Q&A with Karl Lee, President Santa Clara County Association of Realtors

Karl Lee, President SCCAOR

Silicon Valley's housing market is well on its way up, but it still has a long way to go before home values return to peak prices reached back in 2007. The market's transition prompted us to contact area real estate leaders, including Karl Lee, president of SCCAOR, to gain some market insight for homebuyers and sellers alike.

by Broderick Perkins
© 2010 DeadlineNews.Com


Unauthorized use of this story is a copyright violation -- a federal crime


Deadline Newsroom - Silicon Valley's housing market is well on its way up, but it still has a long way to go before home values return to peak prices reached back in 2007.

The market's transition prompted us to contact area real estate leaders to gain some market insight for homebuyers and sellers alike.

We recently sat down in a question-and-answer session with Karl Lee, president of the Santa Clara County Association of Realtors (SCCAOR) and a Santa Clara County native.

Lee also serves on San Jose's General Plan Task Force and the San Jose Foreclosure Prevention Task Force and is broker/owner of the family owned Realty World Results Pros in Milpitas.

Lee also has 13 years of experience in corporate banking finance and enjoys softball, volleyball, skiing, hiking and traveling.

Q: How would you describe today's housing market? Is it a buyer's market or a seller's market?

A: Santa Clara County has become a seller's market in 2010. Multiple offer situations have been common. Every month this year has seen 25 to 30 percent increases in closed sales volume compared to the same months last year. We've also seen double digit average sales price increases.

Q: What do today's housing market conditions mean for buyers and for sellers? How can they obtain the best deal, selling or buying in today's market?

A: The current Santa Clara County real estate market has ample opportunities, but buyers and sellers need to be patient and prepare for the unexpected. Closing a contract is more complicated than ever. We have also experienced delays due to the new federally mandated Good Faith Estimate guidelines.

To be a successful seller, you must make strong pricing and presentation efforts to offer the most attractive home on the market. The strategy reveals to buyers that your home is a better value than other homes. It also allows buyers to visualize how the home fits his or her lifestyle.

Buyers in today's market need to understand the competitive environment they face. Buyers need to carefully evaluate homes and contractual terms, particularly when it comes to short sales and bank-owned homes in poor condition or requiring repairs. Buyers must convince sellers that they have most competitive offer and the best chance to close the transaction.

Q: What do you tell buyers who may be waiting for home prices to fall further?

A: I don't sense that prices will fall significantly in our market. However, if prices do fall some, increasing financing costs will likely offset small savings from falling prices.

Q: What do you tell sellers waiting for home prices to rise?

A: Homeowners should base their selling decision on their life goals and lifestyles, not on a projected direction for the housing market. It is impossible to out-plan the market.

Q: Distressed properties account for a larger percentage of homes for sale than normal. These properties can be a good deal, price-wise, for home buyers looking for a bargain. They can also come with hidden problems. How do you advise buyers considering distressed properties?

A: Short sales represent approximately 42 percent of the market, while foreclosed, bank-owned homes represent a much smaller share, approximately 7.72 percent.

My recommendation for buyers is to focus on the best home for their goals and needs. The market perception that distressed properties are bargains has a created a frenzy for these homes and that's created more competition for them, more so than even for traditional listings.

Bank owned sales, short sales and traditional sales each have their own unique set of dynamics and complications which buyers need to consider and adjust to. When it comes to a distressed property, planning for hidden repair costs and legal issues is key.

Q: What's your advice for someone who has an "underwater" mortgage that's larger than the home is worth, but who is not having a problem making payments?

A: History has shown us that our market will work its way out of the current economic cycle. All indications are that we have already hit the bottom. If your lifestyle and goals make sense with your current home, if you can afford to make your payments, you should continue to make your payments.

Q: What's your advice for a homeowner with an "underwater" mortgage but is struggling to make payments or is soon to face a mortgage rate reset or other condition that could cause problems?

A: The first step is to consult appropriate experts including an attorney, a tax expert, a counselor who is certified by the U.S. Department of Housing and Urban Development (HUD) and a realtor. Each homeowner and each loan agreement have unique legal and tax implications.

A great resource for distressed homeowners in Santa Clara County is ForeclosureHelpSCC.org, created by the San Jose Foreclosure Prevention Task Force, a coalition of the City of San Jose, the Santa Clara County Association of Realtors, the Silicon Valley chapter of the California Association of Mortgage Practitioners, a number of HUD certified counselors and other non-profit agencies.

If a short sale is a viable option, experienced realtors with short sale home selling expertise can manage the marketing and contract negotiations.

Q: Given the market has put downward pressure are the value of homes since the peak of the boom, how can homeowners boost home value or shore up and retain the value of their homes?

A: Maintain upkeep, perform repairs, clean up, remove clutter. A home that shines always brings the most value. Home improvements typically don't provide an equal return on the investment, but their true value comes from living and using the improvements.

Paying down and lowering the principal more than what's required by the loan agreement is a good idea, depending upon your lifestyle and financial goals. Of course, the more you pay down the principal, the less mortgage interest you can deduct.

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San Francisco Bay Area ground zero for national housing recovery

Go offbeat! Click my head!

"Right now, the Bay Area is leading California's recovery because the area has fewer sub prime loans and this area is truly unique, with unique properties."

by Broderick Perkins
© 2010 DeadlineNews.Com


Unauthorized use of this story is a copyright violation -- a federal crime


Deadline Newsroom - With some Golden State home prices skyrocketing again, the focus is turning to the California region that could be truly ground zero platinum for the nation's next real estate boom.

According to California Association of Realtors (CAR) vice president and chief economist Leslie Appleton-Young, the San Francisco Bay Area, including Silicon Valley, is at the top of the heap.

"Right now, the Bay Area is leading California's recovery because the area has fewer subprime loans and this area is truly unique, with unique properties," Appleton-Young said at a recent Silicon Valley Association of Realtors (SILVAR) meeting in Palo Alto last week.

Even the Bay Area weather is cooperating. After several unusually heat-wave filled summers, the region has returned to its temperate-best Mediterranean like climate, a perfect inducement for home shopping.

In May, 8,264 homes closed escrows in the nine-county San Francisco Bay Area, up 18 percent from April and 11 percent from May 2009, according to MDA DataQuick.

In the Bay Area, the May median price of all homes was $410,000 up smartly more than 20 percent from May 2009.

That's a boom time pace.

In Santa Clara County (Silicon Valley), sales were up 28.2 percent from the previous year and the median price of $525,000 was up 18 percent from $445,000 in May of 2009.

Again, boom time stuff.

