Answers to Some of Your Most Frequently Asked Real Estate Questions

In this week’s edition of Weekly Market Watch we felt it appropriate to provide you with a Q&A with answers to many of the most commonly asked questions regarding today’s market.  I hope you enjoy this edition of Weekly Market Watch:

1.  What will the industry do to adjust to the new market demand or lack thereof?

• I think we’ve been adjusting in recent years as the market has struggled with the economic downturn.
• But at Coldwell Banker we’ve grappled with the challenging market by working to grow our business.
• We’ve launched a number of new initiatives, such as our Market Trends program, a CaliforniaMoves.com redesign, efforts in social media, enhancements to myREcafe.com and more
• We’ve instituted far-reaching new customer outreach campaigns both at the corporate level and through our agents.
• And we’ve launched more focused marketing campaigns, especially e-marketing, and deployed more advanced technology for our agents.
• Additionally, we’ve looked at this as an opportunity to recruit outstanding agents to join our team – people who have a strong track record of success and have been through these cycles.
• Although we’ve certainly had our challenges like everyone else, I’ve been encouraged by how we’ve weathered the storm and actually have grown business and market share in some regions.
• I guess I’m also optimistic that we’ve seen the worst of the downturn. Our market figures and reports from the field tell us things have improved tremendously over the past year.

2. How much more contraction can we expect?

• No one has a crystal ball, but the data I’ve looked at from our offices and the market in general tells me that we’ve seen the worst of the downturn and are heading back.
• I don’t mean to say that we’re back to normal – far from it. But we’ve seen solid improvement in many of our markets.
• Last year, much of the gains came from bargain hunters buying up foreclosures and other distressed properties…
• But since last fall, and especially this year, we’ve seen strong improvement in the mid-range and even some of the upper levels of the market.
• Still, I also realize that as much as we’d all like it, I don’t think we’re going to have a V-shaped recovery in the economy or the housing market.
• This rebound is looking like it will come in fits and starts – more of a stair step improvement than a straight line.
• We’ve certainly bounced sharply off last spring’s recessionary lows. But growth has slowed in the aftermath of the federal tax credit expiration.
• We also face economic headwinds in the months ahead – high unemployment, very slow GDP growth and consumer spending, and concerns about the debt markets.
• Nonetheless, I’m optimistic by improvement we’ve seen in sales in the Sacramento/Tahoe area.
• Couple that with an improving stock market, affordable home values and record-low mortgage rates and I think you have a solid foundation for a steady housing recovery.

3. What continues to insulate or separate the Northern California area from other markets?

• The Sac/Tahoe area’s housing market has long been one of the most sought-after– not only in California, but across the country.
• The demand for housing here has historically been far greater than most other regions for a number of reasons:
  • First and foremost, the astounding entrepreneurial success that continues to spawn high-paying jobs and affluent employees looking for homes.
  • Also, there’s a tremendous quality of life here that few regions in the world can match – outstanding schools, a wealth of recreational activities, proximity to Lake Tahoe and to the Bay Area, five-star restaurants…and so much more.
  • Buyers have long been willing to pay a premium for homes here, and sellers have historically received strong returns on their housing investments.
• So while the Sac/Tahoe area has not been immune to the economic and housing downturn of the past few years, this region may be bouncing back stronger than other parts of the country.
• I would say that long-term investors who have waded into the market of late will be rewarded for their efforts with solid returns over the years.

4. What influence does the nation’s economic crisis have on real estate?

• It’s an interesting question.  It will be hard for the market to come all the way back to normal until we get our house in order, both in terms of the economy and what’s happening in the government.
• With a large budget deficit, the government must find a way to begin closing the gap. The only two ways of doing that are by cutting spending and increasing revenue – most likely both.
• Increased revenue will come as the overall economy recovers, but in the meantime it could mean increased taxation – perhaps sales and income tax.
• On the reduction side of the equation, closing the gap will likely mean job cuts and more unpaid furloughs of state employees.
• Both scenarios mean less disposable income for homeowners and potential homeowners to spend on housing.

While all of this will certainly have an impact on the housing recovery, I honestly believe it’s more than offset by the positives we’re seeing:  buyers taking advantage of record-low mortgage rates and attractive prices, as well as a slow but steady improvement in stock portfolios, the jobs picture and the overall economy.

