This article points out the obvious, that smart people are buying up real estate now....
and the doom and gloomers wait.
It is clear since the bay area hit bottom in march that bay area real estate is a good deal right now! If you work with a realtor you will see how many listings are priced at an attractive price point. Just take a look!
Real Estate: Finally a Good Investment?
by Dave Kansas
Wednesday, January 19, 2011
The housing market still looks pretty bleak: There were a record one million foreclosures last year, home prices are still falling in many regions and the number of "underwater" properties is at a record high.
And things don't look much better in other areas of real estate. The number of construction jobs continues to decline, even as other parts of the economy have added jobs. And mortgage rates have moved higher as long-term Treasury yields have backed up during the past few months.
Basically, the real estate market remains a mess.
Real estate encompasses a wide range of markets — homes, apartments, hospitals, office buildings, strip malls, dormitories and other properties. But for our purposes, let's focus on residential real estate, or homes. Here are four reasons to think residential real estate might represent a bargain — with one big caveat.
Everyone hates homes.
Homes are probably the most hated asset class in the country. That's what happens when a bubble bursts. People avoid thinking about the value of their home. Sellers moan about no offers, buyers gripe about impossible lending requirements.
Hatred of an asset is often the precursor to contrarian interest, and being contrarian is at the heart of many investment strategies. To paraphrase Warren Buffett, be fearful when others are greedy and greedy when others are fearful. Mr. Buffett backed that idea when he invested in the stock market in the teeth of the financial crisis in late 2008 and early 2009.
Of course, being contrarian for its own sake isn't wise investing. Gold was hated for years ("dead money") before it recently became an attractive asset class. Still, a lot of smart ideas begin with the question: What does everyone hate?
Smart people are buying real estate.
This cohort is led by John Paulson, the hedge-fund manager who made $20 billion betting against the housing bubble. Last fall he said in a speech: "If you don't own a home buy one. If you own one home, buy another one, and if you own two homes buy a third and lend your relatives the money to buy a home."
Why is Mr. Paulson so adamant? Because he believes long-term interest rates are not going to get much lower. They have, in fact, risen since he gave that speech, but they remain remarkably low by historic standards. Low rates and the expectation that home prices will rise is his argument. For his part, Mr. Buffett has predicted the housing market will bottom this year.
Real estate performs well during inflation.
There's no inflation these days, but when buying a home one should take a longer view. And the longer view shows that the economy has enjoyed a disinflationary period since the early 1980s. A number of folks think that cycle is slowly reversing itself.
If that's the case, then convention would argue for holding assets that do well in an inflationary environment. That includes Treasury Inflation Protected Securities, commodities and real estate. Remember that during the stagflation nightmare of the 1970s, real estate had a strong run.
Inflation isn't a significant issue in the U.S., but it's a growing problem elsewhere. China and India have taken steps to fight inflation, the euro zone is getting flickers of inflation and the U.K. has had oddly higher prices (above 3%) for an extended period of time. If the cycle is slowly turning, real estate makes more sense.
Demand may be coming back.
Supply isn't as out of whack as it used to be. At the end of November, home builders reported 197,000 new homes on the market, the lowest level since 1968, according to Yardeni Research. The National Association of Realtors reports that the inventory of existing homes for sale fell 4% to 3.71 million homes, which represents a 9.5-month supply at the current sales pace, down from a 10.5-month supply in October.
Those aren't pretty numbers, of course, but they are moving in the correct direction. And that may be a reason that many home builder stocks, such as KB Home (NYSE: KBH - News), Hovnanian (NYSE: HOV - News), Pulte (NYSE: PHA - News) and Toll Brothers (NYSE: TOL - News), have come off their lows in the past several weeks.
It's all comes down to jobs. There are a zillion caveats to any positive home thesis, but the big one is unemployment. If the economy is not creating jobs, the chance of a rebound in housing is diminished. It's hard to buy a home without a job, and folks who aren't working don't want to take long-term risks.
