Posts Tagged ‘San Francisco’

Intero Insider: The News Is Up! And It Is…Good?

By Gino Blefari | May 12th, 2010 0 Comments

Yesterday, the good folks over at Zillow released the results of its First Quarter 2010 Survey. Was the news good? Sort of. Maybe. A little.

First, the facts:

Home values in California appear to be on the rise. During the First Quarter of 2010, home values in Los Angeles, San Francisco, San Diego, Santa Barbara and Ventura County showed marked increases.

Nationwide, home values continued to decline in the first quarter of 2010. The Zillow Home Value Index showed a 3.8% decline for the same period last year — this makes thirteen consecutive quarters with year-over-year declines. In 106 of the 135 markets tracked, home values fell.

Negative equity is rising steadily. In the Fourth Quarter of 2009, 21.4% of single family homes had mortgages that were “underwater” or “upside-down,” meaning that more was owed on the mortgage than the home was worth. In the First Quarter of 2010, that number rose sharply to 23.3% — nearly ¼ of all mortgages on single-family homes.

Foreclosures reached an all-time high in March 2010. According to Zillow’s survey, more than one out of every 1,000 U.S. Homes — a startlingly high number — went into foreclosure that month.

It is interesting to me to compare this national level data with what I am seeing here in Silicon Valley at the Street level, which is always, in my opinion, the most useful way to look at the housing market. Here I am seeing lots of signs of market vitality. Recently, a listing in Cupertino received 14 offers. A listing in San Jose received 6 offers just this week. This seems to be going on at both the entry level – where one might expect to see such things – but also towards the higher end.

This is information that, especially if you’re planning on selling a home, is very important for you to understand. You need the big picture, but also the picture in your neighborhood or on your block.

Please talk to your Intero real estate professional. We’ll make sure you have all of the facts, and every tool at our disposal to make sure that you make educated decisions about your home sale. We’ll tell it to you the only way we know how: like it is.

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Intero Insider: Reality Check!

By Gino Blefari | April 7th, 2010 0 Comments

Each time a glimmer of positive news about the real estate market shows its face, economists, real estate professionals, and politicians alike begin to shout, “We’re on our way back up! Nothing but blue skies ahead!”

While I remain hopeful, I think assertions like this are foolhardy and irresponsible.

Anyone who lives in the State of California, or who’s considered moving here, knows that the real estate market for the past several years has been pretty grim. As quickly as California’s home values increased through 2005, they have since fallen considerably due to the economic downturn, and foreclosures have run rampant.

Recently, some improvements have been noted. In the last S&P/Case-Shiller home price index, for example, home prices in California were shown to have strong gains. In Los Angeles, prices rose 1.8% in January. There were gains in San Diego of 0.9% and in San Francisco, the gain was 0.6%.

This is terrific news, make no mistake, but I suggest that a more cautious view be taken.

Here’s why.

Historically, spring home sales (and the spring market doesn’t wait til March to begin, I assure you) are the strongest of any throughout the year. Weather improves, making it more pleasant to look at homes, and people want to be able to buy a new home, so that they can move at the end of the school year, or what-have-you.

This year, we also have the Homebuyer’s Tax Credit driving more buyers into the marketplace. Add to this the fact that mortgage rates are still at rock-bottom levels, which have been made possible, in large part due to the Federal Government’s sizable activity in mortgage-backed securities, and the market for buyers is very, very attractive.

Here’s where things get sticky.

The tax credit is set to expire in just a couple of weeks. The pressure to buy before it expires will be gone. Strike one. The Federal government is about to remove itself from the mortgage-backed securities game. Mortgage rates are going to rise. Strike two. There’s wide speculation that foreclosures are going to get worse before they get better (unfortunately). Strike three.

At Intero, we choose to stay level-headed. We choose to stay in the game that’s currently being played, not the one that may or may not come in the near future. We are hopeful that things will improve, but until they do, you need agents who are dealing with reality. You need agents who will tell you like it is. Agents who know the markets in which they work and live. Intero are those agents.

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Intero Insider: Seeing Signs of Recovery Yet?