"The fortunes of California, including its state coffers, tend to rise and fall along with the returns generated in the stock market. A significant rise in the median price of a home in the Bay Area is likely linked to the dramatic recovery seen in the stock market in the past year, particularly in the tech sector, as market returns translate into home-buying cash," said Nancy Osborne, chief operating officer of Erate.com, a Santa Clara, CA-based financial information publisher and interest rate tracker.

Dataquick pointed out the median sale price of all homes moved above $400,000 for the first time in 21 months because of action in the mid- to high-end markets of $500,000-plus homes, as sales fell in many affordable inland areas where investors and first-time buyers faced a dwindling inventory of low-cost foreclosures.

"The median has increased because the high end is making a comeback as there is a little more willingness on the part of sellers to take concessions; there are fewer distressed properties in the Bay Area compared to the rest of the state; and the jumbo market has started loosening for high-end borrowers," Dataquick reported.

California's volatile housing market is known for fast stops and faster starts.

Appleton-Young, often conservative in her estimates, said in five to 10 years California will see the beginning of a housing shortage and that could cause skyrocketing prices -- again.

She told the SILVAR meeting there has been an 83 percent drop in building of new homes since 2004, yet household growth for the state is projected at approximately 200,000 a year.

When demand outpaces supply, boom happens.


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Rebounding California housing market a leading indicator for US

Surviving cold winter blackouts

California's housing market is rebounding, perhaps leading the way for the nation and year-to-year numbers shows Santa Cruz and Silicon Valley are leading the way in California.

by Broderick Perkins
© 2009 DeadlineNews.Com



Unauthorized use of this story is a copyright violation -- a federal crime


Deadline Newsroom - California's housing market is often a bellwether for the nation and if the Golden State's housing market trends continue, conditions could bode well for the rest of the nation.

Both home prices and home sales are on the upswing in California, previously one of the hardest hit states in the nation during the recession.

The California Association of Realtors (CAR) reported this week, the state's median home price rose to $304,520, a 5.8 percent increase from the $287,880 median for November 2008.

A smaller supply is helping push up prices. CAR's Unsold Inventory Index fell to 4.5 months in November, compared with 7.1 months in November 2008, according to the association.

"The median price for most regions hit bottom during the first half of the year, and the statewide median home price now is nearly $60,000 higher than its lowest point in the current cycle," said CAR President Steve Goddard.

"First-time buyers continued to drive the market in November, as many opened escrow to take advantage of the federal tax credit prior to its original Nov. 30 expiration," said Goddard, who expects further price boosts due to sales generated by the extension of the first-time home buyer tax credit and an expansion of the credit to include qualified move-up buyers.

Meanwhile sales statewide were up 4.7 percent from a year ago.

"With sales bottoming out more than two years ago, and the median home price reaching its trough in February 2009, California remains ahead of the nation in market recovery," said CAR's Vice President and Chief Economist Leslie-Appleton-Young.

The condo segment is, by far, both the price and sales leader, with prices are up 12.1 percent from a year ago and sales jumping by a whopping 26.3 percent, according to CAR.

Statewide, the cities with the greatest median home price increases in November 2009 compared with the same period a year ago were: Cupertino, 37.8 percent; Poway, 35.8 percent; Morgan Hill, 33.2 percent; Lake Forest, 25.6 percent; Atwater, 24.4 percent; San Rafael, 23.8 percent; Atascadero, 22 percent; Vista, 21.2 percent; Tulare, 19.8 percent; Fountain Valley, 18 percent.

Year-to-year regional sales leaders were Santa Barbara South Coast, up 115 percent; Santa Cruz County, up 50 percent; Santa Clara County (Silicon Valley), up by 45.5 percent; San Luis Obispo, 40 percent and Orange County, where sales were up 28 percent from last year.

Prices and sales appear well on their way in the Golden State to live up to CAR's projections for 2010.

In October, CAR said California's median single family home price in California will rise 3.3 percent to $280,000 in 2010, up from the projected median of $271,000 this year.

Sales for 2010 were expected to decline 2.3 percent to 527,500 units, compared with 540,000 units (projected) in 2009.

During the current boom-bust cycle, California's median price for single family homes peaked in 2007 at $560,300 and sales rose to 625,000 units in 2005.

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Broderick Perkins, an award-winning consumer journalist, parlayed 30 years of old-school journalism into a digital real estate news service, the San Jose, CA-based DeadlineNews Group, including DeadlineNews.Com, a real estate news and consulting service and Web site, and the Deadline Newsroom, DeadlineNews.Com's news back shop.

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Half-price homes boost SF Bay Area sales

Brothel bike-in a "green" hit

The median home price of all homes in the 9-county SF Bay Area was $352,000 in June and the low price generated 8,644 new and resale house and condo sales, representing a 20.4 percent increase in sales from a year ago, according to San Diego-based MDA DataQuick.

by Broderick Perkins
© 2008 DeadlineNews.Com

Unauthorized use of this story is a copyright violation -- a federal crime

Deadline Newsroom - With San Francisco Bay Area home prices nearly half what they were three years ago, during the peak of the market, sales jumped to their highest level in nearly three years.

The median home price of all homes in the 9-county Bay Area was $352,000 in June and the low price generated 8,644 new and resale house and condo sales, representing a 20.4 percent increase in sales from a year ago, according to San Diego-based MDA DataQuick.

If only the mortgage market was cooperating.

"Getting mortgage financing this last year has really been an egregious process, especially for borrowers in the upper half of the market. We're just now seeing the beginnings of more normal mortgage lending patterns. There's still a long way to go, but it looks like the worst of the grind is over," said John Walsh, MDA DataQuick president.

Sales boomed most in Solano (66.5 percent); Santa Clara (Silicon Valley -- 28.5 percent), Alameda (21.7 percent) and Contra Costa counties where home price declines were also among the highest.

"This market continues to be positive for the buyer," said Santa Clara County Association of Realtors President Quincy Virgilio.

"Given that prices may start to go up and low interest rates may rise, value-shoppers need to act quickly," he added.

Last month 37.3 percent of all homes resold in the Bay Area had been foreclosed on in the prior 12 months, down from 40.5 percent in May and the lowest since 36.0 percent in August 2008. The peak was 52.0 percent in February this year. By county, foreclosure resales ranged last month from 6.3 percent of all resales in Marin to 62.7 percent in Solano.

While Bay Area home sales have increased on a year-over-year basis for the last ten months, they remain 16 percent below the June average.

Also, the current median is 47.1 percent below the $665,000 peak reached in June 2007. The median price hit a low of $290,000 in March this year. DataQuick attributed the lower prices to both value declines and the absence of more expensive high-end homes sales.

