Median List price for San Jose 95129

How’s the Cupertino real estate market right now? Let’s start with the most basic window into conditions: supply and demand. (This graph and more info comes from my Cupertino Real Estate Report. Please click on the link for much more data and information – with statistics and trends dating back many years. Also you will find reports which are monthly, quarterly and annually generated. Finally, there’s a “property analysis” tab which enables you to check sales – and see images – around any Cupertino address. Please allow the analysis tab to do its slow load – it’s worth it – enjoy!)

Cupertino Real Estate Supply and Demand

Cupertino Real Estate Market Barometer of Supply and Demand

The realty market barometer is going through the roof!  This implies that it’s very easy for Cupertino home sellers to get their properties into contract and to the closing table, that it is a hot seller’s market in Cupertino.  Please note the darkest line reflects housing inventory – and it’s been plummeting for months.  (Look at each year for October through December and you will note that the pattern is seasonal – but the actual number of homes available does vary considerably.)  Now please note the pale gray line, which indicates the number of homes selling and closing escrow.  The bigger the gap between these lines, the more choices buyers have, and the narrower the gap, the fewer.  Right now, for the first time covered by the chart above, these lines have met, meaning that homes are selling at the same rate that they are coming on the market.  When supply matches or outpaces demand, prices nearly always rise.

But what about home prices in Cupertino?

Here’s a look at the numbers, in brief, as reported with closed sales in December 2011.  Surprisingly, although the market appears to be very hot, prices don’t seem to reflect that – perhaps “yet”.  The median sales price of houses in Cupertino are off significantly from both the month prior and the year prior, and the average sales price is down a little. The number of sales is off a little and the list price to sales price is off some too (both year over year and month over month). Meanwhile, the days on market are growing pretty steadily.

What’s happening? Why this contradiction between the market barometer and pricing?   First, the days on market reflect the inventory which recently sold, not the inventory which is available today.  This tells us that many homes that have been on the market awhile are now being purchased. (Probably others went off the market for the holidays, which is typical for the season.) (more…)

Many Silicon Valley home buyers rely on PMI, or Private Mortgage Insurance, to purchase a house or condo. But what is it and who needs it?

Private mortgage insurance is usually required with loans in which the buyer has less than a 20% down payment.

PMI does not protect you, the residential real estate consumer. It protects your lender in case you default!

FHA loans don’t have PMI but instead there is a “government guarantee” and for that you pay a premium – so not called PMI but it works similarly. The cost may range from 1 – 2.5%.

FHA or Conventional with PMI?

If you have less than 5% down, FHA will be your only option. But between 5 and 20% down, you may choose.

If you are trying to decide between FHA and conventional loan products with PMI, talk to you mortgage broker or banker to see which one really costs more in the long run, factoring in the total package of interest rates, premium rate etc. (FHA loans may come at a lower interest rate but with other added costs – so don’t just compare interest rates.)  The result may depend on the loan to value of the property, your credit score, and other factors. There don’t seem to be any “easy answers” as to which one is necessarily better.  This decision will require a little research!

If you expect to be bidding in multiple offers, this is another consideration too – it can be very hard for home buyers in the South Bay to win out in multiples if they are using FHA financing (as opposed to conventional).

Finally, like HOA dues, PMI is not something you can usually deduct from your income taxes (unless the PMI cost was simply rolled into your interest rate).  Please talk to your lender and tax professional for more information on PMI and the tax ramifications.

Related reading:

Is your lender pushing you into an FHA loan?

The challenge of being an FHA home buyer in a seller’s market

First Time Home Buyer with FHA Financing? Make Sure That Your Offer is Well Drafted!

For several years, we’ve seen declining residential real estate prices in much of Silicon Valley.  In many areas, though, prices are now either flat or bouncing up and down within a small range such that the probable buyer’s value or market value is very close to where it was a year or two ago.  Today’s San Jose Mercury News reports

“In a report to be released Monday, Clear Capital, a real estate valuations company in Truckee, predicts that prices will remain almost flat this year — compared with a 4.7 percent drop in 2011 — in the San Francisco-Oakland-Fremont metropolitan area, including Contra Costa County. Silicon Valley should see a 1.6 percent increase in home prices, compared with a 2.5 percent drop last year, the company said.” (Bolding mine.)