By Gino Blefari | March 2nd, 2010 0 Comments

One week, it’s up. The next week? Down. No matter what the experts say, the fact remains that no one really seems to be able to put their finger on how fast or slow the recovery of the real estate market will be.

There are some who say that we haven’t seen the worst of it yet (and we sincerely hope that’s not true).

Others have a shinier view, saying that the turnaround has been made and that we’re well on the way back.

I think it’s more prudent to take things more cautiously. To brace myself for setbacks, but to take heart in the great strides the real estate industry has made in the past year. Make no mistake, however, the recovery of this sector isn’t going to be instantaneous, no matter how badly we’d like it to be. The boom market by which we were spoiled lasted the better part of a decade, and it left a great deal of wreckage in its path.

That said, last week, Standard & Poor’s released its quarterly home price numbers. And what they show is encouraging. They show that, while it’s gradual and slow, recovery is, most certainly, taking place. For the seventh consecutive month, there was an improvement in pricing. Granted, this quarter’s increase was just three tenths of a percent, but it’s an increase all the same.

Substantial gains were seen in San Francisco, which saw a five percent gain, in San Diego and Dallas, each of which showed gains of three percent, and gains that were far above average in Washington, DC, Boston and Denver. Even cities that have been hit (and hit very hard) by the sagging real estate market, such as Las Vegas and Phoenix, saw increases, and that’s not something that’s happened for them in a very long time.

Even Warren Buffet, whom we all can agree knows a thing or two about money, seems to feel that we’ll have recovered from this slump by 2011. He said recently that while prices will remain below “bubble” levels, a more normalized market will be return by sometime next year.

We are, by no means, over every hurdle. We are not sprinting toward the finish line. But we are making progress. Slow and steady, to be sure, but progress. I take heart in that. I think that a measured recovery is the key to winning the race and standing on the podium, once and for all.

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Are Bank Owned and Short Sales Always a Good Deal?

By Russ Boyd | January 25th, 2010 0 Comments

All home buyers have one thing in common: Everyone wants a great deal. The buying public seems to think that “great deal” equals foreclosure, short sale or bank-owned property. The truth is that these properties may appear to be bargains, but in many cases you could be buying someone else’s problems. So the real issue is whether the foreclosure, bank owned or short-sale property you’re considering is a bargain or problem. If you’re looking for a bargain property, here are some key issues to consider:


1. What is your time line for purchasing?
You may find the perfect short-sale property, and the seller may accept your offer. The challenge is that you don’t have a deal until the bank approves the short sale. At many large lenders, a single short sale processor may have hundreds of files to handle at one time. I’ve experience delays of up six to get an offer approved. The wait can be extremely frustrating and it can also be costly.

For example, months from now the offer made today you may be too high or to low. Also, interest rates are more likely to go up rather than down during the coming year. And, just because the seller has accepted your price, it doesn’t mean the bank will. You will have a better shot at buying a short sale where the bank has preapproved the sales price. It still may take a long time to close, but not as long as it would if the price was not preapproved.


2. Are you prepared to be in a multiple-offer situation?
You’re not the only one looking for a “bargain.” Many buyers are searching for distressed properties and the approval process takes so long, multiple offers are common. The sellers agent or lender will not tell you about the details of other offers.


If another offer comes in at a higher price and at better terms, the bank is obligated to take the best offer. If the property is a short sale, the seller’s signature on the document merely opens the negotiation – it does not finalize it. Furthermore, the seller/lender may continue to market the property even after they have signed a contract with you.

3. Ask the agent if the seller participated in the “Cash for Keys” program
The best candidates for good bargains are those properties where the sellers are still occupying them. Many banks have a program called “Cash for Keys.” This program pays the owners of foreclosure and short-sale properties money to keep the owner from trashing the property when they move out. It’s not uncommon for disgruntled owners or tenants to remove or damage appliances, plumbing and electrical systems. Cash for Keys is designed to minimize these behaviors.