DataQuick said foreclosure activity remains near record levels, while financing with adjustable-rate mortgages is near the all-time low but has recently edged higher. Financing with multiple mortgages is low, down payment sizes and flipping rates are stable, and non-owner occupied buying is above-average in some markets.

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Broderick Perkins, an award-winning consumer journalist, parlayed 30 years of old-school journalism into a digital real estate news service, the San Jose, CA-based DeadlineNews Group, including DeadlineNews.Com, a real estate news and consulting service and Web site, and the Deadline Newsroom, DeadlineNews.Com's news back shop.

Perkins is also the first Examiner to cover three beats for the Examiner.com news service:
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Emerald City top town for big fun

Snails hide smiling birthday boy's
face stuck with record 43 snails

While Seattle takes first place among fun towns, California is the state where you'll find the most fun and Silicon Valley geeks apparently aren't just tinkering with technology.

by Broderick Perkins
© 2008 DeadlineNews.Com


Unauthorized use of this story is a copyright violation -- a federal crime

Deadline Newsroom - When Kraft Food's Ritz Cracker
division commissioned Bert Sperling's BestPlaces.net to find fun in America, data that included outdoor recreation resources, fun spending, sports and recreation, in-home entertainment didn't point them to New York City or even Las Vegas as the top "FUNomenal Place."

No, Seattle, got the nod as No. 1 on the list of "Ritz Cracker FUNomenal Places."

That's because Emerald City residents have higher than average participation in social activities such as block parties and barbecues, they rank near the top in several other fun categories, including skiing, access to amusement parks, and a plethora of dog parts -- 17 in total.

Seattle residents also spend a high percentage of their income on doing fun stuff, including above average spending on gyms, sporting events, movies and theater, bicycles, and musical instruments.

Seattle is also surrounded by more verdant forests and parks than any other major U.S. metro area, and its nearby oceans, rivers, and lakes make the city a great location for fun.

Ritz released the fun town findings in conjunction with its 75th anniversary.

After Seattle came Minneapolis, MN; San Francisco, CA; Chicago, IL; Washington, DC; San Jose, CA; Los Angeles, CA; Boston, MA; San Diego, CA; and New York, NY.

California, with four cities in the Top 10, was the top state for fun and it's not just about the Sun.

San Francisco, CA was the top spot for active fun. City residents spend more money annually for their park system than any other city in our study, and with 26 off-leash dog parks, the City by the Bay had the most dog parks per person.

Who says tech geeks don't have fun. In San Jose, the capital of Silicon Valley, 400 hiking trails, high levels of spending on sporting events, movies, recreation lessons and bicycles; and nearby windsurfing, water surfing and snow sports makes it a hit for fun seekers.

Forget celebrity watching. Los Angeles scored high marks for its eight major amusement parks and a host of museums, sports teams and nearby state and local parks.

And San Diego year-round mild temperatures and dry weather make it tough to stay indoors and easy to spend the day surfing, windsurfing, biking, and running, according to the study.

The "Ritz Cracker FUNomenal Places" study evaluated 50 of the largest metro areas in the United States, and identified the most fun cities using a variety of data, including outdoor recreation resources, spending on fun activities, sports and recreation, and in-home entertainment, as well as participation in and spending on social activities.

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Broderick Perkins, an award-winning consumer journalist, parlayed 30 years of old-school journalism into a digital real estate news service, the San Jose, CA-based DeadlineNews Group, including DeadlineNews.Com, a real estate news and consulting service and Web site, and the Deadline Newsroom, DeadlineNews.Com's news back shop.

Perkins is also the first Examiner to cover three beats for the Examiner.com news service:
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Q&A with Julia Truesdale Keady, 2009 President SILVAR

Julia Truesdale Keady
2009 SILVAR President

We recently sat down in a question-and-answer session with Julia Truesdale Keady, 2009 President of the Silicon Valley Association of Realtors (SILVAR), to glean advice for homeowners, home buyers and home sellers in Silicon Valley.

See more Deadline Newsroom Q&As with real estate leaders.

by Broderick Perkins
© 2008 DeadlineNews.Com


Unauthorized use of this story is a copyright violation -- a federal crime

Deadline Newsroom - Uncertainty in the housing market makes it a good time to seek insight from real estate professionals, leaders who have their fingers on the pulse of the housing market.

We recently sat down in a question-and-answer session with Julia Truesdale Keady, 2009 President of the Silicon Valley Association of Realtors (SILVAR), to glean advice for homeowners, home buyers and home sellers in Silicon Valley.

Keady is also a Realtor with Alain Pinel Realtors in Palo Alto and has been an active, top-producing real estate agent on the San Francisco Mid-Peninsula since 1985.

She's married to Michael Morris and together share a full house of children -- Ashley, Daniel, Kate and James -- and two grandchildren, Kierra and Danny.

In Keady's spare time she travels, and enjoys golf, hockey, hiking and opera.

She also has her hands full leading SILVAR.

Q: What is SILVAR?

SILVAR is a professional trade organization representing more than 4,000 Realtors and affiliate members engaged in real estate business on the San Francisco Peninsula and in the South San Francisco Bay Area. SILVAR promotes ethical standards in real estate practice and serves as an advocate for homeownership and homeowners, while representing the interests property owners in Silicon Valley. SILVAR members are also members of the National Association of Realtors and the California Association of Realtors.

Q: What is your role as president of SILVAR?

A: My role to ensure our members have a competitive advantage in the market. Working with SILVAR's board of directors, I am committed to maintaining the level and quality of services for our members, and to provide the tools necessary to help our members survive and succeed in business. Tools include business meetings, educational programs, marketing opportunities and access to current market trend reports.

Q: The housing crisis is on the minds of everyone, especially home owners who are struggling to pay their mortgages. What steps are you, in your role as president, and SILVAR taking to help at-risk homeowners keep their homes?

A: We are educating our members about property issues. Our government affairs staff keeps an eye on proposals at the local, state, national government levels that might significantly impact home ownership, private property rights and housing opportunities. At the national level, we are working with the National Association of Realtors (NAR) to preserve the mortgage interest deduction, tax credits for first-time homebuyers and higher conforming loan limits. At the state level, we oppose mandates on the sale of homes that would ultimately result in increasing the cost of buying a home. We also support the expansion of diversified housing opportunities for families of all income levels in Silicon Valley.

Q: What advice do you have for homeowners, in general, in terms of maintaining the value of their homes in a tight market? For those who choose to stay put right now, what might they be overlooking in terms of retaining and maintaining their home as a valuable asset?

