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.
The official start of the spring home selling season began February 4 with the passing of the Super Bowl. There was an immediate increase in listing activity across many areas as typically happens each year. Low loan rates and more homes for sale equals a great opportunity for buyers. Please note: Product selection and the ability to hold 7-10 years are critical at this stage of the market cycle.Jeff Stricker
Accurate pricing of a home for sale has become important again. In red hot markets homes will receive multiple offers and the price will be bid up to market value. In a more balanced market multiple offers are not a certainty and a home can be sold for less than current market value. Of course, overpricing it will cause a home to sit and not sell in any market. Now, more than ever, pricing it right matters! Jeff Stricker
Will the Fed drop in interest rates equate to a drop in mortgage rates? Not necessarily. Lenders are primarily concerned with inflation. If they feel that a move increases the chance of inflation moving higher they may actually increase loan rates on a decrease by the Fed. That is exactly what happened when the Fed reduced rates by .75% last week.
The Conference Board released their report on Consumer Confidence Tuesday. In researching the long term confidence data, I noted that only once since 1970 has consumer confidence gotten this low without the US going into a full-blown recession. Hopefully, we’ll avoid it this time, too. The Federal Reserve is doing what they can. Congress is trying to come up with a stimulus package. However, there’s only so much they can do at this point without creating other economic problems (inflation primarliy).
What has this caused in the local real estate market? So far, prices have not weakened (in fact they’ve continued to rise) due to the fact that more sellers are staying out of the market. Inventory of homes for sale is very low. Demand is still greater than supply.
We’re starting to see weakness, though. Homes that have negative “issues” or those that are slightly overpriced are taking longer to sell than they were a month ago. Super Bowl weekend is typically slow (this week there are very few new listings coming to market). The next two weeks should be very telling in terms of supply and demand.
Home buyers should not wait to see whether the conforming limit is raised from $417k to $725k in California. Although a conforming loan has a lower interest rate (about .75% currently) the increase to the limit is only a proposal at this time and may not be passed in Congress. If passed the increase may not take effect for 6-9 months as legislation moves forward very slowly in Congress. Lastly, one can obtain a no cost loan now and refinance into the lower rate later at no cost. Jeff Stricker