Properties for sale "off MLS"

The market is so "hot" in the Valley that it is easy to sell a property without putting it in the MLS (multiple listing service). While it may be the way to go for very specific situations or sellers' requirements, statistically the vast majority of agents agree that it may not bring the best deal overall for the seller.  If you are thinking of selling your property "off market", I'll be glad to go over the advantages and disadvantages of such a strategy.  But unless you have very specific needs to address, it will be hard to find any benefits to doing it without the vast exposure of the MLS.

• Real estate agents marketing a property for which they have obtained a listing generally will place that listing on the Multiple Listing Service (MLS). At times, however, listings are not placed into the MLS. These listings are commonly referred to as off-MLS or pocket listings.
• While not a new concept, pocket listings are growing in number – as many as 10 percent to 15 percent of homes offered for sale today are “off-MLS” listings, according to one MLS.     
• Sellers should strongly urge their agent to place their home on the MLS. A property that is listed on the MLS has the advantage of being marketed to every real estate agent who belongs to the MLS and, through those agents, to their vast network of potential buyers.
• Active marketing on the MLS usually includes open houses, broker tours, and inclusion of the seller’s property in the MLS’ download to various real estate Internet sites commonly used by the public to search for properties.
• A pocket listing generally is marketed by a single agent to one or a select few potential buyers. The marketing pool can be so small that in some cases, other agents within the same brokerage or brokerage office may not even be aware that a fellow agent has the listing.
• While pocket listings sometimes are requested by sellers who wish to maintain their privacy, the downsides to off-MLS listings outweigh the advantages. Primarily, the pool of real estate agents and potential home buyers who will know the property is for sale and make an offer to purchase may be limited. With fewer offers, sellers may not receive the best possible price for their home.

 

Thanks for reading!

Francis

 

Silicon Valley real estate specialist
Detailed, local trends etc...
Current mortgage rates

What do Real Estate Investors buy?

I have been working with investors as well as homeowners in the past few years, through the crisis, and I do agree that investors had a very good and favorable role in the recovery.  This is why I am always curious to see the exact role and impact investors have on the market.

The California Association of Realtors just released a survey of the types of purchases investors have been making.  Here are some of the interesting point:

Investors have played a key role in the California housing market recovery for the past four years. 

Two-thirds (66 percent) of investors who worked with a REALTOR® indicated they are going to keep the property for more than a year, while about one-fourth (26 percent) of investors intend to flip the property within a year.

Additionally, three-fourths of investors are of the small mom-and-pop type, owning 1-10 other investment properties, with 15 percent owning just one property, 46 percent owning 2-5 properties, and 14 percent owning 6-10 properties.  
      
Of the properties purchased by investors, single-family homes were the preferred property type, with 78 percent of transactions involving single-family homes.  Multifamily properties comprised 14 percent, 7 percent were other property types, and bulk sales made up only 1 percent.
More info  on this C.A.R.'s 2013 Investor Survey Results.

Thanks for reading,
Francis

Silicon Valley real estate specialist
Detailed, local trends etc...
Current mortgage rates

Homeowners and their yard.

 

 

Thank you for reading,
Francis
Silicon Valley Real Estate

Smart stats
Current mortgage rates

Student-Loan Debt Keeps Buyers Out of the Market

Student-Loan Debt Keeps Buyers Out of the Market
 As we hear that Congress struggles with the "student loans" question, it is good to put it in perspective with a few facts. I thought the article below was kind of important to keep in mind.

 

The impact of student-loan debt on the nation's housing market has real estate analysts worried due to the importance of first-time buyers to the health of the market. Questions linger about whether the housing recovery will be limited as deeply indebted college graduates struggle to stabilize their finances, which means young, first-time purchasers are not entering into homeownership at traditional rates.