The job market is still struggling and the debate is hot about when it will recover. Optimists see recovery this year. Pessimists see pain for several years ahead. How this X factor gets resolved will say a great deal about whether housing will rebound.
___
Thursday, January 20, 2011
Monday, January 03, 2011
Making selling easier for 2011
This article has a number of good tips!
I would advise sellers to not only look at homes at open houses but to get in the car with their realtor and actually tour the best comps that are close to their area.
That way they know they will be in line with the listings that come up as comps in their area.
Also I would advise for sellers to be more flexible as well. NO MORE APPOINTMENT ONLY listings.
This completely reduces the pool of available buyers by reducing their access to the home.
This is a terrible trend listing agents started when almost all homes were short sales and reos.
As the market begins to return to normal be the first seller to return to flexible viewing times in your area, as you will get a higher sale price with more buyers having access.
I think getting it listed before the rush this year is beneficial as well.
Keep dogs outside or in the garage if at all possible when buyers view the home.
Have all disclosures and inspections done early or before the home is listed to help the sales process. Hope this has been helpful!
I would advise sellers to not only look at homes at open houses but to get in the car with their realtor and actually tour the best comps that are close to their area.
That way they know they will be in line with the listings that come up as comps in their area.
Also I would advise for sellers to be more flexible as well. NO MORE APPOINTMENT ONLY listings.
This completely reduces the pool of available buyers by reducing their access to the home.
This is a terrible trend listing agents started when almost all homes were short sales and reos.
As the market begins to return to normal be the first seller to return to flexible viewing times in your area, as you will get a higher sale price with more buyers having access.
I think getting it listed before the rush this year is beneficial as well.
Keep dogs outside or in the garage if at all possible when buyers view the home.
Have all disclosures and inspections done early or before the home is listed to help the sales process. Hope this has been helpful!
Sunday, January 02, 2011
resolutions for home sellers from marketwatch
Resolutions for Home Sellers in 2011
by Amy Hoak
Sunday, January 2, 2011
If your New Year's resolution involves selling a home in 2011, you've got some work to do: There's lots of inventory out there and in a buyer's market like this one, getting an offer on a home can be challenging.
Still, for the committed seller willing to do some prep work and come to terms with the current value of his or her home, locking in a buyer isn't impossible.
By listing in early January, you might be able to catch some of those early birds who start browsing in the winter so that they can find a new home before school starts in the fall, said Louis Cammarosano, general manager of HomeGain.com, a real-estate website. In fact, many buyers tend to start their searches online right after Christmas, and continue throughout January and February, he said.
[Click here to check home equity rates in your area.]
"If you hit the ground running and you're a fresh listing that has done everything right, you've got the best shot," said Cammarosano.
Consider the following tips to give your home the best chance to get noticed -- and sold -- in 2011.
Price It Right from the Start
Many sellers suffer from attachment bias, said Tara-Nicholle Nelson, consumer educator for real-estate website Trulia.com. They believe that their home is worth more than they'd pay for it in another context. While it's always a bad idea to overprice a home, it's especially dangerous in times like this because there is so much competing inventory in many local markets.
Nelson's advice: Give yourself a reality check by looking inside comparable homes during open houses. That can help you get a clearer idea of your home's value.
[See 7 Towns Where Land Is Free]
You might even consider interviewing a few real-estate agents to get more than one take on how the home should be priced, Cammarosano said.
The longer something sits on the market, the more price reductions you might have to make and the more potential buyers will assume that there's something wrong with the home, he said. So more often than not, it's best not to try testing the waters with a higher price, he adds.
Don't be afraid to advertise in the listing and marketing materials that it's not a foreclosure or short sale, Nelson said. In markets where distressed sales are plentiful, there are buyers who simply don't want to deal with the extra hassle and uncertainty of a short sale or bank-owned property, she said.
