Silicon Valley Market Update: September 2011

As we make our way through October, it’s time to take a step back and look at how the real estate market fared last month. As I am sure you can tell when comparing to previous months, I have decided to change things up and thought we could try a new format for the Market Update to help makes things a little more visually appealing. As you can see in the graph below, I’ve compiled the data on the number of closed sales and the median sale price for single family homes in the communities of Cupertino, Los Altos, Los Altos Hills, Mountain View, Palo Alto, Santa Clara, Saratoga, and Sunnyvale for September 2011.

Silicon Valley real estate statistics for September 2011. Information contained in this graphic is deemed reliable but not guaranteed.

As always, if you would like an update on the market for an area not listed above or a detailed market analysis for your home, get in touch with me.

 

Intero Weekender: September 23-25

If you’re looking for something fun to do this weekend, check out the weekly Intero Weekender below! There’s plenty going on throughout the South Bay and Peninsula…

 

Intero Insider: Can Refinancing Save the Day?

This week we have Intero President & CEO Gino Blefari examining President Obama’s idea of helping homeowners save money through expanding programs to assist them with refinancing their mortgages:

We haven’t heard much from President Obama this summer on the housing market – other than ideas for fixing the Fannie Mae/Freddie Mac problem. He’s certainly had a lot of other things to deal with. But he ended the silence in his speech on jobs last week when he said that he’s looking to broaden U.S. homeowners’ access to mortgage refinancing as a way to get more money back in their pockets.

This wasn’t terribly exciting to hear since we’ve already seen some pretty big failed attempts at “refinancing” away the housing problem. In fact, the real housing news in the President’s speech was the $447 billion jobs package itself. We all know that jobs are the real answer to cleaning up the national housing recession.

Still, Obama believes that by broadening refinancing, the average family can save more than $2,000 a year – a much-needed boost for many. In fact, with average rates on long-term fixed-rate mortgages at ridiculously low levels – 4.12% on a 30-year fixed last week – refinancing does seem like a great option for the economy. So, what is the problem? Why aren’t millions of people already refinancing their loans? Why does the government even need to create a special refinancing program?

The problem has been that even with rates as low as they are, many homeowners have been shut out of refinancing because they either have shoddy credit histories or owe more on their original mortgage than their home is worth. What the government is trying to do now is remove these and other barriers. White House officials said in news reports on the topic that the U.S. Treasury was in talks with Fannie Mae, Freddie Mac and the Federal Housing Finance Agency about ways to open up refinancing.

The problem with simply removing these barriers to refinancing is that it could cause investors in the mortgage market to lose billions of dollars. Some also say it could put Fannie and Freddie at greater financial risk. It will come down to weighing cost versus benefit: Will that extra $2,000 per year for the average homeowner be enough to save him? And is that worth turning off many more investors who will lose much more than that?

The administration hasn’t released any specifics of how a new refinancing program would work or how it would affect the mortgage industry. But they expect to begin releasing details over the next several weeks.

Refinancing is a great idea and a great privilege to those homeowners for whom it makes sense. But, at some point in this plan, I hope we see more scrutiny of the overall benefit of a government-supported program to help the overall housing economy. We have real problems in the national housing market that affect real people; I’d hate to see it continue to be just another political platform to stand on.

 

Intero Insider: 16% of Home Purchases Fell Through in June – What Can Buyers Do?

Intero President & CEO offers his advice on how you can avoid seeing your home purchase fall through in the current market:

The latest national home sales report from the National Association of Realtors shows a 3.5% drop in July home sales from June and a 21% improvement over the same month a year ago. But that’s not the big news.

Home sales reports are pretty much meaningless when taken out of context – both in a national and local example. In this case, it’s hard to be excited by the fact that sales were up 21% from a year ago (remember: last summer’s sales were extremely weak due to the fact that many buyers rushed in the spring to get deals in place before the Home Buyer Tax Credit expired).

Instead, the most eye-catching statistic to come out of NAR’s July report was the fact that 16% of its members reported contract failures last month – cancellations caused largely by declined mortgage applications or failures in loan underwriting from appraised values coming in below the negotiated price.

This is worrisome. Though the 16% is unchanged from the previous month, it still bears a substantial number of deals that are stopping dead in their tracks. While there’s nothing buyers – or anyone else for that matter – can do about appraisals coming in below the negotiated purchase price, borrowers can prepare themselves for the mortgage loan application process:

Save money

Obvious, but often overlooked. Buying a home takes a big chunk of cash no matter where you purchase. Lenders need to know you have your own skin in the game with your cash down payment. There are many upfront fees and taxes that you need to pay in order to close. You’ll need a direct line to this money from day one of your home buying journey.