A: Good home maintenance is key to preserving a home's value, and impressing potential buyers. Making homes safe with smoke detectors and carbon monoxide detectors, keeping the electrical system and plumbing in good working order are important steps. Routine preventive maintenance is also important. Repair roof leaks, seal gaps in siding, paint bare wood, replace damaged decking, patch cracks in concrete, and caulk around tubs and showers. Also important: a programmable thermostat, weather stripping for doors and windows, fixing leaking faucets, upgrading insulation, and replacing leaky windows. Home owners should also consider environmentally-friendly materials for windows, doors, siding, decking, fencing, roofing, flooring, and insulation. And always get rid of clutter, open up spaces, update window treatments to allow in more light, and organize closets and storage.

Q: What advice do you have for home buyers in the current market? Some buyers have decided to sit out the recession and wait for the bottom of the market. Other buyers have decided to buy now because prices have already dropped and mortgage rates are low. What advice do you have for each type of buyer?

A: If you have a solid job and you can afford to buy a home, now is an ideal time.

Recent decreases in home prices and mortgage rates have brought affordability into better alignment with income levels. Inventory is up, which means buyers have more homes from which to choose, and with that comes more negotiating power. Interest rates and state and federal incentive programs out there for buyers are the best I have seen in my long career.

There are some (job-loss mortgage insurance) programs in our marketplace today that will protect a first-time buyer's mortgage payment for some months in the event buyer loses their job in the first year of home ownership.

Even if the market were to lose some value from here, if the interest rates bump up even a small percent, the long-term cost of a home purchased later would be greater than buying today at our current rates. Real estate has always been considered a long-term investment. Homeownership builds wealth over the long-term.

Make sure you consult a professional, experienced Realtor, who is knowledgeable about market conditions in your area.

Q: Likewise, what advice do you have for home sellers, some of whom have decided to wait until the market improves and others who, for one reason or another, must sell now? How can they best approach their decision to sell or not to sell?

A: If you want to sell, seek advice from an honest, competent, and experienced Realtor about why you are thinking about selling. Write down all the positive and negative reasons. One list will stand out and your decision will be easy.

If you decide to sell, price your home correctly. Seek the help of a Realtor to evaluate a realistic market value for your property. Do not price your home only to test the waters. Today, under present market conditions, real market pricing is key to selling your home right away. If you set your price unrealistically and are forced into a price reduction, you will ultimately be chasing water downhill. Your Realtor can give you recommendations as to how to make your home look and feel like the home buyers seek in your neighborhood.

Q: What can you tell residents in Silicon Valley about the current state of the housing market? The median price in March, $450,000 for single-family homes, was less than it was nearly 10 years ago in March 2000, at $524,250. The March median this year was also about half the median price of $830,000 in March 2007, the year the market peaked. How did that happen? How does that pan out for home values? Have homes lost half their value in just a couple of years?

A: This is very discouraging at first glance. While all areas have felt the recessionary impact of lower home values, some areas have been hit particularly harder than others.

The drop in median price overstates the decline in the value of the typical Silicon Valley home. At present, the median home price is reflecting the fact that more of the lower-end, discounted homes are selling in this market, so there is a softening of high-end sales, which are now under-represented in the statistics.

The housing market can differ from one street to the next, depending upon the school district and other assets of a neighborhood. To know what effect the current economic climate has had on a given property, residents should consult with a Realtor to obtain an evaluation of that property.

Don't forget, homeownership is a long-term investment and a good one. According to the Federal Reserve Board, a homeowner's net worth is 46 times that of a renter's. When purchased for the long-term, housing is still one of the safest investments consumers can make. In addition to the savings accumulated through a buildup of equity and tax advantages, a home provides shelter. No paper investment provides this benefit.

Also, the benefits of home ownership go beyond the checkbook or 1040 forms. Studies show high and stable rates of home ownership rates boost the quality of life in communities by supporting education and civic involvement, while lowering crime rates and welfare dependency.

Q: Is it a buyer's or seller's market? Why? When will the market return to a "normal" market that's fair and balanced for both buyers and sellers?

A: Actually, "fair and balanced" describes the current marketplace. If priced realistically, homes sell. Sellers may not now enjoy the value they had in 2007, but their home will sell if priced realistically.

Bargain hunters are more likely to find a good deal when the supply is ample, like now. Buyers can take their time and buy subject to the sale of their current home more easily than in recent years. That puts buyers in a better position to negotiate than they were a couple of years ago.

With interest rates so low and these other great incentives, including the tax advantage of the mortgage interest deduction, now is a perfect time for first-time and even repeat buyers.

Q: Are there any additional comments you'd like to share with your constituency, consumers or the public at large?

A: Times are tough, sure, but we are very fortunate here in the Silicon Valley region. We still have more jobs than housing units and it is a wonderful and vibrant place to live. Our employment diversity, fabulous educational institutions, world renowned healthcare and exceptional weather are golden and we will be a desirable place to live forever. People buy homes here to live in and pay off so, in their golden years, they will have an asset that will help support them throughout their lives. Investment opportunities also abound. Rental property purchased and held for the long term is a very tried and true strategy employed by many.

I would urge consumers who are considering selling or buying a home to contact a Realtor in their local market. A Realtor can help them begin to build their future through homeownership. A Realtor and affiliates can help you with home inspections, home financing, home buyer and home selling. Visit SILVAR's Web site to contact a Realtor.

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Assessed values of 90,000 Silicon Valley homes sink average $181,000

Operation finds fir in man's lung

As median home prices roll back to nearly 10 year lows, reductions in Silicon Valley's 2009-2010 assessed property values -- to date -- represents an $18 billion reduction in property taxes to be collected for the period, the largest decrease in county history. And the assessor isn't finished.

by Broderick Perkins
© 2008 DeadlineNews.Com


Unauthorized use of this story is a copyright violation -- a federal crime

Deadline Newsroom - California's Santa Clara County (Silicon Valley) Assessor says when area homeowners get their annual property tax bill this June, at least 90,000 of them will find their property value has been assessed down an average of $181,000.

While that could slash homeowners' property tax bills substantially, local government (including schools, cities, the county, redevelopment agencies, community colleges, and special districts) will suffer significant cutbacks.

Property taxes paid by each homeowner amount to approximately 1.25 percent of a property's assessed value in Silicon Valley and the 2009-2010 numbers represents an $18 billion reduction in property taxes to be collected for the period, the largest decrease in county history.

"It is far more pervasive than I expected, and these preliminary numbers are far from final. While incomplete, this data is valuable to cities and schools as they plan their budgets," said Assessor Larry Stone.

As of January 1, 2009, approximately 20 percent of all single family homes and one-third of all condominiums have experienced assessed values that are below their purchase price.

The total number of properties facing assessment reductions is more than double the previous year and the average $181,000 reduction approaches three times the average $78,000 reduction last year.

