Monday, August 31, 2009
New Homes at Modern Ice, Very Nice.
New Homes at Modern Ice, Very Nice. I’ve been working with several buyers in the San Jose area in the $400,000 price range who have been looking for a foreclosed home to buy. Since the market has heated up in that market segment, some have decided to take a look at a new townhome complex in San Jose called Modern Ice. It’s located off of Highway 101 and 13th Street, not too far from downtown. What a pleasant surprise. As opposed to some of the smelly fixers we’ve been looking at (I’m not being funny here) these homes were beautiful. The architect certainly made excellent use of the floor plan. Sometimes you walk into a 1,500 square foot home and wonder where they put the rest of the house and other times you think they forgot to measure one of the rooms because it feels so big. These homes are spacious and give you a feeling of privacy. They seem to be very well insulated. We even tested one of the homes by turning up a CD player to play loud in the home next door. We didn’t hear a peep in the home my clients were interested in. The home my clients ending up putting their offer in came with an upgraded tile entryway, hardwood floors, granite slab counters, stainless steel sinks, stainless steel appliances, stone bathroom sinks and stone shower walls, We were also able to negotiate for the seller to give the buyers cash credits that they were able to use at the design center to customize their home with upgrades of their choice. These homes also have attached 2 car tandem garages with extra storage space. Considering all the other choices in this price range, these homes presented a good value for the money. You may have heard that there is $10,000 tax credit incenctive to buy a new home in California (thank you Arnold). While the state aggressively set a budget of $100 million for these homes, it has already been used up by first time home buyers. However, first time home buyers can still take advantage of the $8,000 federal tax credit (see previous blog for details) until the end of November 2009, so don't wait. Modern Ice is now building their next phase and move in times are relatively short. If you’d like more info, please contact me. (408) 247-4029 www.GaryNobile.com
Saturday, August 29, 2009
Is History Repeating Itself?
Is History Repeating Itself? A friend of mine recently asked me about historical home price appreciation in California. Since I’m a member of the California Association of Realtors and National Association of Realtors, this data was readily available to me. For all the money I pay these associations every year, that’s the least they can do! Anyway, looking back to 1968, the median home price in California was a whopping $23,210. Compare that to 2008 where it was $346,410. Here’s where it starts to get interesting. When I started looking at year over year appreciation during that time, California typically mirrored national trends. But the degree of appreciation (or depreciation) was magnified in California vs. the rest of the country. For example, in 1977 home appreciation for the entire country was 12.6 % but in California it was 28.1 %. In 1992 when the country’s appreciation rate slowed to 2.7 %, California was depreciating to the tune of -1.8 %. In 2002, the country’s appreciation rate was 7.0 %, while California experienced a 20.5 % rate. In 2008, the country’s appreciation (in this case depreciation) rate was -9.8 %, while California experienced a painful -38.2 %. But as we are starting to turn the corner, one has to wonder, will history repeat itself? Will California’s appreciation rate clearly outpace the rest of the country? I believe that Californians will keep the cycle going. Bear with me here on the thought process. When things don’t go well, we’re so educated that we try to be smarter than the market and bail out quickly causing precipitous drops. But when things go well, we’re an optimistic bunch and aren’t afraid to jump on the bandwagon. For better or for worse, I expect this trend to continue.
(408) 247-4029 www.GaryNobile.com
(408) 247-4029 www.GaryNobile.com
Tuesday, August 25, 2009
Client Party - Thank You
Just wanted to say thanks to those of you who showed up at my Music in the Park client party last Thursday night. The music was great and the band (Sage) kept the fun going until dusk! This was my 3rd annual party for my clients at this venue and it was all we expected it to be. Last year, regrettably, I has was recovering from a broken ankle and couldn't host this party. It's hard to carry an ice chest full of wine on crutches! When you miss a year, one never knows if the momentum will carry over to the following year. But Thursday everyone showed up and brought their party attitudes. Sometimes when life gets hard and pressure mounts, it's good to be around other positive people to just relax and enjoy your self. Perhaps even dance a little! It was a friendly family atmosphere and it seemed that everyone had a wonderful time. Even though I had to get there at noon to reserve the "prime spot" for us, it was all worth it. Thanks for making it another special event!
www.GaryNobile.com
www.GaryNobile.com
Monday, August 17, 2009
Top Realtors Share The Secrets of Their Markets.
