Spring is In the Air for Silicon Valley and the Numbers Are Looking Good

Spring is looking good for residents of Santa Clara County, Los Altos and Los Altos Hills. With a promising and healthy trend of balanced numbers on the scale of homes for sale vs. homes fresh off the market, there is much to look forward to as we roll into the warmer months of Spring and Summer. Here are the latest stats that show some very good activity on the market.

Santa Clara County

In the last 30 days, we’ve had 2200 homes come on the market and 1815 roll off, either having gone under contract or in pending status awaiting finalization. These numbers show a solid average of about one to one in terms of houses sold versus houses entering the market.

Single-family homes, condominiums and townhomes are showing some strong numbers at the present time, with 4701 properties on the market – a very normal number for this time of year. The number of closings we’ve seen are 949 – which is a fairly good number of closing transactions for this time of year, promising quite a healthy outlook in the near future.

Los Altos

Even stronger than Santa Clara County, Los Altos had a total of 49 properties actively listed for sale, 33 pending sales and 13 properties that closed out last month. While the number of closings is lower than the average figure, pending sales and listings are yielding a very strong 1.5 to 1 average ratio of homes for sale vs. homes that are selling.

The bottom line in this market is that things are moving right along, at or above par, and the trends are pointing up.

Lost Altos Hills

Out of 41 active listings with only 12 pending sales, the ratio of homes listed versus homes selling or sold is a weaker one at almost four to one. The low number of six closings from last month indicates a slower than average trend but then this makes sense given the higher average price of properties in Los Altos Hills.

No matter how you slice it, the overall Spring trend in Silicon Valley looks good. Healthy ratios of homes listed versus homes pending sale make this market a promising one, especially for sellers. By leveraging the low inventory as opposed to high numbers of buyers in the area, homeowners can greatly benefit from the current market trends. The important thing to remember is that regardless of many people’s trepidation about the current market, the outlook is looking up and is looking good!

Market Timing: When is the Best Time to List Your House?

Should you put your market on the house before the spring rush? Or, is waiting until you have more buyers and interest the best time to list your home for sale? Questions like these look for the best strategies when it comes to real estate market timing. When ultimately is the best time to list your home and get the largest possible profit?

Does History Predict the Future?

Looking back on the real estate trends last year can be beneficial for future forecasting. Based on examining data from the previous year, we get a general idea of whether or not the market will quickly pick up in the coming months.

Currently in Santa Clara county, we have a 1:1 ratio of homes for sale and homes that are selling. This is a great number if you are selling your home. We were at a similar rate at this time last year.  By April of 2010, the inventory of homes on the market actually increased by 50%. However, the sales of homes only increased by 25%.

What does this trend from last year mean? When the ratio of homes for sale and homes sold each moth was equal, this was great for a seller! But once spring rolls around and inventory increased, there was greater competition among sellers. Home buyers were at the advantage and buyers were at a slight disadvantage, compared to just a couple of months before.

So Is Today the Best Time to Sell?

The new year just “sprung” and you may be wondering what all this data has to do with your home. If you plan to sell in the next few months, and if last year is any predictor, today is the best time to put your house on the market.

Why? There are fewer homes on the market right now and this gives your home a distinct advantage. It also gives you a much greater probability of selling your home and doing so quickly. Provided interest rates don’t take a nose dive or dramatically skyrocket, right now is a great time to put your home on the market. In fact, today is better than putting it on the market during the upcoming spring rush.

“When is the best time to sell?” is the million dollar question in the real estate market today. If you study the trends of last year and see what our current trends are, they show that today is the best time to sell your home. You should sell it quicker and yield a higher profit in the end. This is great news for home sellers today!

Up and Coming Trends for 2011 – Business As Usual for Most of Us!

Everyone wants to know what to do next. Should they sell? Is it the right time to finally buy? Hold off on all things till the real estate sun shines brighter? One thing that will help you decide whether or not to buy that dream house with the kidney-shaped, mosaic pool is to know what to expect in the coming New Year. We’ve put together some projected trends for your benefit, based on how things progressed from last year to now.

