New Agents

Last week, I was contacted by a young woman who lives in Old Orchard, an area that I contact regularly with mailings about the market. She had recently passed her real estate license test and wanted advice on how to get started. I remember from many years ago that schools such as Chamberlain and Anthony's prepare a future Realtor to take the State exam, but provide no direction beyond that. The basis college classes are not much better preparation for the actual world of real estate sales.
She came into my office and we talked for some time about time management, juggling a home, young children, and this business.(Been there, done that) Then she spoke to Nina, my manager about training and costs.
Coincidentally, My grandson is in his last year of a business degree, and is also seriously considering a sales career. I plan to mentor him as he begins.
With an aging Realtor community (see my post:Real Estate Agents are Aging:Saturday, November 13, 2010), it is a pleasure to have young people choosing what can be a challenging but potentially lucrative business.

Balancing Work, Play and Volunteering

August should be a month for vacations, but having been away for more than a week in late June, I am playing "catch up" at the office, and fitting in a few added demands on my time.
Thousands of local Realtors are taking part in a lock box and key exchange this week, along with the juggling involved in making this happen smoothly. As expected, there are glitches in the system, even though both boxes and keys were Beta tested. This morning, I lugged seven extremely heavy lock boxes to a well-coordinated exchange at DeAnza College, and carried out a set of even heavier replacements. I also picked up a new key that will need to be used while the stragglers replace their old boxes, hopefully within a month. The exciting part of all this is that eventually, when all the bugs are worked out, my Android phone will...at long last...serve to open the boxes when I show property.
Next week begins the volunteering segment. Our office is holding a breakfast and auction to benefit Habitat for Humanity, and I'll help out as sous-chef, runner and dishwasher. This is just the first of several events we have planned.
So when do I manage to play?...Whenever I can.

Summer Real Estate Market

The Bay Area housing market usually picks up in March, April and May and then slows down over the summer for vacations, graduations, weddings and other activities. But this year it seems like that’s being reversed.
After a rather slow spring, the local housing market has been heating up this summer with strong sales in June and even into July in many areas. Sales activity has been especially busy in the higher end of our markets, which is over $1 million in much of the Bay Area...but even the mid-level market was surprisingly active
There is an interesting trend in last month’s sales figures: In most of the Bay Area, we had the highest level of million-dollar home sales since the summer of 2008, just before our economy went into a tailspin.
Certainly, the Bay Area’s relatively strong economy...especially in the tech sector... ­is playing a key role in our housing market. Inman News wrote in a Friday article, “Tech is back -- and tiptoeing along behind it, at least by some measures, is the San Francisco-area real estate market.”
This doesn't mean that the housing market is completely out of the woods, because real estate is very much a local business. While many of our markets are on the mend, others are still softer than they were a few years ago, and there are still distressed properties coming on the market as bank owned REO sales in the months ahead.
With the national and state economies still fragile, we are fortunate to live and work where we do. Limited housing stock, a diverse job base and great weather are all factors that help home buyers focus on these terrific home values and low mortgage rates.
The best homes are getting lots of offers, and in our Cupertino office, the majority of sales are with multiple offers. Seems like we are having a delayed spring.

A Tale of Two Transfers

When I returned from Michigan, I was contacted by two families transferring from out of state to Silicon Valley. The first referral was through a company I had worked with before. Their new CFO, his wife and son, were moving from the Midwest and needed a house rental. In a normal market, a 2500 square foot house in a good school district would be easy to find, especially for stable family willing to pay up to $5000 a month. After talking to a few reliable rental agents I know, I discovered that not only is the local rental market tight, a good rental house of that size is nearly nonexistent. With new jobs come new problems, and the search continues.
The second challenge is a small family from Colorado. The husband is already here, and has begun a high paying job. He is renting a condo in Santa Clara for $2500 a month, and their quandary is: Do they give up the large house they love...only 12 years old, in an excellent school district, with a large yard and valued at $400,000...and buy something here for more than double that price and with fewer amenities? Or does that family remain divided, and perhaps invest in a condo so that the husband can move out of the rental? I have my in-house lender working with them on qualification, but neither solution sounds perfect.

Back from Michigan

What a contrast from the real estate market in California! I expected to see depressed areas in Detroit, and although the bus tour drove through the best sections of the city, the tour guide admitted that a large percentage of the city's residents had left the city along with the jobs. Even in these tree-lined streets of beautiful homes, values had dropped by nearly half, and we passed occasional houses with boarded up windows and for sale signs in their front lawns.
We were there at the beginning of the River Walk celebration at the Renaissance Center, and the families enjoying the water views, lunching on ribs, and listening to music had a positive attitude that a down economy couldn't erase. We were there for a convention, and people saw from my badge that I was from California. More than one person stopped me and said to tell folks back home that they haven't given up and still love their city.

Let's Take a Look at the Local Market

Now, more than ever, I'm reminded of how much real estate is about location, location, location. Things are far better here in the Bay Area than nationally. The overall market is much more stable than elsewhere in the country, and in some ares, it’s fairly robust. We continue to have multiple offers in all our offices. Not every property certainly, and not all multiple offers are well over the asking price. But there is a strong indication of Bay Area buyer demand that most of the nation is not experiencing today. We hear different variations on a common theme from our local Coldwell Banker offices: “It seems I get one of two results; either a few multiple offers within first 7 to 10 days, or I’m getting a price reduction 30 days later.” Thoughtful and strategic pricing, combined with staging interior and exterior of property are key elements to having the best chance at multiple offers....no surprise there.
The momentum seems to be slowing a bit in Cupertino. The best properties are still getting lots of attention, but there is less of a sense of urgency for the majority of the market as inventory continues to increase. The market is doing particularly well in the good school districts and in single-family homes, while condo sales remain slow.
We are continuing to see a high influx of buyers coming from the Pacific Rim with large down payments looking for good schools. There is still a lack of good inventory for buyers, especially in the entry-level markets. Palo Alto remains an extremely strong market with multiple offers in excess of 10% to 20% over list price, in many cases.
The bottom line... when a well-priced, beautifully stage listing comes on the market, it can probably expect multiple offers.

Real Estate Headlines Can Be Deceiving

At this morning's office meeting, we had several hand-outs. The headlines from various newspapers ran the gamut from "Good News in the Real Estate Market" to "Is This the Beginning of Another Bubble?" and everything in between.
I was amazed at the attention the Case-Schiller housing study received last week. It covers only 20 markets, and that is just one of its many flaws. Yet many consider it “the be-all-and-end-all” economic indicator that defines our entire national housing picture. As we know, all real estate is local, and it is unfortunate that the reporting on a 20-city “national” index can have such a jarring impact on otherwise rational people.
Look at some of the headlines the other day:
“Home prices at lowest point since 2006 bust”
“Home values continue downward churn”
“No relief in sight’ for falling home prices”
And even in paradise – Maui- the front page headline in the paper screamed “Crash Spreads.” And Maui isn’t one of the 20 markets. In fact the nearest market covered is San Diego, a mere 2500 miles away!
For those who don't panic at any change in the wind, this can be the smartest time to buy a home if you have the lifestyle reason, financial stability and viability to do so.
You might just be surprised that the end of the world isn’t here yet … at least until next month’s report.