Top Realtors Share The Secrets of Their Markets.
I’m back after attending a real estate conference in San Diego with many of the top Realtors in the country. It was interesting to learn that many of them have experienced exactly what we have experienced here. They, along with the organization’s leader Brian Buffini, have shared with me that the real estate market bottomed out 3 months ago. In many parts of the country, Realtors are dealing with multiple offers on residential properties. They also mentioned that the media in their areas haven’t quite caught on to this trend which confuses their clients (I can attest to this). The buyers we are working with hear the media say that the market is terrible and you should be able to undercut any listed price. However, in reality buyers are often bidding over list price to get the home they want. These agents also explained that there is just not enough inventory of homes for sale in many areas of the country. When I asked about the next wave of upcoming foreclosures and why we haven’t seen them hit the market, they said that banks are slow rolling them. I’ve heard a range of opinions as to why this is this is happening. Honestly, I don’t know for sure what’s fact and what’s conjecture, but here’s what the agents I spoke to said:
· Banks don’t want to overload the market like they did last time and cause prices to drop again
· Banks want to make the Obama administration look good by showing improvement in the market
· Investor groups are buying up 50-60 homes at a time at a steep discount directly from the banks so they never hit the market
· 5/1 ARMs that were scheduled to adjust to higher payments this year have adjusted to very low interest rates that home owners can still afford
The comment about the Obama administration sounded like a bit if a stretch to me, but one never knows. After all the banks did get (gulp) billions of our money. Oh, by the way, San Diego was a lot of fun. I went to Pacific Beach for a bicycle ride, La Jolla for some body surfing, and to Coronado Island beach for some boogie boarding. Not a bad way to spend some “down time”. But now I’m to back to reality so if you know of someone interested in selling their home, please give me a call, I’d love to share this information with them. (408) 247-4029 www.GaryNobile.com
I’m back after attending a real estate conference in San Diego with many of the top Realtors in the country. It was interesting to learn that many of them have experienced exactly what we have experienced here. They, along with the organization’s leader Brian Buffini, have shared with me that the real estate market bottomed out 3 months ago. In many parts of the country, Realtors are dealing with multiple offers on residential properties. They also mentioned that the media in their areas haven’t quite caught on to this trend which confuses their clients (I can attest to this). The buyers we are working with hear the media say that the market is terrible and you should be able to undercut any listed price. However, in reality buyers are often bidding over list price to get the home they want. These agents also explained that there is just not enough inventory of homes for sale in many areas of the country. When I asked about the next wave of upcoming foreclosures and why we haven’t seen them hit the market, they said that banks are slow rolling them. I’ve heard a range of opinions as to why this is this is happening. Honestly, I don’t know for sure what’s fact and what’s conjecture, but here’s what the agents I spoke to said:
· Banks don’t want to overload the market like they did last time and cause prices to drop again
· Banks want to make the Obama administration look good by showing improvement in the market
· Investor groups are buying up 50-60 homes at a time at a steep discount directly from the banks so they never hit the market
· 5/1 ARMs that were scheduled to adjust to higher payments this year have adjusted to very low interest rates that home owners can still afford
The comment about the Obama administration sounded like a bit if a stretch to me, but one never knows. After all the banks did get (gulp) billions of our money. Oh, by the way, San Diego was a lot of fun. I went to Pacific Beach for a bicycle ride, La Jolla for some body surfing, and to Coronado Island beach for some boogie boarding. Not a bad way to spend some “down time”. But now I’m to back to reality so if you know of someone interested in selling their home, please give me a call, I’d love to share this information with them. (408) 247-4029 www.GaryNobile.com
Monday, August 3, 2009
Real Estate Shift Leaves Buyers In First Gear
Real Estate Shift Leaves Buyers In First Gear.
The Silicon Valley real estate market has kicked it up a notch. As I’ve been reporting for several months now, inventory of homes for sale have been shrinking while sales have been increasing. It’s been challenging for buyers to get the homes they want because there are multiple offers on many homes. For perspective, I thought it would be good to get a quantitative historical perspective for single family homes (see chart below). In June of ’07 is when banks first started to trim automatic loan approvals. This was the beginning of the end for “Liar’s Loans”. By this time, inventory was inflating because prices were overinflated. I would like to interject a little known fact here: Total sales for all of 2007 were 9,022 which was the lowest level in Silicon Valley since 1993.