Get the House Ready
Most sellers know they need to declutter, paint in neutral colors and generally stage the home as best as they can to help buyers envision themselves in the home. Often, this is done on the advice of a real-estate agent or professional stager.
The closer you can get your home looking like a photo from a Pottery Barn catalog, the better off you will be, said Beth Jaworski, a real-estate agent in the Milwaukee area.
And make sure that your cabinets and refrigerators are cleaned out and decluttered, too. "You want to have a minimum of 'stuff' in the house. The less stuff you have, the larger the closets, basement and garage will look," she said.
Jaworski also recommends having a home inspection done a month before putting the home on the market to identify any major defects that need to be corrected.
Provide as Much Information as Possible
Have energy bills and a list of updates available for buyers to see, Jaworski said.
"Buyers are always curious what the utility bills are, how old the roof is, how many layers it has, how old the major mechanicals are and when that addition was added," she said. "The more information you can provide on the house, the better."
Consider providing a floor plan with listings as well, Cammarosano said. That way the prospective buyers don't have to keep making return visits to determine how their furniture will fit in the space -- they'll have the dimensions in hand.
Make It Easy to Show
The more available you can make your home for showings, the better, said David Welch, a broker/associate in Orlando, Fla.
Make it easy for your real-estate agent to access the property and keep the place clean.
[See Make Money in 2011: Your Home Edition]
"You want your home to be easy to show because you don't know if you will get a second chance," Welch said. "Trust me, the buyer wants to like your house. Keep it in show-ready condition," he said, so they aren't turned off by a first impression.
Be Flexible
Buyers are in the driver's seat these days, and they know they can make all sorts of unusual requests without risking the deal. Be ready.
"Buyer wants to see the house at 7 a.m. on Tuesday, OK," Jaworski said. "Buyer wants to bring 10 family members and an inspector to check out the house for three hours this weekend, OK. Buyer wants you to include the kitchen table and chairs, the painting over the fireplace and your snow blower, OK."
"The more flexible you are," she said, "the better off you will be."
Amy Hoak is a MarketWatch reporter based in Chicago.
by Amy Hoak
Sunday, January 2, 2011
If your New Year's resolution involves selling a home in 2011, you've got some work to do: There's lots of inventory out there and in a buyer's market like this one, getting an offer on a home can be challenging.
Still, for the committed seller willing to do some prep work and come to terms with the current value of his or her home, locking in a buyer isn't impossible.
By listing in early January, you might be able to catch some of those early birds who start browsing in the winter so that they can find a new home before school starts in the fall, said Louis Cammarosano, general manager of HomeGain.com, a real-estate website. In fact, many buyers tend to start their searches online right after Christmas, and continue throughout January and February, he said.
[Click here to check home equity rates in your area.]
"If you hit the ground running and you're a fresh listing that has done everything right, you've got the best shot," said Cammarosano.
Consider the following tips to give your home the best chance to get noticed -- and sold -- in 2011.
Price It Right from the Start
Many sellers suffer from attachment bias, said Tara-Nicholle Nelson, consumer educator for real-estate website Trulia.com. They believe that their home is worth more than they'd pay for it in another context. While it's always a bad idea to overprice a home, it's especially dangerous in times like this because there is so much competing inventory in many local markets.
Nelson's advice: Give yourself a reality check by looking inside comparable homes during open houses. That can help you get a clearer idea of your home's value.
[See 7 Towns Where Land Is Free]
You might even consider interviewing a few real-estate agents to get more than one take on how the home should be priced, Cammarosano said.
The longer something sits on the market, the more price reductions you might have to make and the more potential buyers will assume that there's something wrong with the home, he said. So more often than not, it's best not to try testing the waters with a higher price, he adds.
Don't be afraid to advertise in the listing and marketing materials that it's not a foreclosure or short sale, Nelson said. In markets where distressed sales are plentiful, there are buyers who simply don't want to deal with the extra hassle and uncertainty of a short sale or bank-owned property, she said.