Overall, the long-term future of real estate is bright.

Silicon Valley Million-Dollar Home Sales Continue to Climb, Coldwell Banker Residential Brokerage Reports

Sales and prices of high-end homes rise from last month and year ago levels

 

Silicon Valley’s high-end housing market continued to rebound from its recessionary lows with both sales and the median sale price climbing once again in April, according to Coldwell Banker Residential Brokerage, the Bay Area’s leading provider of luxury real estate services.

A total of 229 homes in Santa Clara County sold for more than $1 million in April, more than double last April’s level of 104 home sales when the nation’s economy was just beginning to pull out of the long downturn. Sales last month were also up 32 percent from the previous month’s total of 173 homes.

At the same time, the median sale price of million-dollar homes in Silicon Valley last month reached $1,395,000, up 7.3 percent over the same period a year ago and level with March’s median sale price.

Also encouraging, high-end homes continue to sell at a faster pace. The average Silicon Valley million-dollar sale in April occurred after just 39 days on the market, down from 53 days for March sales and 51 days for April 2009 sales.  And sellers received nearly 99 percent of their asking price, up from 91 percent a year ago.

The figures were derived from Multiple Listing Service data of all homes sold in Santa Clara County for more than $1 million last month.

“Sales have been strong in the entry level market in Santa Clara County and throughout the Bay Area for some time, and now it appears that the mid and upper end of the market is rebounding as well,” said Rick Turley, president of Coldwell Banker Residential Brokerage in the Bay Area.

The mix of homes selling in the county has been steadily changing with fewer foreclosures and distressed property sales and more mid- and high-end home sales, helping revive the luxury market. Single-family homes in the low $1 million range are moving quickly with multiple offers in many cases.

Turley said the April 30 deadline for first-time homebuyer and repeat-buyer federal tax credits may have helped sales last month, even in the million-dollar market. Although the credits primarily benefited entry-level buyers, the chain effect likely spurred more move-up buyers looking to take advantage of lower prices in the million dollar-plus market.

Despite the improvement, Turley warned that there are still hurdles ahead for the local housing market.

“The economic recovery is still quite fragile, unemployment remains high and we’re still battling macro economic issues here in the U.S. and worldwide with the debt crisis in Europe,” he said. “This all affects consumer confidence here at home, which is critical for the financial markets and housing market.”

Nonetheless, Turley said he’s encouraged by the steady improvement in all segments of Silicon Valley’s real estate market.

Some key findings from this month’s Coldwell Banker Residential Brokerage luxury report:

• The most expensive sale in Silicon Valley in April was a four-bedroom, nine-bath 5,050-square-foot foot home in Los Altos that sold for $4 million;
• San Jose boasted the most million-dollar sales in April with 39, followed by Saratoga with 38, Los Altos with 37, Cupertino with 31 and Palo Alto with 30;
• It took an average of 39 days to sell a million-dollar home in the county, down from 53 days the previous month and 51 days a year ago.

Seeking your next luxury home search at www.sierraluxuryhomes.com

Realtor Appreciation Night Julie Smith & Associates 5/20/2010 @ 5:30PM

Realtor Appreciaton Night May 20th @ 5:30 – 8:30 PM Join us for a fun evening of Networking & Social Media Seminar. Food by PF Chang’s, Wine, Door Prizes.  Hosted at Julie Smith & Associates 7095 Douglas Blvd, Granite Bay. Your Hosts Lisa Smith, Designer Julie Smith & Associates, Luxury Home Magazine, Wells Fargo and Ferguson. Discounted Head Shots by Lynne Greene Photography. RSVP lisa@juliesmithandassociates.com

North Lake Tahoe and Truckee Luxury Home Sales Climb in First Quarter, Coldwell Banker Residential Brokerage Reports

 

Sales up 26% over last year as median price falls 16% from first quarter 2009

North Lake Tahoe and Truckee luxury home sales rose 26 percent in the first quarter of the year compared with the same period a year ago as a decline in prices attracted more buyers to the market, according to Coldwell Banker Residential Brokerage, the leading provider of real estate services in Northern California.

A total of 24 million-dollar home sales were recorded in the Tahoe-Truckee region during the first quarter from January through March, up from 19 during the same period a year ago. The median sale price during the period was $1,297,500, down 16 percent from the first quarter of 2009.

