Guide to Buying Your First Home

Down times are excellent times to be buying a home.  

Some of my clients were not bothered buying their first home in the worst of time, like at the worst of the last crisis.  With hindsight, they are the smart ones now.  Yes the market has slowed down, and prices are back to what they were last year, but so what? Buying a home is for the long term.

I always remind my clients: as long as you can afford comfortably the home you buy, you have a fairly
stable job, and you know you can find a new job should you lose your current one, then any time is good.  If you know you may have to sell in one or two years, then it may be best to continue renting until you are more sure of your situation.  Otherwise, why continue paying a mortgage - your landlord's mortgage?

This being said, buying a house requires a significant amount of money and time. The journey isn’t always easy, but when you get the keys to your new home, it can be one of the most rewarding feelings ever. 

Knowing the home-buying journey, what tools are at your disposal and creating relationships with experts who can help you get the job done is the key to getting there.

 Here is a link to this nice article, a recap of what to think about.  Source: House Logic

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Francis

Silicon Valley real estate

Tre

nds: Local prices and graphs.

How much is your home worth?

Conforming Loan Limits are raised to $1,089,300 !

 Conforming Loan Limits are raised to $1,089,300  by the Federal Housing Finance Agency, and this is a big deal for home buyers in California.  

Why is it so?  because "jumbo loans" which amounts would be higher than the "conforming loan limit" are less flexible in their conditions.  This means that buyers can qualify more easily as they seek to purchase a California home, which is often much higher than the previous limit of $970,800 in high cost areas.  This nationwide figure needed to adjust to the price level that is more common in California.

“C.A.R. [the California Association of Realtors] applauds the FHFA for its continued commitment to homeownership by increasing the conforming loan limits. The higher limits will help make homeownership more accessible to Californians across the state and provide homebuyers with more financing opportunities,” said C.A.R. President Jennifer Branchini, a Bay Area REALTOR®. “This year in California, nearly one out of every four homes sold between $1.25 million and $2 million were purchased by first-time homebuyers,” Branchini said.

C.A.R. and the NATIONAL ASSOCIATION OF REALTORS® (NAR) both have long advocated for loan limits that reflect an area’s cost of housing. As a result of C.A.R.’s and NAR’s efforts, areas with high median home prices have benefited from a loan limit above the national conforming loan limit.

Source: California Association of Realtors

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Francis

Silicon Valley real estate
Tre

nds: Local prices and graphs.

How much is your home worth?

International Home Purchases in California Drop

 Key Highlights

International buyers purchased $59 billion worth of U.S. residential properties from April 2021–March 2022, up 8.5% from the previous year and breaking a three-year streak of declines. 

The average ($598,200) and median ($366,100) purchase prices for international buyers were the highest ever recorded by NAR.

China, Canada, India, Mexico and Brazil were the top five countries of origin by U.S. residential sales dollar volume. The top U.S. destinations for foreign buyers were Florida, California, Texas, Arizona, New York and North Carolina.

See the full article here by Troy Green, National Association of Realtors.

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Francis

Silicon Valley real estate
Tre

nds: Local prices and graphs.

How much is your home worth?

A Few Local Real Estate Pointers

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Francis

Silicon Valley real estate
Tre

nds: Local prices and graphs.

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Just Sold: 876 Elbridge Way, Palo Alto

Santa Clara County Home Prices Seasonality

These are the average and median prices for all sold homes combined in the County of Santa Clara over the past 2 and a half years, month after month.

In this graph we can see that:

- while January is always lower, the best months for a higher sales price (in average) are March to June. while we note that, we have to remember that January average prices are the results of DEC. sales, so all months graphs are the results of the previous months sales.  It is not true of all transactions, of course, but we are talking "statistics" here.  This is over a large number of transactions.

- the arrows point to the usual rebound in prices in September and October, after the months of July and August, which are traditionally slower.

- the months of November and December are traditionally slower and prices are down during these months - as an average.  This was not true this past year though in 2021, and this is noteworthy.  In fact, "in the trenches", us Realtors were surprised to see the level of activity in November and December.  In general at that time of the year buyers can expect a more relaxed and slower market.   Well, not in 2021! 

- prices in 2022 are geared for an overall up year as an average; the market started very strong at the beginning of the year, and as we now know has slowed down significantly around may (which is more visible on the median price graphs).  However the market is still very active, just not at the high of April-May.  The market is now more balanced, with fewer multiple offers and prices which have scaled back at the level of six to nine months ago.  

It is important to remember that:

1/ multiple offers depend on the asking price.  A very low asking price will draw multiple offers.

2/ it is not expected that prices will "crash" as demand is still very strong, and interest rates are still historically low, as the 3rd graph shows.

3/ a recession, even if it comes around, does not equate necessarily to lower real estate prices - see the last graph.

4/ most analysts and banks forecast real estate prices up every year for the coming years.

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Francis

Silicon Valley real estate
Tre

nds: Local prices and graphs.

How much is your home worth?

Just Sold: 876 Elbridge Way, Palo Alto

Why It's Harder For Millenials to Buy a Home

 Source: The Skimm

Buying a house can feel next to impossible these days. But it’s not just the price of homes or mortgage rates going up that’s keeping the housing market tight. Long before the pandemic made supply chain issues commonplace, millennials have had extra trouble becoming homeowners.