2009 vs 2010

Looking at property sales figures and comparing them from 2009 to 2010, there is an obvious increase. As much as ten percent or more higher this year, what’s promising is that this is a very normal tendency in a stable market. This year in most typical markets there was an average of 11,000 properties sold as opposed to last year’s 10,000, which means that the relatively normal movement indicates a positive, upward curve.

Higher Median Price Range

Our median prices have gone up about 25% up from what it was in 2009. Contrary to a common misconception, an increase in median price range does not mean that the prices have gone up. In fact, what it really means is that there is a significantly more activity in the higher priced properties; all very promising signs for us.

Fewer Days on Market

The average number of days on market (DOM) for many properties has significantly reduced – as much 40%! Another way of looking at this is that there is an average 40% decrease in time it takes for the usual property to sell. In other words, things are looking up!

Lower Interest Rates Stay Low

We all know they’ve been low for some time, but no one really knows how long they will stay that way. Experts are predicting that they will continue to remain low for at least the next six months, to as long as 24 months, which is great if you’re in the market for a new home. With this promising to carry into 2010, this is also a very good time to get that refinancing done, if you haven’t done so already, and lock in those great rates!

A Few Not-So-Fantastic Trends

Of course, it’s not always a bed of roses and this year’s expected hurdles are mainly centered on a slow (although definitively steady) pace of improvement, slow job growth, and an inclination toward short sales and foreclosures in the more expensive properties ranging from $1.5 million and up.

The bottom line of what to expect for 2011 is a scene of varying markets; each unique to the next, which is why you will benefit from an individual consultation with your real estate agent – to examine the trends in YOUR area.

Generally, based on 2009 versus 2010, we will see “business as usual” but with the advantage of a relatively flat range of prices and the disadvantage of slower than usual job growth. Holding on to the hope that with small incremental growth and little bits of improvement, we expect another year or two to go by as they have been and then things should eventually start smoothing over and working out.

As the New Year Approaches, We Take a Look Ahead at Expected Trends in Real Estate

There has been a lot of skepticism in the media and market in general about real estate and whether the current recession has hit us so hard that we might take a whole lot longer to recover than we thought. But the truth is that even though there has been a general hesitance for a lot of folks, the actual long term trend has been an upward one. With an increase of sales for the current year, many real estate agents are reporting the same expectation for 2011. A few other trends are also expected in the coming year that will contribute to a continued, albeit gradual, upward trend.

Low-Interest Rate Lock-In

Most people are misinformed about the real estate industry – and in their lack of knowledge will be too quick to just say “the real estate market is at its worst low”. However, when you look at the actual situation, you’ll quickly realize that contrary to that sometimes popular belief, the trends in residential and commercial property sales have been slowly and steadily improving. The great advantage we have going at the time is the fact that the government wants us to get into our own homes, stay in them and maybe even upgrade if it’s the right time for the right family. This means, among other concessions, a continued solid low-interest rate lock-in that will serve you for years, even well after the recession has hit the road.

Smaller, More Serious Buyer Pool

Buyer pools are at a near all-time low, with the situation in the American workplace as it is. Layoffs, downsizing and cost-cutting has changed the mind set of current homeowners once thinking of selling their existing home and upgrading to the next level. So now, when people are putting their homes on the market, especially properties worth $2 million and under, those homes are being picked up like hotcakes in a hot second by the relatively few buyers out there. Making it a somewhat ideal situation for sellers of this group, the current trend is about a 30% increase in sales from the previous year and moving on to the next year the same is expected to continue. While analysts don’t believe it will increase too much more, projected sales definitely mimic this trend.

Predictable Prices Here to Stay

With the economy on a see-saw and some analysts saying we’re in a double-dip recession while other still saying we’re not, one thing is for certain – the prices that we are seeing are here to stay at least for the next 12 to 24 months. That’s not to say that they won’t fluctuate a little, but the general trends have been of stability in prices and we don’t anticipate any major change there for at least a little while. What this means to you is that you can plan reasonably and if buying or selling a home is in your cards, you have the advantage of knowing what to expect. No one in this sort of economy can stand to go into the dark on real estate deals these days and every bit of predictability is paramount.