While sales were up year over year, they did decline from the fourth quarter of last year when 35 luxury properties changed hands. However, sales historically have been higher in the fourth quarter as buyers and sellers rush to close transactions before year-end.

One encouraging sign was that sellers received an average of 92 percent of their asking price during the first quarter of 2010, up from 83 percent in the fourth quarter and just 77 percent a year ago.

The figures were derived from Multiple Listing Service data of all homes sold in the region for more than $1 million.

Coldwell Banker Residential Brokerage’s latest report indicates a high-end housing market that is starting to attract more buyers with prices that have declined in the aftermath of the nation’s severe recession.

“The drop in prices clearly is helping fuel a jump in luxury sales in the Tahoe area,” said Michael Lombardi, manager of Coldwell Banker Residential Brokerage in the North Lake Tahoe-Truckee region. “A lot of people who had been priced out of the market a few years ago are now finding that high-end homes are now within their reach.”

Lombardi added that, in general, consumer confidence appears to be on the rise in all segments of the local housing market, especially in comparison to a year ago when the nation’s economy was approaching the depths of the recession and the credit markets were seizing up.

“Buyers are becoming more confident about purchasing a home now as the economy continues to show positive signs of a recovery and the stock market moves higher,” he said.

“Buyers also understand that there are good values out there – especially in the high-end market, where prices have been discounted more than other segments.”

While Lombardi said the local housing market has been moving in the right direction over the past year, the rebound isn’t going to happen overnight.

“It’s important to remember that any road to recovery has its share of potholes and obstacles,” he said. “There are still challenges ahead for the housing market, including high unemployment and foreclosures.  Still, I’m encouraged by the general improvement over the past year.”

Some findings from the first quarter North Lake Tahoe-Truckee luxury report:

• The most expensive sale last quarter was a four-bedroom, five-bath 3,427-square-foot home in Truckee that sold for $3.65 million;
• Truckee boasted the most multi-million-dollar sales during the past quarter with 11, followed by Tahoe City with four;
• Homes sold for 92 percent of their average list price, compared to 83 percent the previous quarter and 77 percent a year ago;
• Homes were on the market an average of 322 days before selling compared to 235 a year ago and 161 in the fourth quarter.

 

Find your next Luxury Property at www.sierraluxuryhomes.com

Weekly Wrap Up 4/16/2010 for Million Dollar Listings in Granite Bay, CA

Whats doing in Granite Bay, CA with Million Dollar Listings? Total of 53 Active Listings ranging from $1,050,000 to 4,799,000 5 new properties that have come on the market recently. On the Short Sale front we have 9 properties with 6 of those that have offers on them. Evidence people are shopping for deals! One of those short sales came on the market and went pending 4 days later. Pending properties stand at 10 with 6 of those going pending this month which is a positive sign we are seeing movement in the higher end. Solds stand at 12 with 5 of those closing so far this year. Interest rates and loan products for the higher end are helping to move us in the right direction. Looking to make your next luxury move check out www.sierraluxuryhomes.com That’s a wrap for this week!

Making Heads or Tails of the Market

 

The housing market and overall economy is an intricate web of information and all of the incoming news that we’re collecting on a daily basis can be confusing.  This week I thought I’d try to help us weed through some of the content and get a better understanding of what we’re seeing.  Here are some specifics:

• Unemployment numbers were flat nationally, yet nonfarm payroll employment increased by 162,000 in March.
• At last count, well over 1.4 million buyers had taken advantage of the first time home buyer tax credit.
• Consumer confidence is on the rise with the latest numbers showing that the Conference Board Consumer Confidence Index now stands at 52.5, up from 46.4 in February.
• We’re seeing a lot more buyer activity as we approach the expiration of the first time home buyer and existing home owner tax credit.
• Sac/Tahoe home prices are on the rise in many markets.
• Home foreclosures are accelerating—and many more people are losing their homes.  Foreclosure filings in March totaled 367,056, jumping nearly 19% from February and up almost 8% from March 2009, according to RealtyTrac.
• According to the National Association of REALTORS®, the U.S. is currently in position to sell 4.68 million homes this year.  That would put 2009 within the top 5% of home sold in U.S. history.  Although many people are purchasing distressed properties in foreclosure or short sales, there are also a large number of purchases made on non-distressed property sales.  The market is indicating that we may have reached the bottom.