It's not over

Additional reductions are anticipated between now and July 1, 2009, when the assessment roll is officially completed. Between January and June, the Assessor's Office is reviewing the assessed values of nearly 200,000 residential properties to determine if the market value, as of January 1, has fallen below the original assessed value (typically, the purchase price).

Changes in ownership in a declining market (especially foreclosures and other distressed sales), new construction and lowered values in business property factor into the lower assessed values. In 2008, the number of foreclosures jumped four fold to 6,200 homes in Santa Clara County, the assessor's office reported.

Richard Calhoun, broker owner of Creekside Realty in San Jose, says the median price of single family homes in closed transactions in March was $450,000 compared to $830,000 in March 2007, during the height of the housing boom. The current median is also less than it was nearly 10 years ago in March 2000, when it was $524,250.

"The first and last time the median sold price was near this level was January 2000, $433,500 and February 2000 $467,500," said Calhoun.

The lower median price reflects a preponderance of distressed property sales and more sales in lower priced markets within Silicon Valley.

Once all properties are assessed, the Assessor’s Office will mail an assessment notification card to every property owner. Homeowners are advised to wait until they receive their notification cards rather than deluge the assessors office with inquiries about assessed values.

• More property tax news that really hits home.

• Click on the keywords below for more stories on this subject.

© 2008 DeadlineNews.Com

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Silicon Valley swamped with REOs

Remember when banks lobbied heavily for the right to sell real estate? They now understand the phrase "be careful what you wish for."

by Broderick Perkins
© 2008 DeadlineNews.Com


Unauthorized use of this story is a copyright violation -- a federal crime

Deadline Newsroom - When President Obama recently signed legislation to keep banks out of real estate brokerage and management it may have been too late, from a banking standpoint.

Lenders already learned the hard way that real estate holdings aren't always a golden egg.

Take Silicon Valley.

Please.

The area is a bellwether for the state and the state is a bellwether for the nation. As goes California, so goes the nation.

All Lender Controlled Transactions	67%
By Price
Lowest 25%	94%
Low to Mid 25-50%	90%
Mid to High 50-75%	65%
Highest 25%	21%
By School District
Mt Pleasant	95%
Alum Rock Union Elementary	88%
Gilroy	86%
Oak Grove	85%
Morgan Hill	85%
Milpitas Unified	79%
Franklin-McKinley	78%
Evergreen	76%
Berryessa Union	67%
San Jose Unified	62%
Cambrian Union	58%
Luther Burbank	50%
Orchard	50%
Union	47%
Campbell	46%
Santa Clara Unified	44%
Moreland	22%
Sunnyvale**	47%
**Sunnyvale By ZIPCode
94085/9	78%
94086/7	13%
Cupertino Union	0%
Lakeside	0%
Loma Prieta Joint Union Elementary	0%
Los Altos	0%
Los Gatos Union	0%
Mt View Whisman	0%
Palo Alto Unified	0%
Saratoga Union	0%

Source: Richard Calhoun, Creekside Realty

When single-family sales by school district (which is how many homebuyers shop) were considered in Silicon Valley, CA, lender controlled transactions amounted to 67 percent of all sales in January 2009, according to some number crunching from Silicon Valley's resident real estate numbers analyst, Richard Calhoun of San Jose-based Creekside Realty.

See the chart (Percent of Silicon Valley Area January 2009 Home Sales Controlled By Lenders - By Price Point, By School District) to the left.

That may be a boon for buyers, but for sellers and lenders who hold foreclosed properties, it means they've got to unload properties at Blue Light Special prices.

For buyers, it means pull out the stops and negotiate until you drop -- just do it quickly.

But the end of low prices could be near and, in Silicon Valley, anything can happen.

"The median price for single-family, re-sale homes for February was flat at $450,000 compared to January. This tells me we have either hit the bottom in pricing, or we are very near. Obviously I'm not talking about homes selling for $450,000 in Los Altos or Saratoga, but in the lower priced areas in San Jose and further south, said Linda C. Boyd, a broker associate with Meredith Homes and Enterprises, Inc. in Los Gatos, CA.

"Would you have thought three years ago that you could buy a single family home anywhere in Silicon Valley for $450,000? You could hardly buy a one bedroom condo for $450,000. But this home buyers' nirvana has to end sometime, and I personally think the end is near," added Boyd.

Said Calhoun, "I think what this indicates is at this point and time selected areas have had a great drop in property values and likely combined with a high loan to value ratio initially causing more homeowners to be upside down. This data really isn't that much different than the Zillow report that showed the percentage of homeowner that had negative equity in their homes."

How bad is it?

Said Calhoun, "I don't have any idea what the historical levels of REO and short sales have been in Santa Clara County/Silicon Valley. However, because 100 percent financing wasn't available until recently, I feel pretty comfortable saying short sales of this magnitude is a new experience here in Santa Clara County and pretty much across the nation. When I got into the industry in 1981 20 percent down was the normal. Had that been the case (in the recent cycle), it would have been the homeowner's equity eaten up with the price declines. With 100 percent financing of recent years, it became the lender's funds that are at risk."


© 2008 DeadlineNews.Com

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Broderick Perkins, an award-winning consumer journalist, parlayed 30 years of old-school journalism into a digital real estate news service, the San Jose, CA-based DeadlineNews Group, including DeadlineNews.Com, a real estate news and consulting service and Web site, and the Deadline Newsroom, DeadlineNews.Com's news back shop. Perkins is also a National Real Estate Examiner. All the news that really hits home from three locations -- that's location, location, location!

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© 2008 DeadlineNews.Com

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Broderick Perkins, an award-winning consumer journalist, parlayed 30 years of old-school journalism into a digital real estate news service, the San Jose, CA-based DeadlineNews Group, including DeadlineNews.Com, a real estate news and consulting service and Web site, and the Deadline Newsroom, DeadlineNews.Com's news back shop. Perkins is also a National Real Estate Examiner. All the news that really hits home from three locations -- that's location, location, location!

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Quincy Virgilio, 2009 SCCAOR President Q&A

Quincy Virgilio
2009 SCCAOR President

With so much uncertainty in the housing market, it's a good time to seek insight from real estate leaders who have their fingers on the pulse of the market. We recently sat down in a question-and-answer session with Quincy Virgilio, the 2009 president of the Santa Clara County Association of Realtors to get some advice for homeowners, home buyers and home sellers.

by Broderick Perkins
© 2008 DeadlineNews.Com


Unauthorized use of this story is a copyright violation -- a federal crime

Deadline Newsroom - With so much uncertainty in the housing market, it's a good time to seek insight from real estate leaders who have their fingers on the pulse of this market. We recently sat down in a question-and-answer session with Quincy Virgilio, the 2009 president of the Santa Clara County Association of Realtors, to get some advice for homeowners, home buyers and home sellers in Silicon Valley

Virgilio is also broker and owner of Realty World -- California Property Network, and the Mortgage Network in San Jose. He has more than two decades of experience, a half decade of service with the association and 800 closed transactions under his belt.

