Wednesday, September 16, 2009

Market Has Hit Bottom? hmmm.. yes.

A very good indication of where the market is heading in a given area is the level of inventory of homes available at a given time, and compare this to the past.

In the County of Santa Clara, where we have been hit hard by the downturn in the past year or so, the inventory of available homes (SFR's and condo/townhouses combined) as of 9/11/09 stands at 3,315; a year ago at the same time, it was 6,844, and in 2007, it was 6,542.

This level of inventory has not been that low since January of 2007.I believe this sets the stage for a very healthy market.We have seen in the past months an impressive number of foreclosures being bought from investors and home buyers alike, often in multiple offers situations.

It is important to remember too that the percentage of houses which sold for more than the listing price, in the County of Santa Clara, has been consistently above 30% for the past year, and stands now at 40.6%. (Sunday real estate section in the SJ Merc.). Who would think based on the news articles in the papers?

For instant insight and smart graphs on the market, County-wide, and area by area within the Cities, go to:

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Wednesday, February 25, 2009

How is the market doing these days?... (2)...

...or: another way to ask the question may be: “how are the mortgage rates these days?”

How much home you can afford is affected by mortgage interest rates. Where the interest rates are right now, for each additional percentage point, the payment on a $600k loan would be an additional $381 per month, which is roughly equivalent to a purchase amount of $64,000. Interest rates are at an historical low as shown below, and the consensus among the financial specialists is that it will not continue that way for ever. … The fear of inflation is real.

During the last downturn, a lot of people started to get in the market as soon as it was evident that interest rates were increasing. The same phenomenon might occur again, reducing the comfort and purchasing power for those waiting to “time the market”.

As written recently in an article in Realtytimes®, “the average homeowner is worth 35 times more than the average renter”.

Owning a home becomes part of your investment portfolio, provides tax benefits, allows you build equity (yes, it still exists), and … if you buy now, you may get an excellent deal. Of course, you need to consider how long you would be in the home. You need to plan on staying at least 3 to 5 years in a house. Although even if you have an unexpected move, a valid strategy is to keep the property and rent it out.

Finally, with the last changes from the administration, new home buyers will receive substantial subsidies, just to make the step to homeownership. Definitely something to consider… For more information on this subject, do not hesitate to contact me.

As always, I advise buyers to find the place they love, and buy it for many years to come in a safe, affordable way.

Francis C. Rolland

Wednesday, January 21, 2009

How is the market doing these days?

.. The million dollar question...
The answer locally is very specific to the town, and within a town very specific to the area, and the price range. There is no immediate “cover-it-all” qualification. One thing for sure: the good schools are at an all-high premium.
Only a full-time agent can tell you ahead of the News how the market is faring, by feeling the pulse of the market. One way I “feel” the market is by sharing with my colleagues their open house experience. Right now, it is very positive, in that we see a lot of pre-approved buyers going to open houses in large numbers. The clientele is picky, looking for a bargain, but is there to buy.
Based on that, I do not think the market is going to “crash” like some news articles report. Prices will continue to adjust quickly as they always do in the Valley, but I would not try to “time” the market: what counts is to buy a house you love, at a price you know you can afford comfortably.
Francis C. ROLLAND