Below is a good article that answers part of a BIG question that I have been asked relentlessly, by not only my clients, but other curious house hunters ..."Is now the time to buy or should I wait another six months (or more)?"   

Of course, the question has to be answered uniquely for each individual, but let's just say your answer is YES to the following questions: a) Are your finances in order - good credit, ample downpayment, ability to take on a new mortgage per tighter lending guidelines? b) Do you have a Realtor(R) you have partnered up with who will guide you every step of the way to ensure you are avoiding the riskier deals and also spotting the good ones? This is after all a huge investment. c) Are you free from any other show-stopping debts? ie: you don't have to first sell your home in order to put the down payment on the purchase (average days on market is up to 55 and 56 days for single family homes and condos, respectively) and d) Do you want the potential to start making money for yourself, not your landlord? Rents have also increased in the Santa Clara County as much as 12.2% according to the LA Times.

Generally speaking, the two biggest changes that we've seen in the Santa Clara County are a slowdown in the sales pace, down 35% from October 2006, with 15.7% of the listings currently pending (also down from 38% in October 2006) - which means there are more sellers out there, many in very unfortunate situations, desparate to sell before it becomes the bank's property. That said, inventories continue to head north with over 8 months of inventory at the current sales pace. Different from the rest of California and the rest of the nation for that matter, while prices in some pockets are adjusting downward, the median price in the County is still moving north due to a stronger high-end market. The median price year over year rose 9.9% to $861,000 for single family homes and a noted rise in condo prices of 7.7% from October 2006 to $527,500, telling us that sales currently are more volatile than prices. 

My approach is to never advise my clients to do anything that I wouldn't be doing. The fact is that in most cases, the properties that are priced well, in good condition, in a good location where a good or great school system exists - those properties are selling. If you don't want to be comparing every property to the one you missed out on, go for it. In another six months, I predict that we'll begin seeing more and more buyers on the playing field. If you are well positioned to make the purchase, go in with reasoning for your offer, wherever it may be, and do it now rather than waiting for the competition to change the rules of the game. Talk to me if you'd like to discuss further by emailing calling, texting or IMing. I can also connect you with my partner in lending to find out if you are qualified. ~ Jessica Bell

Buy Against the Herd    

The opportunity to move against the herd is in front of us right now.

Common sense tells us to buy when rates are low. Sounds reasonable, right? But let’s take that thought furtherand see where it leads.

If we accept that common sense tells us to buy when rates are low, then:

􀁾 Common sense tells us to buy when there are the most competitors because common sense by definition means that most everyone will arrive at the same conclusion.

􀁾 Common sense tells us that if we are to get the house we want, then we must outbid every competitor who is bidding on that house.

Remembering the principles of supply and demand, we know that this will drive the price higher. This must sound familiar to those who have been in the Bay Area real estate market over the past few years and who have routinely witnessed 10 to 15 offers on homes for sale.

Now that rates are higher relative to the last five years, common sense is that maybe buying right now is not such a great idea. If common sense is telling you to not buy now because rates are higher, then:

􀁾 Common sense is telling you not to buy when there are fewer competitors and less pressure for a house price to be bid up

􀁾 Common sense tells you to sit on the sidelines when it is a “buyer’s” market.

It seems that common sense leads one into taking actions that have them compete with the most bidders and to sit on the sidelines when there are fewer bidders.

Might it be better to buy when rates are high and there are fewer competitors? We always hear that it is more effective to not follow the herd and we see an excellent example of this in today’s higher interest rate market.

The borrower always has the option to refinance if rates drop. This gives buyers the opportunity to buy a house where there are fewer competitors and then to lower the costs later if rates decline.

Some buyers cannot afford or qualify for loans at the higher rate. This is good news for those buyers who can afford and can qualify. This is what it means to have fewer competitors. Some will choose to not buy because of higher rates and others will be forced out of the opportunity by the market mechanisms at work.

Talk with your Realtor® to get specific grounding about what is happening with properties in the area where you’d like to buy. Are the days on market increasing? Are there multiple offers or are properties selling to one offer?

Perhaps going against common sense will enrich you in ways you never expected.

If there was ever an opportunity to move against the herd, it is in front of us right now.