• According to the NATIONAL ASSOCIATION OF REALTORS®, first-time buyers comprised just 28 percent of purchases in the resale market during May. For comparison, typically these buyers make up 40 percent of purchases. The lower rate is not surprising when one considers the statistic that college graduates on average carry $21,402 in student loan debt, and troublingly, only 39 percent are in a capacity to repay. Clearly, many college graduates have no choice but to postpone the purchase of a home due to heavy debts from student loans.
• The homeownership rate for those individuals who are still paying off student loans is 36 percent lower than among their peers who have no student debt, according to research from the One Wisconsin Institute.
• Student-loan debt will remain a long-term issue because the average payoff time is 21 years, ranging from 17 years for those who attended college but did not get a degree to 23 years for those with graduate degrees.
  
• The country’s total outstanding student debt has surpassed $1.1 trillion. For recent graduates, the debt load averages just under $27,000, but an estimated 13 percent of outstanding balances range from $54,000 to $100,000.

Read the full story on the Los Angeles Times article from Kenneth R. Harney, 6/28/13.
Do you have any thoughts on the subject? Feel free to chime in!

Francis

Silicon Valley real estate
Local market: Smart graphs
Current mortgage rates

Is this a safe neighborhood?

“Is this a safe neighborhood”?  ... is a question that we as Realtors® often hear from clients. (side note: a Realtor® is a real estate agent who is a member of the National Association of Realtors®, who adheres de facto to a very strict code of ethics - not all agents are Realtors®).
What people typically do not know is that as Realtors®, we are not allowed to answer such a question: it could be construed as discrimination.  Also, the opinion about how safe an area is can be so personal and relative!

I find that the best way to answer such a concern is to advise my clients to come back at different times of the day and walk around in the neighborhood, and talk with the neighbors as much as possible.  I would add that I believe it is always a good idea to do so, no matter how pretty or ugly an area may look.  You can learn a lot about a street, a block or a group of blocks by talking with the people living directly in the area.

Finally one has to remember that conditions change all the time: I live in an area that is fairly uneventful when it comes to crime, except that in the past few weeks there have been a well publicized increase in break-ins and thefts in that general part of Mountain View.  So the best way to answer such a question is to check for yourself with the police department and get a crime report, to talk to the neighbors (who will often tell you a lot about what happens nearby - and sometimes more than you want…), and also look at some internet resources on the subject.  Here are, below, some of the sites that I have come across in the past; but I recommend to check carefully how they collect their information, and what exactly they cover and do not cover.

https://www.crimereports.com 

http://www.spotcrime.com

http://www.mylocalcrime.com 

 

There is a specific web site for sex offenders:  http://www.meganslaw.ca.gov/

 

Some good information may also be found in the local newspaper.  For instance in the Mountain View Voice under "Crime Brief" or "Police Log",  and for Palo Alto "the Pulse" (PA Weekly).  Each local paper has a similar section.  One may need to check the evolution over a period of time to better judge a neighborhood.

 

Thanks for reading, as always!,

Francis

 

Silicon Valley real estate

Local market trends
Current Mortgage rates  ... Higher!!

Price increase in the Silicon Valley

To piggy up on my last blog (is the market slowing down?) here is the evolution of sales prices of houses and CID's (common interest development = condos and townhouses).

These graphs that I just pulled show the amount of increase in average prices in a year and a half, and illustrate how indeed this is a factor in a possible slow-down of the activity.

They also show something that is unusual: prices did not really go down a lot at the end of 2012.  On previous studies I showed how prices really adjusted towards the end of the year, in 2011 and 2010.  But the market stayed strong at the end of 2012.

Finally these graphs show that indeed prices are (somewhat) flattening at this point, at least in the case of the County of Santa Clara.

 

 

If you have any area of interest, very local or at the City level, let me know and I will publish it for you.

 

Thanks for reading, as always!,

Francis

 

Silicon Valley real estate

Local market trends
Current Mortgage rates

Non-profit organization worth noting: Partners for New Generations.

Is the market slowing down?

Is the market slowing down right now?

Ask an agent who is full-time involved in the market, on the buy and on the sell side, and you will probably hear that it looks that way.   