He's married to Lynn Virgilio, advertising director at Grass Valley's historic The Union newspaper. They have two adult children Nicolette and Dominick. The family man is also an avid golfer known to bicycle a century for charity.

These days, much of his time is spent as the helm of the Santa Clara County Association of Realtors (SCCAOR).

Q: What is SCCAOR?

A: In our community, SCCAOR's role is to be the "go to" source for all things related to the real estate industry, to support private property rights and to bring home ownership opportunities to the community. The association is also a trade group serving members (7,700, down 16 percent from a year ago) with education, information and tools to be successful professionals. It also enforces our code of ethics and professional standards. Enforcement helps protect consumers (who have access to the enforcement process) by assuring that they get a transaction that meets our standards. SCCAOR members also benefit from our affiliation with the California Association of Realtors and the National Association of Realtors.

Q: What is your role as president of SCCAOR?

A: I am the face of the organization, my role is to represent our members publicly, and to lead our members, and our board of directors toward the successful completion of our goals.

Q: The housing crisis is on the minds of everyone, especially homeowners who are struggling to pay their mortgages, potential home buyers and those who want to sell their home. What steps are you, in your role as president, and SCCAOR taking to help homeowners keep their homes?

A: Part of our strategic plan is to make sure that organized real estate is at the table discussing, finding and implementing the help and solutions needed during this challenging time.

Our goal is to get involved at all levels of the governmental, political and civic communities working on these issues. Through these goals we are involved with the city of San Jose's foreclosure task force, and have already helped with a foreclosure fair where homeowners were able to work directly with their lenders to obtain loan modifications on the spot. It that was not possible, they got answers to their questions from reliable professionals. Another fair is coming in April.

I am also meeting with all of our city council members and county supervisors to examine ways that we can help them. We are trying to conduct public forums with council members in each district to discuss housing problems facing neighborhoods.

We are also working on a counseling program to help people through the process (of homeownership) and to connect with nonprofits already doing this work.

Q: Likewise, what can home buyers expect from the association?

A: Reliable information, direction and support.

Q: How does the association assist homeowners who want to sell their home?

A: This is the primary role of our Realtor members. We have a public website that helps connect buyers and sellers with our members. Go to SCCAOR.com and click on "Consumer Info."

Q: There have been some complaints from the real estate industry that the media is not fair in its coverage of the housing crisis. How can the media assist the association and the public in terms of reporting about the crisis and other housing issues?

A: Another goal for our association is to increase, with the media, the relevance and importance of our association and members. We are meeting with reporters and media sources to help them understand the importance of reporting accurate information. We are meeting with them to show that there are great opportunities coming out of the challenges we face. Now I know that good news simply does not sell, but I believe that being responsible and reporting the good news is going to go far with the readers, viewers and listeners. All media can help by contacting our association for the facts and reliable, accurate information prior to presenting a story.

Q: The Obama administration's "Homeowner Affordability and Stability Plan" rolled out in March. The $275 Billion Plan includes:

• A refinancing program for "responsible" borrowers who haven't missed payments and whose loans are larger than the value of their homes.

• A loan modification provision with incentives for lenders to modify certain mortgages.

• A change to bankruptcy rules to allow judicial mortgage modifications designed to reduce mortgage balances to fair market value.

How will these provisions play in Silicon Valley?

A: We must wait after the details are announced to determine the impact. Preliminary information reveals many of our homeowners may not qualify for help offered by the plan. Additional help eventually may be included for our higher cost area.

The reduction of mortgage balances by bankruptcy judges is a bad plan, one that will further hurt the recovery of the housing sector and stall the lending crisis. Lenders will have to factor this possibility into the price we pay for money, thereby raising interest rates to cover the potential losses incurred by the write downs. It's just a bad plan at the worst time.

One way everyone could be helped would be by allowing everyone to modify the terms of their loans to a 4 percent interest rate. If that does not help our economy, then I'm confused. If every homeowner could reduce their mortgage payments across the board, I think the money saved on mortgage payments would show up in consumer purchases.

Q: What advice do you think home sellers need most in the current housing market?

A: First, if you do not have to sell your home, don't! Now is not the time to test the market. Second, get accurate information from a reliable Realtor about what the market is saying. Remember, Realtors do not set the price at which your home will sell. The market does. Finally, be realistic when you price you home. Properly priced properties will sell quickly.

Q: What advice do you think home buyers need most in the current housing market?

A: You make your money when you buy your house. Buy right. Remember buying a home is a long term investment and, more importantly, buying a home is creating an asset that will grow over time. Take advantage of getting the lowest interest rate possible. That's the true cost of owning a home. With the current inventory levels, the right home is out there. Be sure to get professional help from a Realtor.

Q: What advice do you think homeowners most need in the current housing market?

A: Real estate is cyclical, and appreciation will return. If possible, pay down the principal balance on your existing mortgage and improve your equity position. Pay attention to what is going on in your neighborhood, and stay informed. Call your Realtor for reliable, accurate information. They'll be glad to help.

Q: Are there any comments you'd like to make to your constituency, consumers or the public at large?

A: I would encourage everyone to get involved. There's a lot going on in our community and, now more than ever, we need everyone to be pushing in the same direction.


© 2008 DeadlineNews.Com

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Broderick Perkins, an award-winning consumer journalist, parlayed 30 years of old-school journalism into a digital real estate news service, the San Jose, CA-based DeadlineNews Group -- DeadlineNews.Com, a real estate news and consulting service and Web site and the Deadline Newsroom, DeadlineNews.Com's news back shop. Perkins is also a National Real Estate Examiner. All the news that really hits home from three locations -- that's location, location, location!

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200,000 Silicon Valley homeowners up for property tax reductions

200,000 on deck for property tax reduction.

Some 200,000 Silicon Valley homeowners, about half those in the Santa Clara County region, may soon enjoy a hefty reduction in property taxes.

by Broderick Perkins
© 2008 DeadlineNews.Com


Unauthorized use of this story is a copyright violation -- a federal crime

Deadline Newsroom - Some 200,000 Silicon Valley homeowners, about half those in the Santa Clara County region, may soon enjoy a hefty reduction in property taxes.

The reduction will be temporary, but that could be a long temporary and the break could save some homeowners hundreds if not thousands of dollars a year -- and they may not have to lift a finger to get the small windfall.