Things are changing and slowly, but surely, they’re changing for the better! We are shouting out a resounding ‘Hang in there!’ to our clients. Our confidence in the market isn’t going anywhere. Lock in the lowest interest rates we’ve seen in a long time. Seize the opportunity to buy as one of the few that can buy, or sell to those who are holding a pen in hand waiting to sign that check. Know that the future looks up!

By availing the several opportunities that do lie in the current situation, you can come out a winner and own the property of your dreams! Better yet, you can own the property that will allow you and your family to live comfortably, safely and with stability – for a long time to come!

I Want to Price My House Right for the Market. Should I Rely on Zillow.com?

Should you rely on Zillow.com to price your home for the market? To be upfront about it, the answer to your question is, “Yes” and No.” Here’s why I say “Yes:”

Zillow.com is a wonderful and useful site. To paraphrase the information on their site, it’s one of the “leading online real estate marketplace dedicated to helping home buyers and sellers find and share vital information about homes, real estate, and mortgages…Our goal is to help people make intelligent decisions about their homes - whether it's buying a home, selling, renting, leasing, remodeling or financing - it's all about empowering people with data and information.”

Now, here’s why I say, “No.” The Zillow site doesn’t really know the details of what’s happening in your specific neighborhood because it operates on a mathematical algorithm, not on the real information that you’ll get from a realtor or an appraiser.

So, frankly, on the Zillow web site, your property’s selling price may be too high – or too low! And the wrong price can prevent you from selling your home quickly in a tough market.

From my perspective, you should use Zillow as a starting point to get a general idea of your home’s potential selling price. But, don’t rely on it alone! Definitely talk to someone who knows your town, your neighborhood, and your street. You’ll be a much happier seller if you do!

If you’d like to talk more about Zillow and other online sites, please give me a call today! I’d love to help you out in any way I can.

What is a Real Estate Short Sale? Here are My Frequently Asked Questions...

Who Qualifies for a Short Sale?

In order to qualify for a short sale, the seller must prove to the bank one or more of the following conditions:

- Loss of job, and difficulty in finding new suitable job
- Job Relocation, when equity is deficient
- High medical expenses due to disability, injury or illness in family
- Divorce
- Unable to afford the loan from the beginning
- House needs unexpected major repairs
- Overextended Credit
- Changing Economy
- Adjustment in mortgage payment due to interest rate or an unforeseen increase in living expenses
- Incidentally, these are also the most common reasons for a foreclosure.

Why Would a Lender Accept a Short Sale?

Why would a lender accept less than they are owed? Simply stated, the alternative is a foreclosure. Just as with the borrower, there are significant consequences to the lender if they foreclose.

- The legal costs of eviction and repossession,
- The loss of loan payments during the foreclosure process until it is re-sold
- A foreclosed house will need work before it can be resold
- After the foreclosure, the bank has two options: Sell it at the courthouse steps, or try to resell in the market.

If they resell in the market, they are penalized by the government by freezing 3-10 times the loan amount so that the lender cannot lend those funds to another borrower.

Will my lender consider a Short Sale if the mortgage is current?

Sometimes, some lenders will accept a Short Sale file for approval on loans that are not delinquent. Other lenders will not accept the file until the loan is delinquent.

What if a property needs work, can I still apply for a Short Sale?

Yes. In fact, lenders are more motivated to do a Short Sale on a property that needs work than on a property that doesn’t. The lender knows the risk of loss goes up when they foreclose on a property that needs lots of work. 

What is a Short Sale Packet and What Needs to be in it?

A short sale package it used to determine whether a homeowner can afford the property. Our team will work with you and your realtor to gather the information needed to meet the bank guidelines and streamline the process as efficiently as possible. Below are some of the standard items needed to complete a short sale proposal:

- The Listing Agreement
- Authorization to Release form (to allow agent to discuss with bank)
- Hardship Letter (see “How to Qualify” above)
- Financial Statement
- Seller Net Sheet (a copy of the HUD form with offer)
- Contract (when offer is accepted)
- Buyer’s Proof of Funds (with offer)

I have more than one mortgage on my property . Is that a problem?

