The real price of buying..

The real price of buying is the cost of buying.
Will prices continue to fall? Should I buy now?

While price is always one of the major concerns when buying a property, cost and affordability should be at the forefront of your considerations as a buyer.

That means you have to take into account what your monthly payment will be, considering not only the price of the home but also the interest rate of your mortgage. Waiting for prices to bottom out while rates are increasing can wind up costing a lot more.

So the price of the property is, in a way, not the thing to focus on: if interest rates are low enough, the home that will make you happy could be a lot lower in price than you'd think. - I know, I know, no one wants to over pay for a property; but this is an other matter - and so "relative".

We cannot control what the market will be doing, but we can control how we address our housing expenses. 

So I say, look at what is comfortable to own, without breaking the bank, and see if something fits the bill.

On the subject of interest rates:  all lending and financing institutions, like Fannie Mae (FNMA – the Federal National Mortgage Association), Freddie Mac (Federal Home Loan Mortgage Corporation), the National Assocation of Realtors, PMI (Private Mortgage Insurance) and the Mortgage Bankers Association are all projecting rising interest rates over the next several quarters.

Although I have to say, personally, that I did not expect rates to stay so low so long.  So who knows.  If you have an opinion, chime in!

Francis

Silicon Valley real estate
Silicon Valley Smart graphs

Market trend in Mountain View - price/sq.ft

Market trends -  Mountain View:
Following some of my last blogs on average prices in Mountain View and Los Altos, someone asked me to show the evolution of $ price per square foot.



 

So, how is “Google’s” City doing in that respect? 

  As always with figures and statistics one has to take the information with a grain of salt, or a good dose of caution. The figures can be deceiving.
The price per square foot is a good measure of the activity, as part of a combination of measures. It is shown below for the market of condominiums and townhouses, for the past 3 years; it is showing a lower value as we go into 2011:

…and for the house market, it shows a very healthy trend:

But this is one element of a big picture. In this case it is good to remember that as a property is larger, the price per square foot is lower. So the figures may also partly reflect a difference in average size of the properties sold.

Curious about another City? Do let me know at francis@frolland.com

Silicon Valley real estate
Search the MLS

A link of interest: recycling event in Los Altos next week.

Los Altos prices: condos vs houses.

In the category: condominiums vs houses, I was curious to see how Los Altos fared, in plain simple terms.


Does it vary a lot from one City to another?  Not much: it turns out that it is fairly similar between Los Altos and Mountain View.
The following graph shows how condominiums and houses evolved in the past 5 years:

In Los Altos the condominium market started to be soft earlier than houses, and is a little slower to recover; - but overall is doing very well.




Los Altos townhall

  From the average price in 2006 to the average price in 2010, condominiums lost 4.3% in value, while houses lost 5.3% .  This is about the same as what the market did in Mountain View.

I think what is important to note is the general direction these figures point to, and the general idea that the peak was in 2007 - 2008, and the low 2009.

Again, it mirrors fairly closely what the County of Santa Clara experienced.      --Are you curious about your area? Let me know I am curious too.  I'll run the figures for you.
Francis
Testimonials



Silicon Valley real estate

Silicon Valley and FHA loans..

Home prices are pretty high in the Silicon Valley.  Here, where sometimes wages are comfortable and disposable income or savings pretty low, it is good to remember that it is still possible to purchase a home with as little as 3.5% downpayment. 

How is it possible? with an FHA loan, which is an (almost) normal loan, guaranteed by the Federal Housing Administration.

How does it work? Well it is fairly easy in fact - there are few limitations: the buyer does not have to be a first-time home buyer, there is no limitation of income for the buyer, and the property purchased can be pretty much any price.  The loan amount is limited to about $730,000.

So I like to remind my clients of this option if they have little savings or family help for the downpayment, or if their salary is modest: they can still think in terms of homeownership while prices and interest rates are low.  It is quite a good loan, with an attractive interest rate (at or slightly lower rate than a normal conventional loan).  It is a little more expensive to get: there is a 1% upfront fee for the mortgage insurance and a fee of about 1% every year on the amount of the loan.  Note: If it is used to purchase a condominium, the complex has to be FHA approved.