Check and proof your credit history

First things first: visit AnnualCreditReport.com to get your free yearly credit history report from each of the three major reporting bureaus – Experian, TransUnion and Equifax.

If there’s a problem – like your number is below 620 and you’re looking for a conventional mortgage – then you need to figure out if there’s anything you can do to help improve it. Keep in mind that the only sure fix for credit report problems is time. However, there are things you can do such as requesting wrong information to be fixed, lowering your credit utilization ratio (the amount of credit you use in relation to the amount of credit you have), and getting your bills paid on time. Check with your mortgage professional for more details.

Stay in your current job, if possible

Lenders like to see a solid employment situation, which often means having been at your job for more than a year or two.

Be sensible about your final offer

Work with an experienced real estate agent in your neighborhood – someone who’s seen a lot of nearby houses sell over the years, someone who’s studied the price differences and changes through time. This agent can really help you craft a bulls-eye offer that leads to the purchase price that makes the most sense for the whole transaction.

The market is full of opportunities right now. But, as a buyer, you’re going to need to be on top of your financial game to take advantage. Much of this takes time, but can be done. Talk to your mortgage professional today and get started. This market isn’t going to suddenly change, but it’s not going to be in buyers’ favor forever.

 

Founder of ForSalebyOwner.com Gives Up on Selling His Own Home

Image via Wikipedia

I came across an interesting story regarding Colby Sambrotto, the founder of website ForSalebyOwner.com. Sambrotto decided–after six months without any success–to give up on trying to sell his home without a Realtor. AGBeat reports:

Founder and former CEO of ForSalebyOwner.com, Colby Sambrotto listed his 2,000 square foot New York condominium on his own through online classified ads and FSBO sites, but after six months, he opted to hire New York broker Jesse Buckler who immediately advised a price change as the listing was not attracting the right buyer.

After giving up on the DIY route, Sambrotto’s decision to hire a broker led to attracting multiple offers, closing for $150,000 over the original asking price. The Wall Street Journal reports the listing sold for $2.15 million including a 6% commission.

You can read the rest of the original article by clicking here. All in all, I guess Mr. Sambrotto–like the majority of people who attempt to sell their homes on their own–discovered the hard way that he needed a professional real estate agent to get the job done.

 

Water Conservation in and around Your Home

As a Certified EcoBroker®, I like to put my green designation training for real estate professionals to use by sharing both energy and money saving tips with all my blog readers. Today, I thought we could tackle the issue of water conservation, taking a look at how you can cut back on how of much this precious natural resource is used in your home and save on your water bill at the same time.

In the U.S. alone, over 410 billion gallons of water is used every day. The average household uses about 350 gallons daily, adding up to over 120,000 gallons a year. Not only does this high water usage deplete our global water supply, it costs money in heating and utility bills. By switching to water saving technologies and implementing simple conservation measures, households can reduce their daily water use by up to 35%, saving billions of gallons per day nationally.

There are numerous measures you can take to help reduce the amount of water used in your home. One of the easiest ways to save water is to turn off faucets when you aren’t using them. This includes while you are shaving, shampooing your hair, washing dishes, or soaping up. Just turning off the water while brushing your teeth can save you over 25 gallons of water every month. Instead of running the water while doing dishes, consider filling up the sinks with soap on one side and rinse water on the other. This will save you gallons of water every time you clean. If you have to use the dishwasher, be sure and run full loads. The same applies to your clothes washer and dryer. By doing so, you can save thousands of gallons of water every month and minimize the amount of soaps and detergents you use. Don’t do laundry unless you have to. Reuse towels multiple times before washing them to prevent unnecessary water usage. When preparing meals, defrost food in the fridge or microwave instead of running hot water over them. This will prevent you from literally watching water go down the drain without truly serving a purpose. Finally, dispose of spiders and tissues in the trash can instead of flushing them down the toilet. Since toilets (even low-flow models) use between 1.5 and 6 gallons per flush, unnecessary flushing is a direct drain off your water supply.

In addition to implementing water conservation methods inside your home, there are some things you can do outside to help minimize water use as well. Consider using a commercial carwash that uses recycled water instead of washing your car yourself. Cover pools, spas, and hot tubs to prevent evaporation, especially in off-seasons when you rarely use them. Also, use a broom instead of a hose to clean porch, driveway, etc. Both serve the same purpose, but using a broom can help save gallons of water every time. One of the biggest uses of water in and around homes is outside in the garden and lawn.

