Okay, so in looking at it, yes, the nation’s economic news did nothing for our wallets this week. Many of us are still sobbing over our investment portfolios. But as you can see, real estate has remained pretty stable in the face of the negative news on Wall Street. Overall I think buyers are starting to get the idea that it may just be time to get into the housing market and sitting on the sidelines may cost them plenty—in terms of higher prices, higher interest rates and less inventory—in the long run.
Our nation’s financial system is in the midst of a massive shakeup, caused largely by this decade’s housing correction. Between 2002 and 2006, household borrowing grew at an average annual rage of 11%, far outpacing overall economic growth. Borrowing by financial institutions grew by a 10% annualized rate. Now many of those borrowers can’t pay back the loans, a problem that is exacerbated by the collapse in housing prices. They need to reduce their dependence on borrowed money, a painful and drawn-out process that can choke off credit and economic growth.
Waiting for the bright spot? Keep reading. There’s no question, the result of foreclosures have drastically hindered our median sales price in many of the Valley's markets, but real estate is a strong, long-term investment and as long as consumers keep that in mind, they can prevail in today’s market.
Anyway..things are looking pretty bright for Silicon Valley real estate. Our Cupertino DeAnza office is seeing things picking up and there was a lot of optimism at the sales meeting. Los Altos First Street office reports that buyers are still lining up for a few select properties. There was a very nicely redone and staged Cupertino townhome listed at $588,000. The listing had 14 offers and sold in the mid $600,000s. We saw a number of multiple offers this week, almost all were on REO properties....one low priced listing had 70 offers!
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