If you know someone who wants to take advantage of such a loan program let me know: I will share names of lenders who know FHA loans well.  Time is also important: the loan limit will go down on October 1st to $625,500. 

Thanks for reading, and sharing!
Francis Rolland
- Since 1985

Silicon Valley real estate
Search for homes in Los Altos

A link of interest:  American Legion Santa Clara Post 419

Mountain View prices: condos vs houses

To piggy back on my last blog, it is definitely interesting to research and compare how different areas within Mountain View (or any City for that matter) may have fared in the past 4 years, whether in the condominium market or the house market.  But how did houses fare vs condominiums?

It turns out that they did about the same:  from the average price in 2006 to the average price in 2010, condominiums lost 4.4% in value, while houses lost 3.4%  - a close contest.  The only thing one can see is that the condominium market went down faster than the house market in 2008 - in average figures... not in median figures.

It mirrors fairly closely what the County of Santa Clara experienced.  Are you curious about your area?  Let me know I am curious too.

Francis

Silicon Valley real estate

A link worthy of interest:  Community Services Agency

How do you search for a home in Mountain View ?...

How do you search for a home in Mountain View ?...

There are plenty of search engines that will help you search for a home online, (i.e. see at the end of this post), but the first step is often to know where in town you would like to be ideally. Most areas in Mountain View are associated with a name, and there is an app for that – I mean a map for that, in the “Neighborhoods” publication of the Mountain View Voice. It looks like this:



Just click on it to see it in more details.

MLS areas, used by real estate agents, function somewhat in the same manner, so that for instance it is easy to look for properties, say, on the North of Central expressway, or downtown, or in “Cuesta Park”… you can mix that with other criteria like: schools, age, size, etc… there are more than 300 criteria to search by in the MLS. So, when the time comes to really look for your dream house, it makes sense to work with a professional who knows his (MLS) tools and areas.

I love it when asked questions like “which area appreciates most” or “lost most value”. It is absolutely possible to check this out, but it just takes time, and you need to know exactly what type of property you are researching. Curious about a specific neighborhood? Let me know.

Thanks for reading.

MLS search in Mountain View, CA
Home statistics – Silicon Valley

A link worthy of interest: http://www.ourbrothershome.org/

Median prices: a perspective - California vs local. Mountain View

Single family residences:
 
California median home price: February 2011: $271,320 (Source: C.A.R.)

California highest median home price by region/county February 2011: Marin $632,580 (Source: C.A.R.)

California lowest median home price by region/county February 2011: Merced $117,270 (Source: C.A.R.)

Santa Clara County median home price in March: $ 567,500,
Mountain View median home price in March:       $ 880,000
Los Altos median home price in March:                $ 1,595,500
Palo Alto median home price in March:                $ 1,564,000
(A lot) More Cities and details at:   Santa Clara County  and San Mateo County
 
Thanks for your interest!
Francis
 
Silicon Valley real estate.
Search the MLS from the comfort of your home.

Santa Clara County real estate pulse... + notable fundraising event

The average price for a house in the Silicon Valley (Santa Clara County to be more precise) went up a whopping 14% when compared with the month of February (to ~ $767K), and about 3.6% over what it was a year ago. (note: this is "average", not "median").

There is a graph, published every week in the San Jose Mercury News real estate section, that shows that about 34% of houses sell for more than list price in the County.  How can it be, one wonders?

Some of it is, for instance, in what happened to one of my clients recently when placing an offer of an REO (= real estate owned; or in other words, a foreclosure): there were 7 offers, and of course the sales price is going to be higher than the asking price.  We have a very enviable situation in our area, in that investors and homeowners alike see value in the Valley, and when prices are low enough, they buy.  Also, there is quite a bit of money in the Valley.  As a consequence, property values are quite sustained, and in the best areas the market is competitive - a sellers' market.


For single family homes - 3-month moving average.

Coming soon near you:  Craft Faire: an exciting fundraising event for our veterans programs. The event will have about 40 crafters indoors and outside at the American Legion Hall, 958 Homestead Road, Santa Clara. The hall is located just a few blocks from El Camino and is near the corner of Lafayette & Homestead. The event will be held on April 9th from 9 a.m. to 4 p.m.

Thank you for reading!
Francis

Silicon Valley real estate.