The Truth about Overpricing your Bay Area home Click here to skip down to the charts and graphs for Santa Clara, Santa Cruz, and Monterey counties. Fair market value is that price a qualified, reasonably knowledgeable buyer is willing to pay, which a seller, not under duress, is willing to accept after the home has been properly exposed to the market. Many sellers, however, set a price higher than the market will bear – to their significant detriment. This article explores the dangers of overpricing your bay area home, with lots of facts, figures, charts, and statistics. Ironically, instead of getting more money… Over-pricing usually stigmatizes a property and reduces the eventual sale price to less than it would have been with more realistic pricing.”House Selling for Dummies Neither agents nor sellers determine market value: Only the market – willing and able buyers — determines market value. Agent and seller work together to create a plan which includes pricing, preparation and marketing — to maximize the conditions that reliably achieve the highest possible sales price. The vast majority of buyers will not make offers on homes they consider significantly overpriced. Either they don’t want to waste their time, or are uncomfortable with possibly “offending” the seller. In any case, they simply move on to other listings. Well-priced homes create a sense of urgency in the buyer/broker communities to act quickly with strong, clean offers, and often lead to competitive bidding between buyers – which is the most likely way to increase sales price. Overpricing wastes the … Read More
Santa Clara County R.E. Market Rebounds from COVID-19 Plunge Despite the ongoing health and economic crisis precipitated by COVID-19, the real estate market made a dramatic recovery from the steep declines in March and April. The median house sales price in Q2 was only a tad below its 2018 peak, and high-end homes, in particular, have seen extremely strong demand – this applies to virtually every market in the Bay Area. More affluent buyers – the demographic least affected by COVID-19, unemployment, and also having the greatest financial resources – have been jumping back into the market to a greater degree than other segments. The first chart below illustrates the big rebound in buyer demand, as the number of listings accepting offers in June 2020 rose higher on a year-over-year basis. Demand for luxury homes has soared in the last 2 months. Inventory started out low in the beginning of 2020, and remains well below the levels of last year. Three angles on house value trends: median sales price and average dollar per square foot by quarter, and then a longer-term perspective. The condo market has been softer than the house market, as measured by both sales activity and median sales price. This is a common dynamic around the Bay Area. Average days on market were quite low in Q2. The overbidding of asking prices has declined very dramatically from 2018, when Santa Clara County was probably the hottest market in the country. Median home prices by city or San Jose neighborhood, by bedroom count. The … Read More
Market Activity Soars after Early Spring Decline Recovering from the initial shelter-in-place drop in sales activity, Santa Cruz County has now jumped well above the highest points of the past 2 years. The first 2 charts below illustrate the big rebound in listings accepting offers in both the general residential market and the higher-price home segment. The Bay Area markets with the largest year-over-year increases in the number of listings accepting offers in June 2020 were the 4 outer Bay Area counties of Monterey (up 61%), Santa Cruz (58%), Sonoma (47%) and Napa (37%). They also have among the lowest population densities in the Bay Area. The more urban counties saw more modest y-o-y increases: San Francisco (6%) and Alameda (7%). The year began with a relatively low inventory of homes for sale, and though that number has been increasing, it is still well down year over year. The next 4 charts look at median home sales prices from a variety of angles. Remember that median sales prices are not perfect indicators of changes in fair market value: They can fluctuate due to a number of other factors as well. Average days on market were quite low in the last quarter, a common dynamic in Bay Area markets. The homes that sold went into contract relatively quickly. In Q2 2020, the average sales price was 2.5% below asking price. And interest rates hit another all-time low in early July, adding fuel to buyer demand.
The grim reality is setting in: COVID-19 isn’t going away any time soon. It’s clear now that this pandemic will be raging in California and the rest of the United States for at least the rest of 2020. But what if you need to sell your home during COVID? It’s the new normal – for now. And some thing may never be the same again. One of those things which may be changed forever is the way we sell homes. While selling a home during COVID does present its challenges, it also presents some unique opportunities – especially in the second half of 2020. Watch this presentation recorded July 2, 2020. All the market statistics cited in the presentation were as of that date. As will be clear from watching the video, it’s not only possible to sell your home during COVID, in some respects it’s a better time to sell your home than any time in recent memory. Watch the presentation and understand what makes this an exceptional time to sell your greater San Francisco Bay Area home.