Get the House Ready
Most sellers know they need to declutter, paint in neutral colors and generally stage the home as best as they can to help buyers envision themselves in the home. Often, this is done on the advice of a real-estate agent or professional stager.
The closer you can get your home looking like a photo from a Pottery Barn catalog, the better off you will be, said Beth Jaworski, a real-estate agent in the Milwaukee area.
And make sure that your cabinets and refrigerators are cleaned out and decluttered, too. "You want to have a minimum of 'stuff' in the house. The less stuff you have, the larger the closets, basement and garage will look," she said.
Jaworski also recommends having a home inspection done a month before putting the home on the market to identify any major defects that need to be corrected.
Provide as Much Information as Possible
Have energy bills and a list of updates available for buyers to see, Jaworski said.
"Buyers are always curious what the utility bills are, how old the roof is, how many layers it has, how old the major mechanicals are and when that addition was added," she said. "The more information you can provide on the house, the better."
Consider providing a floor plan with listings as well, Cammarosano said. That way the prospective buyers don't have to keep making return visits to determine how their furniture will fit in the space -- they'll have the dimensions in hand.
Make It Easy to Show
The more available you can make your home for showings, the better, said David Welch, a broker/associate in Orlando, Fla.
Make it easy for your real-estate agent to access the property and keep the place clean.
[See Make Money in 2011: Your Home Edition]
"You want your home to be easy to show because you don't know if you will get a second chance," Welch said. "Trust me, the buyer wants to like your house. Keep it in show-ready condition," he said, so they aren't turned off by a first impression.
Be Flexible
Buyers are in the driver's seat these days, and they know they can make all sorts of unusual requests without risking the deal. Be ready.
"Buyer wants to see the house at 7 a.m. on Tuesday, OK," Jaworski said. "Buyer wants to bring 10 family members and an inspector to check out the house for three hours this weekend, OK. Buyer wants you to include the kitchen table and chairs, the painting over the fireplace and your snow blower, OK."
"The more flexible you are," she said, "the better off you will be."
Amy Hoak is a MarketWatch reporter based in Chicago.
Wednesday, December 22, 2010
Thursday, December 16, 2010
This spring promises to be a busy one...
Every realtor I have compared notes with agrees with Decembers activity(Dec is a slow month in RE), this spring should be a busy one. Real Estate prices may fall in other parts of the country,
but the Bay Area is resilient....much more so than other areas. Between now and April, when it will get busy should be a great time for knocking on doors and looking at inventory.
Other areas of BAY AREA REAL ESTATE, such as Palo Alto Real Estate and even Santa Cruz Real Estate , promise to be busy as well.
Go knock on some doors, you might find the perfect home!
Tom Merigan tmerigan@yahoo.com 408-559-1069 http://www.sanjoserealty.net
but the Bay Area is resilient....much more so than other areas. Between now and April, when it will get busy should be a great time for knocking on doors and looking at inventory.
Other areas of BAY AREA REAL ESTATE, such as Palo Alto Real Estate and even Santa Cruz Real Estate , promise to be busy as well.
Go knock on some doors, you might find the perfect home!
Tom Merigan tmerigan@yahoo.com 408-559-1069 http://www.sanjoserealty.net
Tuesday, December 14, 2010
Good news! Fewer US home owners underwater...
Fewer homeowners underwater in the third quarter
By Alejandro Lazo
Los Angeles Times
Posted: 12/13/2010 02:22:09 PM PST
Updated: 12/13/2010 08:37:55 PM PST
LOS ANGELES -- The number of homeowners in the U.S. who owe more on their properties than what those homes are worth has declined steadily for most of 2010, according to statistics released Monday.
But the drop in properties with negative equity has more to do with troubled borrowers losing their homes to foreclosure than an increase in prices.
About 10.8 million, or 22.5 percent, of residential properties with mortgages were in negative equity positions at the end of the third quarter, according to Santa Ana research firm CoreLogic. That is down from 11 million, or 23 percent, in the second quarter.