I know what you’re thinking.  It’s hard to make heads or tails of the housing market.  You’re right.  Consumer confidence is up, unemployment is flat but new jobs are on the rise, home prices are increasing yet foreclosures are accelerating.  So what do we make of it?

My advice?  Stop trying to make anything of the influx of reports that are coming out (almost) on a daily basis.  It’s too difficult and confusing.  There are three essential principles we can count on for the future:

1. Inflation leads to higher interest rates
2. Houses are selling in high quantities
3. If you’re a seller, it may be time to cut your price and be decisive.  If you’re a buyer, it may be time to purchase or miss out on the opportunity.

For buyers, don’t make the mistake of waiting for everyone else to make a move before you feel comfortable making a purchase.  Many people have made a purchasing decision already, and we never know what the bottom of the market is until it has passed.  Here’s one thing you can take to the bank, however:  higher interest rates are the equivalent of a price increase and interest rates are slowly inching up.  When inflation hits, it will be too late, so try to take advantage of this window of opportunity while it’s still here

Sellers, sell only if you’re serious about selling.  If you are serious about selling your property, adjust your price to where the market is moving, consider taking your lumps and move on or you may be waiting a long time.  Also, if you want to take advantage of the buyer pool that is available now through the end of the month with the home buyer tax credit, try to get your home on the market now.  Remember, the credit expires at the end of this month.

 If I can help with your Buying or Selling experience it would be my pleasure! www.sierraluxuryhomes.com

Governor Signs New Homebuyer Tax Credit In California

News from the California Association of Realtors C.A.R. applauds Gov. Schwarzenegger’s signing Homebuyer Tax Credit legislation into law.

LOS ANGELES (March 25) – The CALIFORNIA ASSOCIATION OF REALTORS® (C.A.R.) today praised California Governor Arnold Schwarzenegger for his leadership in signing the Homebuyer Tax Credit legislation into law.

“We are pleased that Governor Schwarzenegger recognized the positive impact the tax credit will have for families hoping to buy their first home,” said C.A.R. President Steve Goddard. “Successful passage of this legislation was the result of our efforts in Sacramento over the last several weeks as REALTORS® and our team in the capital worked for the bill’s passage before it landed on the governor’s desk earlier this week.”

California’s previous home buyer tax credit program was so successful that it ran out of tax credits by the end of June 2009, eight months before it was set to expire and just as housing markets appeared to be turning a corner. Unlike last year’s legislation, the Homebuyer Tax Credit signed into law today adds a tax credit for the purchase of an existing home by a first-time home buyer.

“The positive impact of the home buyer tax credit at the federal level is clear,” Goddard said. “Nearly 40 percent of first-time home buyers said they would not have purchased a home if the federal tax credit for first-time home buyers was not offered, according to C.A.R. research conducted last year. We expect the state tax credit for home buyers to have the same impact.”

AB 183 will provide $200 million for home buyer tax credits, allocating $100 million for qualified first-time home buyers of existing homes and $100 million for purchasers of new, or previously unoccupied, homes. The eligible taxpayer who purchases a qualified personal residence on and after May 1, 2010, and on or before Dec. 31, 2010, or who purchases a qualified principal residence on and after Dec. 31, 2010, and before Aug. 1, 2011, pursuant to an enforceable contract executed on or before Dec. 31, 2010, will be able to take the allowed tax credit. The credit is equal to the lesser of 5 percent of the purchase price or $10,000, in equal installments over three consecutive years. Under AB 183, purchasers will be required to live in the home for at least two years or forfeit the credit (i.e., repay it to the state).

“AB 183 also will significantly contribute to efforts to stimulate jobs creation within California’s housing market by helping to incentivize first-time home buyers to purchase homes that have been abandoned, foreclosed upon, and returned to the lender; or have been sitting on the market for extended periods of time,” Goddard said. “It is these homes that will require substantial rehabilitation by the new owners, which will in turn generate a tremendous increase in jobs and accessory purchases connected to home improvement activities.”

Leading the way…® in California real estate for more than 100 years, the CALIFORNIA ASSOCIATION OF REALTORS® (www.car.org) is one of the largest state trade organizations in the United States, with nearly 150,000 members dedicated to the advancement of professionalism in real estate. C.A.R. is headquartered in Los Angeles.

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