The Endowment Effect in Real Estate

The endowment effect is a human tendency to value something more when we own it. Last year, economist Richard Thaler even won the Nobel Prize for his work regarding this behavior. But how does the endowment effect in real estate manifest itself? First, let’s give a simple example of how the endowment effect works.  Let’s say a group of people … Read More

Why the “Shift” Happening in Our Market Isn’t What You Might Think

Shift happens.  But is our California real estate market shifting now too? There are all kinds of stories out there that seem to be saying that it is. Last week I was at a meeting with some big time Silicon Valley real estate brokers, and they agreed that the market has definitely changed. They said that multiple offers are history … Read More

Five Worst Home Improvements for the Money

Five Worst Home Improvement "Investments"

Now that more homeowners are looking to create housing wealth by way of the remodel, it bears mention that not all home improvements are created equal. True, some upgrades not only increase a home’s marketability and reduce selling time, but they return more that their cost in increased home value. These types of repairs are good in every way, and … Read More

Mortgages for More than just Spring Chickens

Spring Chickens

As all of the housing forces come together, rather strange results surface from time to time. The newest is relatively unprecedented, with Americans of retirement-age taking out long-term mortgages. To read an interesting article about never being too old for a mortgage, CLICK HERE. It wasn’t so long ago that Americans would work to pay off their homes, sell them, … Read More

The Incredible Shrinking Housing Market

The Incredible Shrinking Housing Market

Some new housing data was released, revealing the incredible shrinking housing market. For starters, 31% of all homes sold in Q2 of this year were either short sales or bank-owned foreclosure sales, which together are collectively known as “distressed sales”. The percentage of overall market activity that was distress-driven actually went up from 26% year-over-year, even thought the total number … Read More

Wise Words to Aid Home Buyers

Happy Buyers

Sometimes the reporting on the world of real estate gets so caught up in the rapidly changing landscape that the elements of buying and selling real estate that are most important for the public are not given the attention they deserve. Yesterday a great article in the San Jose Mercury News came out where a series of industry professionals gave … Read More

Silicon Valley Bucking the Trend

As the gloomy reports continue for the housing industry, there is one market where both high-end employment and housing are on an uptick. Thanks in no small part to a techno-renaissance, the Silicon Valley is presently enjoying one of the strongest housing markets in the nation. To check out a recent article from the NAR about Silicon Valley housing, CLICK … Read More

Future Value Behavior is Anyone’s Guess

Uncertainty Abounds

One of CNBC’s real estate reporters recently wrote an article discussing some recent conferences she attended along with other finance experts, where the future of housing and the economy was discussed at length. The verdict: nobody is still willing to stick their necks out and claim they know what is going to happen next. As best illustrated, statisticians deal with … Read More

New Year, Old Challenges for Santa Cruz Real Estate

What she doesn’t say is that there is a lean supply of homes because so many people are waiting for the market to turn around before they sell – and many many other people who would like to sell cannot, because they are effectively trapped in their homes which are “underwater” (that is, they owe more on the homes than they are worth). … It means that in the face of weak employment and stagnant incomes, when interest rates rise (as they are apparently rising now), the prices people will be able to pay for housing are going to drop – and that’s going to bring house prices right on down too. … Suffice it to say that while it may be true as the President says that there is a clear trend of lower unemployment – that trend could be easily reversed and, as the article I linked to notes, the drop in unemployment is largely due to the fact that 206,000 more people have given up looking for work and are no longer counted as unemployed. tealeaves.jpg I’ve sipped the last of my Earl Grey and I’m looking down at what’s left in my cup, and I’m trying to make sense of what I see there. … Our pre-tax payment will be considerably higher than that, of course – so I for one really hope they don’t pull the plug on the mortgage interest tax deduction – which could , of course, have a really deleterious effect on home prices depending on how it is implemented.

Zillow Giveth, Zillow Taketh Away

Zillow Logo

While searching for a blog topic, two reports spanning the good/bad news spectrum caught my eye, because Zillow.com had a hand in both. To check out a Zillow-backed report showing the relative strength of the South Bay housing market, CLICK HERE. To check out a different Zillow-cited report showing how home values and negative equity are still headed in the … Read More