Some of the reasons why it’s difficult include a slowdown in homebuilding after the Great Recession, home prices that have outpaced wages, boomers who are staying in their homes longer, investors and investment firms buying up the kinds of properties that appeal to first-time buyers, and student loan debt.

Read the full article here.

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Francis

Silicon Valley real estate
Tre

nds: Local prices and graphs.

How much is your home worth?

Just Sold: 876 Elbridge Way, Palo Alto

Title Insurance 101 - "Chain of Title"

‘Chain of title,’ as real estate professionals know, refers to the history of a property’s ownership as far back as records can trace it.

In some cases, a property’s chain of title may go hundreds of years, back to when the government first granted the right of ownership of the land, by way of Patent - and perhaps the home’s first owner. Today, when a new buyer closes, and the paperwork is filed with the local office that handles real estate records and filings, the new owner’s name will join that chain.

As the new owner, buyers need to be sure that any liabilities carried by the seller are resolved at closing and will never become a burden to them. They should know that the title or closing office will do everything possible to ensure that any such liabilities have been satisfied before the transaction is complete....

Read why Title Insurance is essential for you as you purchase a home:  see the full article brought to us by our very own Kelly Vincelette and Suzanne Borg of Cornerstone Title Insurance, and written by Barbara Ponin with RISMedia.

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Francis

Silicon Valley real estate
Tre

nds: Local prices and graphs.

How much is your home worth?

Condo Construction Growing

This article is: BY ROBERT DIETZ  of the NAHB

According to NAHB analysis of quarterly Census data, the count of multifamily, for-sale housing starts increased during the first quarter of 2022. At 11,000 units started, this was the best quarter for condo construction since the third quarter of 2008.

This is particularly important for us in the Bay Area because land is so scarce.  We do see a lot of new condos popping up, although a lot of the new construction in the past 3-4 years has been in apartment complexes, with high rents.

See the full Article here.

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Francis

Silicon Valley real estate
Tre

nds: Local prices and graphs.

How much is your home worth?

One third of couples buy homes before marriage

 Source: Realtor.com

Skyrocketing home prices are driving more non-married couples to buy a home before getting hitched, according to a survey by realtor.com®. 

Thirty-one percent of all Americans and 41% of 18-to-34-year-olds say they’ve purchased a primary residence with someone they aren’t married to. Additionally, more than half (55%) of
Americans and 68% of 18-to-34-year-olds say they would consider it. The most common co-buyers are romantic partners who are not engaged or married (15%). But Americans are also open to buying with extended family members or roommates.

Read the whole article here to see the different relationship statuses.

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Francis

Silicon Valley real estate
Tre

nds: Local prices and graphs.

How much is your home worth?

Past Two Years: Evolution of Prices, Locally - Silicon Valley

These figures are Average sales prices for all houses, condos and townhomes combined.

SCC:  +41% - between Jan. 2020 and Dec. 2021 - SMC: +40%   

Along with these figures, here are a few data points: 

Nationwide, borrowers had a record $9.4 trillion in tappable home equity collectively, or an average of $178,000 per borrower, according to Black Knight.  In California, home sellers typically pocketed a net cash gain of $322,500 from the sale of their homes in 2021 – a 96% increase from the purchase price.

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Francis

Silicon Valley real estate
Tre

nds: Local prices and graphs.

How much is your home worth?

Consumer Sentiment January 2022

 Tough times for buyers....

My advice, after working through several of those up and down cycles: save yourselves all the rookies mistakes in purchasing a home (like working with a discount agent): hire an experienced professional who is patient and persistent, and well-known in the Realtors community.

For sellers: yes it is easy to find a buyer for your property right now, but it is not a reason to cut corners with your mandated disclosures.  Here again, I would advise the same: work with a seasoned professional. 

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Francis

Silicon Valley real estate
Tre

nds: Local prices and graphs.

How much is your home worth?

California Homebuying Behaviors

California Homebuying Behaviors - Pandemic.

The COVID-19 pandemic continued to drive strong homebuying interest and intensify market competition while changing consumers’ housing preferences and fueling sellers’ home equity, according to C.A.R.’s 2021 Annual Housing Market Survey. 

With remote working becoming the norm, buyers’ reasons for purchasing in 2021 were unchanged since the Coronavirus outbreak, with the top three reasons remaining the same as last year. More than one-fourth of REALTORS® said their buyer clients purchased a home because they were tired of renting;

One in five said their buyers purchased because they desired a larger home; and one in six REALTORS® said buyers bought because they wanted a better location.  Source: CALIFORNIA ASSN. OF REALTORS®

 

More supercharged buying info in this article from the CaliforniaAssociation of Realtors®

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Francis

Silicon Valley real estate
Tre

nds: Local prices and graphs.

How much is your home worth?

Buyers Get Ready for Another Crazy Housing Market in 2022

Source: CNN Business

As baby boomers hit retirement, more millennials will reach peak first-time homebuying age, which means they’ll be competing in a market short on housing inventory. While the market will slow a bit from the surge in demand it saw in 2021, sellers will remain in control. Zillow expects prospective buyers will face bidding wars, difficult trade-offs and frustration.

Zillow expects more than 6 million people to buy a home in 2022, many of them for the first time. To be sure, the obstacles they will face are many. The continued intense competition will add upward pressure to home prices, making it especially difficult for first-time buyers to afford a home. 

See the full article here.

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Francis

Silicon Valley real estate
Tre

nds: Local prices and graphs.

How much is your home worth?