Now is a great time to buy a home in Silicon Valley: interest rates are incredibly low (and clearly will not stay that way forever – they never do!). Depending on your desired or required price range and area, the market varies in terms of how much of a bargain you can get. Please understand that buyers are not 100% in charge, though, and sellers are not “giving away” their homes.
Recently I saw a buyer request for a Cambrian Park home. The buyer in question wanted a 3 bed, 2 bath home in the 95124 area with the very best schools. So far, so good. The buyer expected to pay between $200,000 and $500,000 for this home – and unfortunately, that is just not terribly realistic. What he or she wants may be close to $550,000 but if the home is on a standard lot (not a patio home) in good shape, and has no issues (no high voltage lines, no busy road, no converted garage), it wil not be less than $500,000, even if it’s a bank owned property.
In Los Gatos, it is very unlikely to get a good 3 or 4 bedroom, 2 bath home “in the schools” for less than $1,350,000 unless there are issues such as deferred maintenance, bad neighbors, weird floorplan, remodeling needed, busy road, backs to something undesireable, etc. A really fixed up, turnkey home will probably cost close to 1.4 or 1.5 million if it’s “in the schools”.
In Saratoga, it’s unlikely to get that same home for less than $1,400,000.
You get the idea.
Buyers often hear that “it’s a buyer’s market” and they mistakenly think that homes are selling for 40% off the peak (which IS true in east San Jose, but is not true in Monte Sereno, Cupertino, etc.). It’s very, very important to look at the local data, on the local market, factoring in things like school districts, zip codes, exact location, lot size, condition, degree of remodeling etc.
Frustration ensues when buyers believe or expect that they can get homes for much less than market value (which is low already).
It is even worse in the far lower price ranges, where appraisals may come in low or banks may demand a different sales price (depending on what side of the transaction they’re on). In those arenas, buyers have even less control – they and the sellers may agree, only to have the involved bank veto the sale.
So here’s my advice of the day: do research, read about the market and ASK your trusted agent about pricing, valuation, and sales in your budget range and desired areas. Do not presume to go in telling everyone what you’re going to pay and what you’re going to get for it. It really doesn’t work that way, and the best agent in the world cannot control the market to that extent. Being unrealistic will nto help you to get the home you want. A good Realtor can help you to assess the market and to make the most of it. If you hire well, and choose an agent whom you trust, get the info and decide from there. This is not a cowboy’s market.