Santa Clara County Assessor's office has recognized the steep decline in real estate property values and has begun a wholesale review of some 200,000 property values to determine if they are eligible for a reduction in assessed values.

All properties involved in transactions since January 1, 2000 will get market values reviewed.

"Obviously, not every community is the same. The value decline in Palo Alto and Los Altos is vastly different from the much steeper degree of decline in Gilroy, Morgan Hill, East San Jose or Milpitas," said County Assessor Larry Stone.

Property taxes in Santa Clara County amount to about 1.25 percent of the assessed property value. The assessed property value is set, most often, based on a property's last sales price. For example, a property purchased for $500,000 comes with property taxes each year of about $6,250. However, when property values fall (or rise), provisions in tax law allow the assessor to lower (or raise) assessed values and, right now, that could mean lower values and lower property taxes.

The review should be completed in June with any reassessed values to show up on the 2008 to 2009 property tax rolls due beginning later this year.

Home prices tabulated by a host of Santa Clara County sources show prices have fallen by as much as 50 percent or more in the last year, depending upon the location of the property. Forecasts call for continued drop in prices and prolonged depressed values. Once values return to their pre-adjusted levels, however, property taxes can be returned, on a fast track, to those levels.

Even after the assessor lowers any property values, homeowners can still appeal the assessed value -- at no cost -- by filing an appeal directly with the assessors office.

The assessor cautioned taxpayers to be wary of solicitations promising reduced assessed values in exchange for a fee. A recent solicitation this tax year sought to get homebuyers to send in $179 for a property value assessment appeal, after the period for such appeals had already ended.

See: Beware bogus 'Property Tax Reassessment' letter

"It is outrageous. There's simply no reason for a property owner to pay a fee to a private company for a service taxpayers receive from the Assessor’s Office without charge. Property owners most likely eligible for an automatic reduction in their property’s assessed value are being inundated by these questionable operators who are feeding upon the increased fears of homeowners stressed by a declining real estate market and the loss of equity," said Stone.

"My best advice on hiring someone to help you appeal your assessed value is to wait until you get your notification card,” said Stone.

Last year, the Assessor’s Office temporarily reduced the assessed value on over 45,000 properties for a total reduction in excess of $5 billion.

"Everyone who received a reduction last year is nearly certain to receive at least the same level of reduction, and perhaps substantially more. While I rarely make predictions, I fully expect that the number of property owners receiving reductions will increase this year," said Stone.

Between now and June, the Assessor’s Office will review the assessed value of nearly 200,000 properties to determine if the market value, as of January 1, has fallen below the original assessed value.

Once all properties are assessed, the Assessor’s Office will mail an assessment notification card to every property owner. This year, that notice is expected to arrive during the last week of June, a tad later than usual because of the extra workload.

If a property owner disagrees with the value on the notification card, they are encouraged to contact the Assessor’s Office to request a review. A simple interactive form is available on line on the assessor’s website.

Again, the service is free.

Avoid official-looking solicitations that claim "due dates" and request "payments due."

© 2008 DeadlineNews.Com

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Broderick Perkins, an award-winning consumer journalist, parlayed 30 years of old-school journalism into a digital real estate news service, the San Jose, CA-based DeadlineNews Group -- DeadlineNews.Com, a real estate news and consulting service and Web site and the Deadline Newsroom, DeadlineNews.Com's news back shop. Perkins is also a National Real Estate Examiner. All the news that really hits home from three locations -- that's location, location, location!

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Is Silicon Valley poised to go golden, again?

Quincy Virgilio
SCCAOR President

If past shifts in the Silicon Valley, CA housing market are any indication, it could be a good time to get a chunk of real estate known to go golden.

by Broderick Perkins
© 2008 DeadlineNews.Com

Unauthorized use of this story is a copyright violation -- a federal crime.

Deadline Newsroom - If past shifts in the Silicon Valley, CA housing market are any indication, it could be a good time to get a chunk of real estate known to go golden.

When the price of all homes -- new, resale, condos and single-family homes -- were tallied, the median price sank from $655,000 to $436,000 a 33.4 percent drop according to San Diego-based DataQuick.

The lower prices have improved home sales so much that more than one in three sellers are getting more than their asking price. The average for the area is 97 percent of the asking price.

In December, 35 percent of all sellers got more than their asking price in Silicon Valley. Some of that was from distressed properties where low-ball prices caused buyers to swoop in and bid up the price, said Richard Calhoun, broker-owner of San Jose-based Creekside Realty.

Calhoun and others say the lower median doesn't mean all homes have lost 40 percent of their value. Some hard hit areas have experienced value drops as high as 50 percent from December-to-December. However, the median is tilted by a greater share of sales coming from more affordable housing regions -- just the opposite of what happened during boom times.

"The median price is a statistical number that marks the 'middle price' for sales -- exactly half of the area's sales was above the median. The other half was below the median. When the median falls, it indicates that more lower-priced homes are selling than higher-priced homes," said Stefan Walker, a broker with Alain Pinel Realtors in Los Gatos.

During the boom, east, central and south Santa Clara County yielded about 7 to 12 percent of the region's home sales. Higher-end districts to the west, Cupertino, Los Gatos, and more affluent areas enjoyed a larger share of sales then. That caused the median single-family home price to skyrocket to a record $870,000 in the spring of 2007. But more recently, a full third of the Silicon Valley's market sales have sprung from more affordable markets.

"What was 700 days of unsold inventory on the east side is now 130. That's a dramatic improvement," said Calhoun.

However, the lower sales, falling prices and unknown number of foreclosures yet to hit the market, do tend to depress prices in all regions.

Interest rates are cooperating.

Freddie Mac put the average fixed rate for 30-year conventional loans mortgages at 5.12 percent on Jan. 22, only slightly higher than the 4.96 percent rate weeks earlier -- the lowest average since1971, when Freddie Mac first started tracking rates.

Quincy Virgilio, president of the Santa Clara County Association of Realtors, says the confluence of low prices and low rates is increasing the number of closed sales by contributing to greater affordability.

The California Association of Realtors' "First Time Buyer Housing Affordability Index" for Silicon Valley nearly doubled from the third quarter 2007 to the third quarter 2008. The index rose from 21 to 39 during the period.

The index measures the percentage of households that can afford to purchase an entry-level home in a given area. DataQuick said throughout the nine-county San Francisco Bay Area, the typical monthly mortgage payment dropped to $1,471 in December 2008, from $2,848 in December 2007.

High rents are also prompting renters to buy.

San Jose's average $1,708 monthly rate, the last time Novato-based RealFacts checked, was the fourth highest in the nation.