There are many benefits that come with working from home. You don’t have to commute to an office, you can set your own hours, and you have minimal overhead to deal with if you are starting a business, to name a few. However, whether you are telecommuting part-time, full-time, or working as an entrepreneur, you need a space to call your own that allows you to work efficiently. And if you live in a small home, it can be challenging to create a workspace that helps you to separate your work and home life. But it’s possible! Here are some tips for putting together a home office in a small living space. Think about Your Needs First of all, what do you need from your home office? Consider the type of work you do and the equipment and space you will need to do it productively. Do you need a desktop, printer, shredder, multiple filing cabinets, and a brainstorming station? Or will a laptop, small desk, and chair suffice? Evaluating your needs will help you determine the location and layout of your workspace. Get Cash Even budget-friendly home offices require you to invest something, whether it’s in equipment, paint, decor, storage solutions, or any other number of items. Draw up a plan to see how much your workspace will cost, and if you don’t have the cash set aside for it, consider refinancing your mortgage. By refinancing a home, you will replace your existing mortgage with a new, larger one. The money left over will go … Read More
The real estate industry has always been a very human one. Successful REALTORS must gain an understanding of people to make their real estate dreams come true. It’s the sort of business that perhaps doesn’t appear to lend itself to technology – the combination of a firm handshake, an understanding ear and honest, bespoke advice is difficult to create out of zeroes and ones. But while the real estate industry isn’t one that is a slave to technology, it can certainly be enhanced by it. Modern tech can make the process of matching property with a buyer and make it even more human than it already is, by providing insights and avenues that improve the quality of the realtor/buyer connection. How can you leverage technology when selling real estate? Let’s take a look at four of the most effective ways. 1. Be everywhere on social media Social media is proving to be an incredibly valuable tool for REALTORS. A visual medium designed to facilitate connections, the likes of Facebook, LinkedIn, and Instagram are right in the sweet spot of real estate professionals. The value of social media will entirely depend on how well you use it. There are several mistakes that many realtors make, and some opportunities that tend to be missed. To maximize the effectiveness of social media: Know your niche and talk specifically to that audience. Give them a reason to follow you by offering value – post tips and tricks, share helpful articles, and give them a reason to laugh every once in a … Read More
While a global pandemic of a potentially lethal virus may be a challenging time to sell your home, there are creative ways to do it without compromising safety. From cleaning between showings to using technology to connect with potential buyers, there are plenty of options for home sellers—despite being in the midst of a health crisis. The importance of staging A crucial piece of selling a home is staging, and often, sellers turn to professionals for help. Right now, it’s difficult and could be risky to invite a staging company into your home, but luckily, there’s technology that can help stage your home. Virtual staging has traditionally been a great option for people who have very little furniture in their home. Rather than dragging in new couches, beds, and tables, virtual staging can allow you to drag-and-drop furniture into a room, digitally. The cost is typically much lower than traditional physical staging companies, and allows for endless arrangement possibilities without the challenge of finding new furniture and heavy lifting. It’s a great option to consider during the COVID-19 pandemic – in fact, it may be your only option as some counties in California still do not allow traditional stagers to do their work in your home. Make the most of technology When it’s not feasible to show your home in person, you can also turn to online tools. One great option for a no-contact showing is a video-chat tour, which is a win-win for both parties. This method ensures no contact for the buyer and seller, … Read More
With the global COVID-19 pandemic, many people have suffered reduced income – for many, income has gone down to zero. The response from the U.S. Government has been substantial, and the CARES Act, enacted in March of 2020, provides relief for many taxpayers. The CARES Act also provides for COVID-19 mortgage forbearance for many borrowers, and we will explore how that works in this article. Please bear in mind that this is a very fluid situation. COVID-19 mortgage forbearance is new, and it’s rapidly evolving. What is true today may not be true tomorrow. Update May 19, 2020: the rules have changed in favor of those receiving forbearance. This article (and video) mention that conventional loan borrowers need 12 months in a row without a missed or late payment. The new guidelines say that if you have been in forbearance but have made at least 3 on-time payments since exiting forbearance, you can then refinance your mortgage or get a new one. See this article on CNBC. COVID-19 Mortgage Forbearance Presentation Video What is Mortgage Forbearance? Mortgage Forbearance is a temporary freeze on your mortgage payments. Your Loan Servicer Must Agree to the Forbearance. A Servicer is the Bank/Lender/Company that collects loan payments. What does Forbearance mean under the CARES Act? Borrowers are entitled to a temporary freeze of mortgage payments up to 180 Days – if you say have been impacted by COVID-19. No documentation is required to prove you have been impacted. Please know that many servicers will only initially offer you 90 days … Read More
It’s that time of year again! Early in the year, inventory is low – but there’s no shortage of eager buyers looking to purchase a home. While an imbalance of supply versus demand is not uncommon in the greater San Francisco Bay Area, it’s especially acute early in 2020. New inventory is trickling onto the market, and it will continue to ramp up as we get into spring. But at the moment, there’s nowhere near enough new inventory to meet demand. Sellers with well-priced homes across the region are being rewarded with multiple offers from prospective purchasers. That is of course a wonderful situation for a seller – but it’s more like a nightmare for buyers. Many of these buyers will have been looking for months, even years, before they finally put an offer in on a property…only to find out that the seller has a number of competing offers to choose from. A buyer never knows how a seller will respond in a multiple offer situation. Will they accept just one offer from the “best” buyer? Will they make counter offers to specific buyers? Will they ask all buyers to respond with their “highest and best” offer, knowing that there are multiple offers on the table? What’s more, a seller can make different counter offers to different buyers, with different prices and terms. I’m helping clients manage a few multiple-offer situations at the moment, as listing agent and as buyer’s agent. Working with buyers in a multiple offer situation is especially fraught, because of course, … Read More
As you may have heard, I recently became a Broker Associate with Compass in Los Gatos (the former Alain Pinel REALTORS). There are a lot of benefits to working with a large, upscale brokerage – one of them being that you can get access to valuable information before the competition. Yesterday, our office had the first meeting of the year and it featured a feature presentation by Jordan Levine, the Deputy Chief Economist for the California Association of REALTORS. I have also seen many presentations by Jordan’s boss, Leslie Appleton-Young, and I even had her as a guest on an episode of the Bay to Bay Podcast. Jordan, by the way, is also a podcaster as he is the co-host of California Association of REALTORS Housing Matters podcast. Video of California Real Estate Forecast for 2020 The presentation was about 40 minutes long, as there was a lot to digest in there. The bottom line is that the 2020 real estate market is expected to look a lot like the 2019 real estate market: tight inventory, low interest rates, poor affordability, but with slightly more sales at somewhat higher prices (statewide, but the greater Bay Area should be an exception). Key Points for California’s 2020 Real Estate Forecast Housing prices may be up, but actual mortgage payments are down Lowest Unemployment in 50 Years Prices at the very high end softening, lower priced homes rising in price. Higher-end homes taking longer to sell U.S. 2020 GDP Projected @ 1.6% (down from 2.2% in 2019) U.S. Inflation … Read More