Ann Timoney, author

Here's an opportunity for you to read on and put what nuggets of information you are hearing in the media about the real estate market into perspective. Find out how these intertwined dynamics translate into vast opportunities for investors and qualified buyers. Stay tuned for how the Fed's decision to reduce the funds rate on the 18th will impact you and the housing market. If you are ready to discuss how these conditions can work for you or for guidance, don't hesitate to reach out.

Mortgage Mess The "mortgage mess," as the fallout has been dubbed, involves an array of folks who were involved in the decision making and execution of loan programs - flexibility of loans available, introductory and option payments and adjustable interest rates and minimum requirements to obtain a loan. Those involved include lenders, borrowers, investors and government agencies, all of whom are working to minimize what is still to come. Over $1 trillion loans will reset over the next year and a half and $112 billion in losses are estimated over the next six years. Foreclosures in California in July quadrupled compared with a year ago. In California, 39,013 households (1 in 333) received a notice in July that it was in some stage of foreclosure according to RealtyTrac.com. President Bush, in fear that the subprime mortgage issues will lead to further payment defaults and foreclosures, has outlined a new plan to assist and provide some relief to homeowners in jeopardy.

Foreclosures in California
California's foreclosures are up by 158%. Most of the foreclosures have been filed on homes bought between 2005-2006.  These buyers used little to no money down on adjustable rate mortgages. The problem now is that there is no equity, values continue to decline and adjustables rates have risen significantly, leaving owners upside-down, owing more money than their homes are worth. They have little hope of getting out without serious damage to their credit or huge debts. Unless their home can be sold before the foreclosure process, the property is destined for sale on the courthouse steps. For everybody else in that surrounding area, these foreclosed properties will push down the value of real estate, undermining buyer confidence, forcing sellers to wait out the market and edging out 50% or more of all real estate agents. Ouch! And if you or someone you know is facing an expiration on their initial interest rate, it is recommended that actions be taken immediately to ensure you are able to make payments at the new rate, refinance into a new loan or get out of the home.

Housing Inventory Let me summarize this one. Can you say selection? Take into account the issues with growing numbers of homeowners at risk of or losing their property and combine it with fewer qualifying buyers and you have a significant part of the market equation. Take a look at the chart's comparisons from the last three changing years - 2005 to 2007, including January, 2007 to the current month of September:  

Santa Clara County    1/2005    |    1/2006    |    1/2007    |    9/2007

Active Inventory              981          2,067            2,766           6,179

Inventory % Change                       111%             34%            123% 

Pending Sales                 1,644       1,485             1,183           1,118

Pending Sales % Change                 -10%             -20%            -5%

Think back to the last time you contributed your time and energy, (and I'm not referring to money) to doing something great for someone or something else. Can you remember the feeling you got being a part of a volunteer effort?

After coordinating a Community Clean Up this past weekend in my neighborhood of over 800 homes, the group of gracious and eager volunteers and I came up with a TOP TEN list of benefits to doing something within your own Community to make it a better place to live. And, I wanted to share this list with you...maybe it will inspire you too. There's got to be at least one benefit in there for everybody. Despite making only a dent, the team work and rewarding feeling at the end of the day gave me an extra bounce in my step.      

 Community Clean Up Top Ten:
10) You get stronger biceps from scrubbing graffiti.
9)   You get stronger abs from sweeping glass and junk.
8)   You get stronger legs from walking up and down the stairs carrying bags of garbage.
7)   You get to drink as much free Starbucks donated coffee.
6)   You get to use somebody else's materials, thanks to Home Depot's donations.
5)   You almost forget you are cleaning up somebody else's mess - almost .
4)   You get to live the childhood dream, getting dirty and playing in the rain.
3)   You get to work with and know your neighbors and your neighborhood better.
2)   You get to help maintain the value in our Community.
1)   You get to enjoy the fruits of your labor and your neighbors will thank you!

I'd like to invite you to share any additions you have to my top ten. There are far more than we put up there...

