why?
Ans: The local job market has been stable. As long as it remains so, local home buyers will continue to buy. Watch for layoff notices, if any, in the near future as a sign the local market may weaken.
On Sunday 4/27, the SF Chronicle ran a short piece on tips for sellers: SFGate Article that I thought was to the point and well done. See if you agree.
At the end of April we can report that:
1. Consumer Confidence continues to fall nationally Consumer Confidence Index – The Conference Board
2. The number of home sales in our market area is at the lowest level since 2001
3. Values however are holding steady because the quantity of homes for sale is also at a very low level (but rising in Menlo Park)
4. Interest rates are still extremely attractive, but likely to rise soon due to inflation worries
5. The Silicon Valley economy remains upbeat