(8/16/2010) 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.
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.
Follow the link to continue reading the related articles