In the world of real estate purchases, buyers traditionally place a priority on criteria such as granite countertops, hardwood, designer paint, landscaped yards, etcetera for their dream home. Sensible buyers today are showing up with all of that and a whole lot more for their dream home that is not only better for the environment, but also better for their wallets.  California's Solar Initiative (CSI) is a newer program that places a focus on technologies that increase energy-efficiency and use of solar energy, offering rebates and other benefits to grow participation. California has set a goal to create 3,000 megawatts of new, solar-produced electricity by 2017 - moving the state toward a cleaner energy future and helping lower the cost of solar systems for consumers. CSI offers cash incentives on solar systems of up to $2.50 a watt. These incentives, combined with federal tax incentives, can cover up to 50 percent of the total cost of a solar system.  Through Governor Schwarzenegger's leadership, over one million new and existing homes are slated to have solar panel systems installed over the next 13 years as noted in his press release.  Another interesting note is that come 2008, builders offering new subdivisions with 25 or more units will be required to offer solar panel options.

In some cases, a solar system may not be justified if only looking for quick way to fill your your pocket, but appreciation of your home's value may be the nudge you need.  A solar system can pay for itself generally in ~ 10 years (+/-) with the rebates and savings on your bill, not to mention the cost of energy has historically increased year over year.  The clincher is that the National Appraisal Institute estimates that for every $1,000 saved in energy bills annually, a home or businesses value increases by $20,000.  Also check out compelling case study looking at the value of Solar.  In a seminar I attended yesterday, I picked up some key questions to determine the ease of installation and whether or not, solar systems are right for you.  Your answers should really help your solar installer to determine the viability.  If answered YES, solar may be right for you... Do you own your own home or office building?  Does your roof face E, W, or S?  Does your roof get full sun?  Is your electric bill greater than ~ $100?  Also consider the types of roof, the height of your roof and the space available for a system.  Working with an HOA should not be a problem.  Most companies will do this no sweat.  And if you are worried about approvals, your rights are protected under the Solar Rights Act.

Like most new technology, early adopters find themselves blazing the trails to find that the costs drop significantly only a short time after.  The rebates and incentives as well as the limited number of rebates and incentives are designed to reward early adopters of these programs.  For a listing of companies that perform installations and come recommended, send me an email.

Visitors...

You will be one of the first to land upon the brand new Homes In Tuscany Hills website @ www.HomesInTuscanyHills.com - a website designed with you in mind, in this case, readers, realtors and residents (current and prospective) of the Community of Tuscany Hills in California's Silicon Valley, County of Santa Clara, City of San Jose, Area of Blossom Valley.  Whew!  Home to (currently) 750+ units situated on Communications Hill, this Hill undoubtedly has so many unique qualities to offer it's residents from the rare find in San Jose - that is, lots of developable land among the rolling hills (relatively speaking for California) for growth, schools, future parks,  retail, walking trails, the landmark Grand Staircase and views galore from every angle.  Along with the vast History, Communications Hill promises strong futures for it's residents.  There is a growing spirit for Community and use of Smart Growth concepts for efficient high-density housing, used by the existing builders: Summerhill Homes, Pulte Homes and KB Homes to name a few.  This forward-looking design strategy takes those parcels of land that are somehow overlooked and underused in normal urbanization.  Infill development is largely different than many adjacent neighborhoods because of the building up, rather than sprawl, ranch-style homes that are built out.  Several schools of thought exist with those who are for and those against the infill development as a solution to rapidly growing populations. 

Part of a much larger picture, the existing Communities, new Communities, the retail, the Fire Station, the park and walking trails, the Grand Staircase and the schools will inevitably spread over the grassy land that has been on paper well before ground broke on the Hill, outlined in the City of San Jose's Specific Plan.  As sure as the sun will rise, with growth, so too come the pains but also the successes of change.  Many have experienced the excitement of hundreds of new families moving into their new townhome, condominium, attached single family home or detached single family home.  Others hope that there is an end to the construction in sight.  My hope is that homeowners and residents will help foster a sense of Community along the way, contributing positively and that great people will be attracted to what so many of us also saw for our futures.

Please feel free to share what you love about the Blossom Valley area and how you have made yourself at home here in Tuscany Hills!  Thanks for stopping by.  Come back often for updates or subscribe to receive emails when my blog is updated.