A small, modest increase in pricing is usually healthy for home sales as it gives buyers the confidence needed to finally take the plunge. It’s immensely challenging for people to buy when they believe any product – cards, home appliances or houses – will be cheaper in a day, a week or a month.

Home sellers who have wanted to move up from a starter home to the one they hope to spend decades in have felt somewhat trapped by lack of equity in many cases.  In others, the idea of selling for less than at the peak was so upsetting that they felt terrible about moving ahead prior to a full recovery.  Most now understand that getting back to prices at the peak of the realty market in San Jose and Santa Clara County will take many years.

Some of them are tired of waiting and are electing to forget about the profit they could have had if they’d sold at the peak.  These folks have decided to make the jump now to get on with their lives, despite less equity than hoped for initially, while at least interest rates are so favorable.  (It should be added that the move-up home will now cost less also!)  This can be a very wise decision since buying a house, townhouse or condo is usually not one purchase but two: you’re buying the loan product also and the total cost of home ownership should factor in both the costs over the lifetime of the loan as well as the purchase price. (more…)

Some Silicon Valley home buyers do not want to have their own buyers agent, but instead expect that they can find properties in the San Jose area that they want to see and request that the listing agent show it to them in a private appointment.  These same potential buyers may be surprised that the listing agent may refuse to show them the listing outside of a regularly scheduled open house – that is, if the seller is permitting open houses.

What’s going on?

In earlier articles we’ve discussed the need for a buyer broker agreement (verbal at the least, but possibly in writing) and why you, as a buyer, ought to have your own representation at the negotiation table.  (If you missed these, see the links under “related reading” below.)   Today I want to dispel the myth that the listing agent is required to open up and show condos or houses for sale to anyone who calls and requests seeing them and explain why that’s the case.

Showings of homes for sale are determined by the listing agreement or contract between the home seller, the listing agent or Realtor and the broker

The most important thing for buyers to understand is that the accessibility of the home for viewings depends upon the agreement, verbally or in writing, between the owner of the property and the agent/brokerage hired to market, negotiate, and sell the real estate.   It’s not an “on demand” situation where an interested buyer can insist on seeing the property as desired. Here are some of the expected scenarios and reasons why showings are somewhat restricted most of the time: (more…)

Should you market your home for sale through the holidays?  It’s now mid November, and if your property has been listed for sale but not gotten an acceptable purchase offer, you may be thinking of taking your house or condo off the market until sometime in the new year. Is that a good idea?  Below, please find some considerations for you as you decide what to do. We’ll

Pricing: will the home sell for more now, or in the new year or spring?

No one can tell you whether prices will be better or worse in the first quarter of 2012 than they are now.  I just returned from the annual conference for the National Association of Realtors (of which I am a member), and quite honestly, I got conflicting information.  Some reports indicate that prices will be lower in the spring, others that they will be higher – or interest rates may be higher, which puts pressure on pricing since affordability is strained when that happens.   Pricing is local, though – so no matter what’s happening nationwide, it could be different in Silicon Valley, in Almaden, Cambrian, or Los Gatos, or in your subdivision or school area.  But bottom line: we really don’t know what pricing will do, we only know the probable buyer’s value – a range of likely sales prices – right now.

Being disturbed during the holidays

Many home owners really don’t want a lot of traffic coming through the home from Thanksgiving through the New Year due to visiting relatives, events planned such as parties at the home, the presence of gifts and concerns over theft, etc.  They may also be worried about rainy weather and carpets getting soiled.

At the same time, though, during the holidays many of us make our homes warm, bright and inviting, particularly if we decorate for Christmas, Thanksgiving, Hanukkah, etc.  Even the smells can do wonders: gingerbread cookies, Christmas trees, hot mulled wine…. With family and friends coming to visit, we tend to “deck the halls” and make our houses really feel like homes.  For many condos, townhouses and houses, during the holidays these homes really show at their best. (more…)

Each year, Inman News sponsors a “people’s choice” voting for the most influential person in real estate.  Inman nominates 100 strong candidates but voters may also write in someone not listed.  This week, I was very deeply honored to have been included on such a prestigious list of real estate leaders nationwide, and I’d be thrilled if you would consider voting for me.

Where to vote:  follow this link and the fields for entering your desired winner’s name and info will be about 20% of the way down (midway through the article and just after a large ad) – deadline is Dec 1, 2011:

http://www.inman.com/news/2011/11/2/2011-peoples-choice-real-estates-most-influential

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