Buying homes in Silicon Valley during a “buyer’s market” takes courage. Doom and gloom grace the cover of the newspaper and online articles. Everyone has a bad story to share about someone else who lost a home, or had a bad experience trying to buy a short sale or distressed property. Perhaps most of all, at work or in social circles, friends and coworkers will advise you “if you wait, you will get it for less”.
This is what always happens in a buyer’s market. Folks who are themselves afraid of taking the plunge talk loudly about why buying a home in San Jose, Campbell, Monte Sereno or nearby is not a good idea right now.
When would all of these people say is the “right time to buy”?
Everyone wants to buy low and sell high, whether it’s in the stock market or in real estate. Timing the exact bottom or exact top is impossible. In fact, we only know we’ve hit it once it’s past. Once the bottom has been identified by the populus, guess what? All the fence sitters jump in. Demand rises faster than supply. Prices go up.
Now may or may not be the right time for you to buy. It may not be the right time to buy certain types of homes in certain areas. An example that comes to mind of what NOT to buy is in parts of the distressed market. Buying in areas & pricepoints where foreclosures are rising would not be my professional advice to anyone. As those numbers swell, prices will be pushed down.
But there are many healthy markets and pricepoints where there’s simply a soft spot in the zone where you want to buy. In recent days I’ve looked at the condo and townhouse market in several upscale parts of the valley such as Los Gatos, Saratoga, and Almaden Valley. For some reason, townhomes and condominiums in these lovely areas are taking a bit of a beating right now compared to the single family home market. This appears to be a nice buying opportunity. Real estate in these west valley neighborhoods is usually beyond reach for many people. Right now, though, you may be able to get your foot in the door.
Additionally, there are some markets in which single family homes are selling very well (especially in Palo Alto, Sunnyvale, Mountain View). For Silicon Valley seniors who’d like to downsize, this may be an ideal market. Sell the home in a strong market, buy the retirement condo in a buyer’s market. What more could you want?
It is also a very good time for buyers who are bringing their money in from Europe as the exchange rate makes a home buy anywhere in the US a great bargain. This is even more true if one is a renter now, as rents are going up!
There are no easy answers as to when the best time is to buy or sell for everyone, because each person and each market is unique. Your individual circumstances, from your available savings and credit report to your job situation, will have a huge impact on how the market looks to you. That said, the current market presents great opportunities to the saavy consumer who’s willing to study and weigh the precise market situation that they are in as buyers or as sellers. Rather than sitting on the fence because that’s what most everyone seems to be doing, it might be the perfect time to plunge in. Only with a little research will you know if this is what’s best for you and your financial future.
When you hear the easy answers, whether it’s “buy now!” or “sell now!”, know that Silicon Valley real estate never has been so simplistic as to warrant a one-size-fits-all answer. Get good data and good counseling to make a good decision.