RealFacts tracks large apartment complexes with an average 255 units, rather than smaller properties where rents could be less.

Home loan money remains tight, but a shift to more sensible financing is also prompting consumers take the home buying plunge.

For more on mortgages see:
• Mortgages that are surviving the crunch

Related stories include:
• Why buyers aren't buying, but how they can
• Bleak new home sales data dashes forecasts

© 2008 DeadlineNews.Com

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Affordability Moving Into Silicon Valley

Growing affordability already appears to be clearing the logjam of unsold homes and tightfisted sellers are taking note. New data contains evidence of greater affordability likely in the near future, but the market is moving closer to equilibrium -- that market bottom where prices stop falling.

by Broderick Perkins
© 2008 DeadlineNews.Com

Unauthorized use of this story is a copyright violation -- a federal crime

Deadline Newsroom - There may not be a whole lot more wait-and-see room left for fence-sitters in Silicon Valley's housing market.

Growing affordability already appears to be clearing the logjam of unsold homes and tightfisted sellers are taking note. New data contains evidence of greater affordability likely in the near future, but the market is moving closer to equilibrium -- that market bottom where prices stop falling.

That bottom could arrive sooner than expected.

"Affordability, relatively speaking, is way up and that's driving the lower end of the market. The REO market is robust and the low end is robust. There's some languishing in the higher end where the credit crunch is still a problem," said David Walsh, president of the Santa Clara County Association of Realtors.

Right now, Silicon Valley home buyers can find homes with a 20 to 40 percent markdown, compared to last year's prices. But they can just as easily find homes with a 20 to 40 percent or even greater markup.

"My clients are buying properties well below their peaks. Just closed today -- a condo downtown San Jose purchased two years ago for $460,000. My borrower bought it for $340,000," said Stephanie Noryko, broker owner of Granite Financial Real Estate Loans in Cupertino.

Break out market

Those large discounts and markups, however, are found in fewer, select neighborhoods at either end of the price spectrum. There's a greater, more significant market segment in the middle price ground.

Comprising about 60 percent of the current market, geographically, the middle ground includes larger community swaths of homes with prices that are down by no more than 20 percent nor up more than 20 percent, according to the July 26 LaJolla-based DataQuick's weekly ZIP Code-based home price map for Silicon Valley.

"The homes that were selling slow (in the lower price range), that segment is improving slowly. The (higher-end) market that was doing well is still doing well, but less well than it was," said Richard Calhoun, broker owner of Creekside Realty in San Jose.

High end home sales had managed to keep the median price aloft for much of last year, but with some backing off in the high end neighborhoods and continued troubles in the low end, a reversed trend is showing up in the median price.

Calhoun, a number-crunching statistician of a real estate broker, said the median single-family home price (in closed sales) in June 2007 was $865,000. By this June, the median had fallen a whopping $115,000 to $750,000.

That 13 percent June-to-June decline has been largely due to overwhelming problems in middle- and low-priced homes, segments hit hardest by foreclosures and the tight credit market. Foreclosures, short sales and the like bring down prices because affected properties show up on the market as distressed properties, auction material and REOs (for "real estate owned" -- repossessed homes), all priced to move.

Foreclosures were up 194 percent from 1,275 during the second quarter last year to 3,751 during the same period this year in Santa Clara County. Only five counties had a greater rate of increase in foreclosures -- Merced, Monterey, Santa Cruz, Sonoma and Sutter, according to DataQuick Information Services in La Jolla.

Affordability growth

Unfortunately, the law of the housing jungle today means one person's anguish is another's affordability.
"There are markets, and there are markets. Some markets are good for buying, others are good for selling," said Eric Nelson, mortgage broker and owner of the Honte Group in Campbell.

The California Association of Realtors said in Silicon Valley, 31 percent of households could afford the entry level price of $663,000 in the first quarter, up from 27 percent a year earlier.

Likewise, the Emeryville-based PMI Group's Affordability Index for the San Jose Metropolitan Statistical Area (MSA) was about 68 during the first quarter of 2007, just before prices peaked. In the first quarter this year, the index rose to 80, thanks to lower prices. An index score that exceeds 100 indicates that homes have become more affordable; a score below 100 means they are less affordable.

With the lower price-spawned affordability comes less risk of further large price reductions.
The PMI Risk Index for Silicon Valley came in at 56 two years ago this summer, a year before prices peaked. Now, a year after the peak, the index is down to about 51 percent. The index score translates to a percentage that predicts the probability that house prices will be lower in two years. The latest number means there's a 51 percent chance of lower prices in the next two years. That's almost even odds.

"The market is really alive and well, depending upon what segment you are looking at," added Walsh, who is also a vice president at Alain Pinel.

But here's the rub.

Affordability generates demand that could leave fence sitters, well, perched.

More, faster sales

Walsh, in his "Santa Clara County End of July" report to association members, said the number of pending sales in Silicon Valley, at 2,290 had grown 70 percent above the 1,351 pending sales from a year ago. More buyers are buying.

"The active demand to purchase properties is still showing a climbing trend, especially with respect to lower priced and REO properties," Walsh said.

Some sales are seasonal by nature, but Calhoun also reveals closed sales of single family homes were likewise up steadily every month this year from 338 in January to 927 in June. Last June the number was 977.

"This current time is perhaps the best time to buy in nearly 20 years. There is twice the normal inventory of homes for sale, and there is an overwhelming amount of foreclosures on the market," said Nelson.

Homes are selling faster too. The average numbers of days on the market for single-family homes in closed sales was 74 in June this year, down from 88 in January, but still well off the June 2007 figure of 45 days.

Days of unsold inventories (DUI) came in at 125 days, compared to about 250 in January and about 117 a year ago. DUI is the theoretical number of days it would take to sell off the current inventory, at the present sales rate, if no other homes came on the market.

Seller squeeze

Another word of caution for hesitant buyers, sellers may already be putting the breaks on price breaks. The gap between the median asking price (what sellers want) and the actual closed price (what sellers actually get) narrowed in June this year.

Last June, during peak market times, sellers were getting, on average, 100 percent of their asking prices from buyers. This June, buyers gave sellers $9,000 less than the asking price, but that was the smallest differential for all of 2008, except for March when the difference was $5,000.

Compare that with January this year, when buyers shorted sellers by an average $25,500 and with April, when buyers paid an average $30,000 less than asking, according to Calhoun.

"It still seems to ring true that pricing your home right is hugely important. An overpriced home just sits and sits. I don't understand why people don't start with a lower price. When the owner finally decides to lower the price, it gets labeled as a problem property," said Noryko.
© 2008 DeadlineNews.Com

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