The number of underwater borrowers has declined by more than 500,000 during the first nine months of 2010, according to CoreLogic.
By Alejandro Lazo
Los Angeles Times
Posted: 12/13/2010 02:22:09 PM PST
Updated: 12/13/2010 08:37:55 PM PST
LOS ANGELES -- The number of homeowners in the U.S. who owe more on their properties than what those homes are worth has declined steadily for most of 2010, according to statistics released Monday.
But the drop in properties with negative equity has more to do with troubled borrowers losing their homes to foreclosure than an increase in prices.
About 10.8 million, or 22.5 percent, of residential properties with mortgages were in negative equity positions at the end of the third quarter, according to Santa Ana research firm CoreLogic. That is down from 11 million, or 23 percent, in the second quarter.
The number of underwater borrowers has declined by more than 500,000 during the first nine months of 2010, according to CoreLogic.
Friday, December 10, 2010
Local Area Annexation to go to San Jose or Campbell?
One of the hottest topics in West San Jose is whether or not the area between Union/Bascom/Camden
will be annexed by San Jose or Campbell....Having been a resident of this pocket for the last 15 years or so I can tell you that residents here consider themselves part of Campbell. If it had to go to vote Campbell would get the land. But San Jose has had it on the books as theirs since the mid 1970's. I am including an interesting article below by John Woolfolk published in the San Jose Mercury recently.
Tom Merigan tmerigan@yahoo.com 408-559-1069 http://www.sanjoserealty.net
Busy December
Looking around with buyers this December for anything good is a challenge....seems like good properties in the nice parts of San Jose are going pending mighty quickly....I have been saying since fall I think we are setting up for a very busy SPRING in Real Estate. In November it was reported santa clara county prices were up again, so we are seeing a slow but steady rise in prices recently:
http://www.prnewswire.com/news-releases/santa-clara-county-housing-sees-increase-in-average-sales-price-107081898.html
When consumers realize this they are eager to buy as they see the local market as coming off the bottom and rising. San Francisco home prices are going lower though.
http://www.bloomberg.com/news/2010-11-18/san-francisco-home-prices-fall-for-first-time-in-year-update2-.html
So from a consumer perspecitve Santa Clara county seems the more attractive option at this point!
We will get a big surge in the spring if the trend holds true. So do not not wait for the spring if you want to be ahead of the "pack"
Tom Merigan tmerigan@yahoo.com 408-559-1069 http://www.sanjoserealty.net
http://www.prnewswire.com/news-releases/santa-clara-county-housing-sees-increase-in-average-sales-price-107081898.html
When consumers realize this they are eager to buy as they see the local market as coming off the bottom and rising. San Francisco home prices are going lower though.
http://www.bloomberg.com/news/2010-11-18/san-francisco-home-prices-fall-for-first-time-in-year-update2-.html
So from a consumer perspecitve Santa Clara county seems the more attractive option at this point!
We will get a big surge in the spring if the trend holds true. So do not not wait for the spring if you want to be ahead of the "pack"
Tom Merigan tmerigan@yahoo.com 408-559-1069 http://www.sanjoserealty.net
Tuesday, September 06, 2005
San Jose-Silicon Valley housing market........
Have we reached the top of the real estate market here in San Jose-Silicon Valley, why or why not? July was a slightly down month price wise as it appears was August....will September bring back the buying interest/prices as it traditionally does in the fall? All you Karnacs out there, what does the future have in store?
Wednesday, August 10, 2005
Welcome to my San Jose Real Estate BLOG!
Hello~
My name is Tom Merigan with Sanjoserealty.net and I started this blog to discuss real estate/housing and living in the San Jose/Silicon Valley area. Many people I help relocate out here cannot believe our housing costs (sticker shock) but for residents here it is all part of the Silicon Valley genre. Please feel free to start your own discussion and thanks!~
Tom
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