About a year and a half ago, in the middle of January 2012, suddenly in just a matter of a week or two you could tell if you were actively involved in sales that something was changing:  properties were not available any longer to place an offer on, or offers were just going to be heard that evening with 2 or 3 offers expected, or it was too late by a day etc... So we would go to the next best one, and it was gone too, with multiple offers.

In a similar way today little signs appear here and there: a property comes back on the market a few days after being in contract, or we see "offer dates" pass with no offers brought in.  Also the inventory (finally!) increases a bit so that there is actually some choice for potential buyers.  I also hear sometimes that after a few days on the market very few people have actually looked at the disclosures online.  A month ago you would already have had by the start of the week-end most interested buyers checking out the disclosures.

So yes, it seems to me that the market is slowing down.  Sales figures in a month or two will tell us if this is correct.  I would attribute this slight slow-down to factors like:

• Buyers are jaded by so many unsuccessful bids they may have placed,
• Prices have gone up significantly for the same type of house, certainly so in the eyes of buyers, and if the asking price is too close to the last comparable sale, another 10 or 15% jump from that high becomes too intimidating,
• With higher values have also come on the market properties which may not be the same high quality as those who just commended such high prices,
• A sense, at least for some would-be buyers, that they just do not know where prices should be any longer, after the many extreme bids that all can see in the MLS (hence the need for a good Realtor...),
• .. And last but not least, the rise in mortgage interest rates that have shot up in the past 2 weeks, effectively pricing out those buyers who were at the top of their borrowing power.

 

Let’s qualify those remarks though: in the areas with good schools, for properties priced lower than the last sales, there are still multiple offers, no doubt. For areas with very little inventory, the demand which has gone unsatisfied for so long is still there, and even only one offer will often bring a much higher price than the asking price.  The market is still very much a sellers’ market.  But in areas where inventory is larger, the new prices coupled with more choices will give a break to buyers who can still qualify. 

The future will depend a lot on:

-       The inventory (going up, going down again??)

-       The interest rates

-       Seasonality to a certain degree.  There are fewer people around during summer.

If I had a guess I would say that in general, going forward, we should expect prices to reach somewhat of a plateau, a market of muted price increase.  .. well, so there is my crystal ball. Do you want to try yours out in a comment?

Thank you for reading,
Francis

Local real estate
updated loan rates   Rates are up mostly, except for the 1-yr adjustable

Not enough money for your downpayment?

Not enough money for a downpayment?

Let’s imagine that you really, really want to purchase a home, you have the income to do it, and you’re ready, willing and able (all 3 conditions that as Realtors we always check for).  But there is a little problem: you do not have enough money for the downpayment.

The typical options are: - to get some gift money (it’s got to be from a relative to be acceptable by the bank making the big loan), - or get a second, in the form of an equity line of credit (just making their come back now), - or win at the lotto...

There is however an other option, that I have personally never seen used, but that I just read about and is worth mentioning:

REX HomeBuyer, a form of shared appreciation (or depreciation).

The principle of this option is that a group of investors get together, and loan you money to help with the downpayment on our purchase.

If the property has appreciated when you sell it, they share in the profit.

If the property has depreciated when you sell it, they share in the loss.

This is a good option for people who need some help with a downpayment, and feel shy going it alone on their purchase; it is reassuring in a way to have someone else share in the risks of the market variations.  And all the while you own the house the advantage is that you have used the downpayment money to actually buy a home and live in it, - and for a lot cheaper than if you had to borrow the whole amount.  (remember that when you borrow a 90% amount on a house, you have to pay PMI –Private Mortgage insurance – and this is not cheap: about 1 to 1.5% of the amount you pay, every time you pay anything it seems).

In that option, you do not pay interest on the money that made the rest of the downpayment.  It is like having a friend co-buy with you but without the hassle to draw a complicated “separation agreement” for when you want to be on your own later. Here it is done from the start, in a clear way.

More on this interesting idea on this Los Angeles times article by Lew Sichelman.
As always with financial arrangements, run this by an advisor or an attorney if you are considering trying it...

Francis

Silicon Valley real estate

Trends: Local prices and graphs.
A noteworthy local non-profit:  Our Brothers' Home