Friday, February 19, 2010

Interest Rates Rising, Tax Refund Running Out

My mortgage professionals gave me the bad news this morning. At least it's bad for borrowers. The Federal Funds interest rate went up 0.25% today. Rates are still very low, but no one likes to pay more than they have to on loans. Mortgages immediately jumped up by about the same amount, but expect them to settle down in about a week (all other things remaining equal). Expect others types of lenders to follow suit sometime soon. Stay tuned.....

The First Time Home Buyer tax refund program is set to expire on April 30, 2010. That means that qualified first time home buyers only have a couple of months to find their home and have a deal agreed to in writing with the seller. Then they will have until June 30, 2010 to close escrow. By doing so, qualified first time home buyers lock in a an automatic $8,000 tax refund from the federal government. I sure wish this was available when I bought my first home. My first home purchase was kind of like Charlie Brown's Halloween. If you weren't a refugee from another country, all you got was a rock. Anyway, the same time lines are set to expire for repeat home buyers as well. Qualified repeat buyers will receive a $6,500 tax refund. For more questions about the market, contact me through my website or (408) 247-4029.

Friday, February 5, 2010

In Santa Clara County, sales of luxury homes down in 2009

In Santa Clara County, sales of luxury homes down in 2009
Sales of homes for $1 million or more slumped in Santa Clara County and the state last year, as home values dropped and buyers avoided confronting a difficult mortgage market. Loans above $729k have been difficult to obtain. I find that when someone is buying a $1M home that they put at least $275k down. When you look at home sales above that, buyers need to put down an increasing percentage of the property value in order to obtain a loan. Since getting above $1M oushes the down payment figures considerably, it has caused a ripple effect on home sales. The interesting thing is that one would think it would be much worse than the data suggests. This may indicate that while sales are down in many high priced areas, the values available are getting home buyers to respond. Premier locations with excellent school districts will always command premium prices.
Five South Bay ZIP codes bucked the statewide trend, posting more sales of high-end homes in 2009 than in 2008.

In the county, million-dollar-plus sales fell 22 percent, from 3,055 in 2008 to 2,378 last year. San Mateo County's sales of luxury homes dropped 21 percent, from 1,696 to 1,344, according to MDA DataQuick, which gathered the information from public records.
In the nine-county Bay Area, a total of 7,261 homes sold for $1 million or more in 2009, down 27 percent from 10,006 sales in 2008. Several Peninsula and South Bay areas made the list of the state's top 25 ZIP codes for high-priced home sales. Leading the statewide list was Hillsborough, where 261 $1 million-plus homes changed hands last year, down from 274 in 2008. In Santa Clara County, Cupertino had the most sales for $1 million or more, with 215. That was down from 263 in 2008.

In Los Altos' 94024, sales increased to 211 from 204 in 2008. In Los Altos Hills' 94022, sales rose to 174 in 2009 from 157 the previous year. In Palo Alto, three ZIP codes had an increase. In 94301, sales increased from 125 to 126; in 94303, sales went from 122 to 137; and in 94306, sales rose from 134 to 145.

The most expensive confirmed sale in Santa Clara County last year was of a 6,654-square-foot, five-bedroom house on Barton Court in Los Altos Hills for $9.95 million. San Mateo County's priciest was in Atherton for $13.85 million, a five-bedroom, 2,550-square-foot place on Polhemus Avenue.

The most expensive confirmed home sale statewide last year was for $26.5 million in the Bel Air neighborhood of Los Angeles. The house has nine bedrooms and is 22,721 square feet, DataQuick said. Statewide, 18,621 homes sold for at least $1 million in 2009, down 24 percent from 24,436 in 2008, DataQuick said. Total sales, meanwhile, of homes of all price ranges rose 17 percent from year to year. A total of 460,166 homes sold in California in 2009, up from 393,703 in 2008. One in 25 homes sold for $1 million or more last year, compared with one in 16 the previous year.

Sales of homes are excluded where no price or loan information was available. That could mean some high-priced local sales were omitted because buyers of expensive homes sometimes arrange to "hide" the transfer tax they pay from publicly filed documents, and data-gathering firms use the transfer tax to calculate the purchase price of the home.
-Gary Nobile, Realtor (408) 247-4029