No. Subordinate lenders are more flexible than 1st mortgage holders.

What if I have 2 mortgages held by different Lenders?

When you have 2 loans with the same lender, it is more beneficial to them, as there is no need to negotiate
with another lender. When the two loans are with different lenders, the process is a little longer, but the second lender is the one who has more to lose if they don’t reach a settlement. This is because if the property goes to foreclosure, the first loan is the first one to be paid and the second usually nets nothing.

Do I have to be past due on my mortgage to be able to get the benefit of a short sale?

No, but it is likely that the lenders’ guidelines will prevent them from formalizing a short sale if the loan is not past due. This means, for them, that the borrower has the means and can continue to pay on the loan each month. Please understand, however, I AM NOT RECOMMENDING THAT ANYONE STOP PAYING THEIR LOANS. In the current market conditions, it is possible that a bank would accept a short sale, even when the borrower is current.

What is a hardship letter?

This is a letter that explains the borrower’s current financial circumstances. Which circumstances have changed from when the house was purchased, and why the mortgage payments can no longer be made. These circumstances are what led to a borrower’s inability to make payments and to pay off the loan in full. This letter must be written by the borrower, and be sincere in demonstrating (with documentation) that it is the truth.

How long does it take to complete a short sale?

The time frame for the lender to receive and evaluate the short sale proposal is about 8 weeks from the time the offer and Short Sale Package are received. Buyers need to realize that this is a lengthy process. This is why it is very important to work with a Short Sale Specialist who knows how to manage the transaction. The other agent and the buyer may get cold feet at the end, and the transaction may fall through.

Why does the bank accept less than they are due?

They lose less on a short sale. On average, lenders lose tens of thousands of dollars less on a short sale versus a full foreclosure. It is simply in their best interest.

Can staging your home increase the value when selling?

Home staging is one of those subjects that people often feel a little bit intimidated by. There are a number of factors that are involved in good home staging but it does not need to be a complicated issue.

We caught up with Karen of Staging Pros in Santa Clara county. She is an expert in home staging and has a wealth of experience that can turn your home selling experience into a quick and lucrative home sale experience.

Whether you plan to do your own home staging or hire a professional to do it for you, here are a few commonly asked questions about this process with surprisingly easy answers:

What Exactly is “Home Staging?”

The process of staging is taking what you have (or, in some cases, bringing in new items) and presenting them in a way that shows off what you have as well as you possibly can.

In a way, home staging is about illusions. It's beyond decorating and cleaning. It's about perfecting the art of creating moods. Staging makes your house look bigger, brighter, cleaner, warmer, more loving and, most of all, it makes home buyers want to buy it.

Does My Entire Life Have to Be Disrupted for Home Staging?

No! Many people think home staging requires a lot of new furniture and artwork to be brought in and put in your home. In fact, most people already have what they need for a great home staging already in their home. They just need a little expertise to help guide them on how to position their assets.

It is also possible to easily live in the home while the staging process is in full swing. In fact, this is frequently part of the home staging challenge: making your home both staged appropriately and livable. The great news is that it can be done. Particularly when you hire a professional to help you with this process, you will find that the two really can coincide easily.

Is It a Good Investment to Invest Money in Staging a Home?

Absolutely! Many times staging is done after a home is generating little interest on the housing market. Some strategic staging is performed and it sells quickly thereafter. The fact of the matter is if you want to sell your home…and sell it quickly…staging makes all the difference.

Homes that are staged sell faster in a slow market and sell for more money in a hot market. There is simply no reason not to stage. The investment comes back to you in a sold house.

How Can I Find Someone to Stage My Home?

Karen Dayton of Staging Pros is one of Santa Clara County's leading home staging companies. She can be reached at 408-595-7879.

Home staging is often overlooked in the home selling process. In fact, it can be one of the most important factors if you want to sell quickly and for top dollar. If you are in the market for selling your home, I suggest speaking with a professional home stager and see what they suggest. In the end, it may be the best move you could make.