By June ’08 foreclosures had ensued and were starting to hit the market in a flood, if you will, causing inventory to grow and prices to drop. It’s interesting to note that sales stayed somewhat steady during June ‘08 compared to June ’07, remaining at historical lows.
Along comes June 2009. Inventory is down 33% from 2008 and below the June 2007 levels while sales increased by 28%. This has caught many buyers off guard. We all know that when inventory (supply) decreases and demand (sales) increases, prices rise. Just think if there was only one milkshake left on the planet and you wanted it. If you think about how much you’d be willing to pay for it, you understand supply and demand along with the impact on prices. Along comes July 2009 and things really start getting interesting. Supply drops another 32%. But where did all the homes go? One of the missteps about looking at real estate data is only looking at sales. It’s a good indicator of what has happened, but not such a good indicator as to what is happening right now. For that, I look at pending sales. These are sales where a buyer and seller have agreed in writing to the terms of the sale, but it hasn’t yet closed. The last time I researched it, about 95% of pending sales actually close. The others go back on the market. This figure changes from time to time depending on the intensity of the market. I find that when prices are rising, more buyers close the sale because they have made money while waiting for the home to close and, thus, they’re less reluctant to walk away from a deal and start all over again at a higher price. So let’s look at the magic number today. Pending sales are up 149% from June 2009! This has caught many buyers wondering what happened and why they can’t they get the home they want. It can be frustrating, but hang in there. If you know what you’re dealing with and set appropriate expectations, you can understand the market and keep your sanity. http://www.garynobile.com/ (408) 247-4029
For Sale (Supply)
June '07 - 4,508 homes
June '08 - 6,089 homes
June '09 - 4,154 homes
July '09 - 2,790 homes
Sold (Demand)
June '07 - 982 homes
June '08 - 931 homes
June '09 - 1,191 homes
July '09 - 2,964 homes
The Silicon Valley real estate market has kicked it up a notch. As I’ve been reporting for several months now, inventory of homes for sale have been shrinking while sales have been increasing. It’s been challenging for buyers to get the homes they want because there are multiple offers on many homes. For perspective, I thought it would be good to get a quantitative historical perspective for single family homes (see chart below). In June of ’07 is when banks first started to trim automatic loan approvals. This was the beginning of the end for “Liar’s Loans”. By this time, inventory was inflating because prices were overinflated. I would like to interject a little known fact here: Total sales for all of 2007 were 9,022 which was the lowest level in Silicon Valley since 1993.
By June ’08 foreclosures had ensued and were starting to hit the market in a flood, if you will, causing inventory to grow and prices to drop. It’s interesting to note that sales stayed somewhat steady during June ‘08 compared to June ’07, remaining at historical lows.
Along comes June 2009. Inventory is down 33% from 2008 and below the June 2007 levels while sales increased by 28%. This has caught many buyers off guard. We all know that when inventory (supply) decreases and demand (sales) increases, prices rise. Just think if there was only one milkshake left on the planet and you wanted it. If you think about how much you’d be willing to pay for it, you understand supply and demand along with the impact on prices. Along comes July 2009 and things really start getting interesting. Supply drops another 32%. But where did all the homes go? One of the missteps about looking at real estate data is only looking at sales. It’s a good indicator of what has happened, but not such a good indicator as to what is happening right now. For that, I look at pending sales. These are sales where a buyer and seller have agreed in writing to the terms of the sale, but it hasn’t yet closed. The last time I researched it, about 95% of pending sales actually close. The others go back on the market. This figure changes from time to time depending on the intensity of the market. I find that when prices are rising, more buyers close the sale because they have made money while waiting for the home to close and, thus, they’re less reluctant to walk away from a deal and start all over again at a higher price. So let’s look at the magic number today. Pending sales are up 149% from June 2009! This has caught many buyers wondering what happened and why they can’t they get the home they want. It can be frustrating, but hang in there. If you know what you’re dealing with and set appropriate expectations, you can understand the market and keep your sanity. http://www.garynobile.com/ (408) 247-4029
For Sale (Supply)
June '07 - 4,508 homes
June '08 - 6,089 homes
June '09 - 4,154 homes
July '09 - 2,790 homes
Sold (Demand)
June '07 - 982 homes
June '08 - 931 homes
June '09 - 1,191 homes
July '09 - 2,964 homes
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