For Santa Clara – San Mateo – South Alameda – Santa Cruz Counties.
2012 saw a continuation of 3 major trends which began in mid 2012:
1. A RAPID INCREASE IN SALES PRICES:
o. As always, Up and Down movements start at the low end of the market and rise or fall till they include the whole price range.
o. Typically this is over a 2 to 3 year period, after which prices settle down to a 3 to 5% annual increase till the next Boom or Bust. This places us about half way through the current upward stage of the cycle.
2. MAJOR REDUCTIONS IN SHORT SALES & FORECLOSURE.
o. This is mainly due to banks finally co-operating with the Federal Government sponsored Loan Modification programs i.e. HARP, HAMP, and HAFA. These programs are also allowing many current homeowners to refinance into much lower payments even when there is little or no equity in the home.
3. LARGE INCREASE IN NUMBER OF QUALIFIED BUYERS:
o. First time Buyers who thought they were priced out of the market in 2008 now find the reduced prices and Tax benefits make owning cheaper than renting, and are jumping on the home ownership wagon.
o. Multiple Federal Government supported low/no down payment loans i.e. FHA, V/A etc.
o. Multiple great 1st Time Buyer programs from the IRS (MCC), plus Santa Clara County, (MAP), and San Mateo County (HEART) 3% down payment programs.
o. A flood of Investors, both domestic and foreign, who see California Real Estate as a great investment when compared to more traditional options.
HOW MIGHT THIS SITUATION AFFECT YOU.
1. MOVING UP? (New baby, bigger house, better school district etc).
o. Excellent time in most situations. Get top dollar for your current home in strong Sellers Market, and a good deal buying into a more expensive property where it’s still more of a Buyer’s Market.
2. MOVING DOWN? (Kids all grown and gone, retirement, want smaller but closer to Grand children etc).
o. Good possibility of top dollar for current home in strong Sellers Market, and getting a good deal buying outside our market area where prices are seeing little if any improvement i.e. anywhere other than the Bay Area.
3. STAYING HERE? (No reason to move).
o. Nice to see home equity growing again. Get refinanced as soon as possible. Call for advice if needed.