For more tips on ways to save water every day in your home, visit: wateruseitwisely.com/100-ways-to-conserve/index.php.

Estimated Cost Savings

Making daily choices to help conserve water can help reduce your water use and heating bills by up to 35%. Many of the choices you can make are either free or very inexpensive, yet can save you hundreds of dollars every year. In addition to financial benefits, saving water helps conserve the world’s natural resources, making it friendly to both your wallet and the environment.

Regional Issues

Some areas have strict water use codes, especially areas prone to droughts. Check with your city administration to find out what the water codes are in your area and be sure to follow them. Regional codes typically provide water saving techniques that can help save you money, so it is a good idea to always keep them in mind, even if droughts end and codes relax.

 

Intero Insider: How to Save $67,960 on Your Next Home Purchase

Read on for Intero President & CEO Gino Blefari’s thoughts on how the downgrade of our nation’s debt rating could potentially benefit you:

Standard & Poor’s downgrade of the U.S. debt rating this month sparked speculation about what the effects would be on stock, bond and key interest rate markets. A lot of conversations centered around the prediction that interest rates for mortgages would increase dramatically, damaging an already delicate housing recovery.

So far, the opposite is true. We’re talking down, down and down again. In the tumultuous days following the S&P downgrade, rates on 30-year fixed-rate mortgages fell to 4.32%, according to Freddie Mac’s Primary Mortgage Market Survey.

I realize I’m the CEO of a real estate company so you’d expect me to say this: But, now truly is an opportune time to borrow money for real estate if your finances are in a solid, healthy state. Borrowers who lock in super low rates stand to save a substantial amount of money over the life of a mortgage.

Take this example: A borrower with a $450,000 30-year mortgage with a 4.3% interest rate would have a monthly payment of $2,227 and pay a total of $351,692 in interest. If their rate on their fixed-rate mortgage had been 5%, they’d pay $2,416 a month and $67,960 more in interest over the 30 years.

Substantial!

Could rates go even lower? Who knows? Seriously. We don’t know. However, S&P also downgraded Fannie Mae and Freddie Mac, which means borrowing could get more expensive for the mortgage giants. That increase likely gets passed on to consumers.

Even if you refinanced last year at an average 5.5%, a rate drop to below 4.5% is worth a check-in on the math of refinancing. When rates really do start moving up, you don’t want to look back and think “I wish I’d…”

Interest rates really do matter….It’s as good a time as any to borrow money. Talk to your mortgage advisor today!

Don’t have a mortgage advisor? I’d be happy to put you in touch with someone who can assist you in that department!

 

Silicon Valley Market Update: July 2011

It’s that time of the month again–the stats for how the real estate market fared last month are in. In the table below, I’ve compiled the number of closed sales, average days on market (DOM), and average sales price for single family homes in the communities of Cupertino, Los Altos, Los Altos Hills, Mountain View, Palo Alto, Santa Clara, Saratoga, and Sunnyvale for July 2011. Additionally, I have thrown in the data from July 2010 to provide a comparison.

Silicon Valley real estate statistics for July 2011. Information contained in this table is deemed reliable but not guaranteed.

As always, if you would like an update on the market for an area not listed above or a detailed market analysis for your home, get in touch with me.

 

Intero Weekender: August 5th to 7th

If you’re looking for something fun to do this weekend, check out the Intero Weekender below! There’s plenty going on throughout the South Bay and Peninsula, including the San Jose Renaissance Faire!

 

Silicon Valley Market Update: June 2011

Well readers, 2011 seems to be flying by as we are approaching August in just a few hours now. It has certainly been a busy summer for me working with my clients, but I wanted to update you all before we head into the new month on the real estate statistics that were released this month for June 2011 in some of our local Silicon Valley cities.

In the table below, I’ve compiled the number of closed sales, average days on market (DOM), and average sales price for single family homes in the communities of Cupertino, Los Altos, Los Altos Hills, Mountain View, Palo Alto, Santa Clara, Saratoga, and Sunnyvale for June 2011. Additionally, I have thrown in the data from June 2010 to provide a comparison. Across the board in all eight cities being followed, we saw an increase in the average sales price from one year ago.

Silicon Valley real estate statistics for June 2011. Information contained in this table is deemed reliable but not guaranteed.

As always, if you would like an update on the market for an area not listed above or a detailed market analysis for your home, get in touch with me.