4. Beware of tenant occupied and vacant properties
It’s never a good practice to purchase a property without doing a physical inspection. Also, be sure you have stipulated the right to make a final inspection prior to closing.  This is especially important with distress sales.  Also, if the property is tenant occupied be sure the contract states the property must be delivered to you vacant.  Trust me, you don’t want to be responsible for evicting a tenant.   Also, the longer a house stays vacant, the more likely it is that problems will develop.  Not only vandalism, but rats and mice are more likely to move into vacant properties. Rodents can chew through the wiring and generally wreak havoc with the home’s electrical systems.


5. Is the deal more important than your lifestyle?
A property can be a great deal in terms of the price, but is it worth it if it’s in a poorly rated school district or if you end up with an extended the commute? A “bargain price” won’t make up for a poor floor plan, airplane, train or traffic noise or the occasionally whiff of the sewage treatment plant? When you purchase, it’s important that you take all of these issues into consideration rather than focusing exclusively on the price. A property with any of these types of problems will be harder to sell in the future.

As you can see, it’s important to consider the price in conjunction with the quality and the convenience of your lifestyle once you move in.

Of course there are good distressed property deals out there. Nevertheless, don’t limit your search. Keep in mind that, depending on the neighborhood and price range, anywhere for 10 to 50 percent of the sales may be distress sales. This means that 50 to 90 percent of the available homes are likely occupied by owners that are maintaining their homes and in better neighborhoods. In the long run, they may be a much better bargain.


A true bargain is when you find a home in the neighborhood and price ranges that fits your lifestyle. A house you will be proud to call home.

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Moving at the Speed of Opportunity

By Russ Boyd | January 11th, 2010 0 Comments

You’ve probably heard the old saying “You Snooze, You Lose!” I’m told that the line came from the character known as George Owens on the 80’s sit com, “Mr. Belvedere.”

I think the words spoken by “George Owens” say a lot about where some “homebuyers” are relative to this market. Hopefully that’s not you.

Some people are sitting on the sidelines…taking a wait and see attitude, waiting for the market to “change,” hoping that some of the perceived risk will be reduced by more stable credit and mortgage markets, and wishing that just one more piece of positive news would filter out of the media to convince them to become active and take action.

Well, guess what? It just isn’t going to happen that way. Not if you want to capture the market at the bottom, at least. Let me explain why, and how to avoid “staying sidelined,” so you are in the right position to capture current opportunities.

Imagine for a moment that you are attempting to merge onto the freeway, where traffic is moving at 65 miles per hour -  now picture yourself coming to a stop.

Being behind somebody that stops on an on ramp waiting for the “right opportunity” can be scary, yet I imagine it’s happened to all of us at one point or another.

So, when you’re at a standstill, how hard it is to find just the right opening between the rapidly moving cars. You know how hard it is to get your car to go from zero to 65 miles an hour in a very short distance and merge into flowing traffic. It’s not easy.

Now, picture yourself in this same situation – only this time, you continue moving down the on-ramp, and, once you find the right opening to merge, you join effortlessly into the moving traffic.

Simply put – it’s hard to find an opening when you are standing still. You know this – but did you know that this principle is not just a question of physics – it’s a question of money and opportunity? And did you know that it applies to many would be home-buyers?

Movement creates opportunity. It invites new things to happen. Movement means you are ready to take action – that you are responding and adapting to the changing marketplace.

As the market continues to evolve we are past the time to watch, to wonder and to wait. Now is the time to pay attention! Watch what’s happening, and look for your opportunity. Believe me the growing positive statistics, like those at our Market Activity website, www.bayareamarketmetrics.com reveal that there are plenty of buyers ready to jump at the right opportunity. Remember, if you are sitting on the sidelines, all you can do is watch.

But what about those that “just got lucky”, right? Well here’s how people get “lucky”, they (1) they get into motion, (2) they get their financing lined up, (3) they find a great agent who welcomes their business and they start looking for the right home (4) They make an offer that fits the circumstances, (5) and THEN they “get lucky”. In other words, they are people willing to move at the “speed of opportunity”.

Remember, just like you can’t easily merge onto a highway from a dead stop -  neither can you find the best home buying opportunity unless you are moving at the “speed of opportunity.”

If you want to move at the “speed of opportunity”, a good place to start is understanding the current level of market activity. Our Bay Area Market Metrics Report can be viewed at www.bayareamarketmetrics.com.

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