We heard it every day. The housing market is depressed; prices are dropping; houses are languishing on the market for weeks or even months on end. And that is true, somewhere. But not here!! Our local market is thriving! After the usual slowdown over November and December and part way into January, the buyers have come back with a vengeance. Our problem is that there are not enough listings to satisfy the demand. Multiple offers continue to be the norm rather than the exception, and prices continue to rise, albeit more slowly than during the past two years. Here are 2 case examples:
- 1. Recently I listed a home in a very good area of Palo Alto. It was a beautiful home, about 15 years old, but not perfect. It was on a busy street and one of the 3 bedrooms had been converted to an office. A family with children who might want to buy the home because it was close to a very good school might balk at the busy street or the price tag to reconvert the office back into a bedroom. The list price was set to conform to the most recent comps in that neighborhood and here is what happened: Open houses were swamped. The phone rang off the hook and agents were calling to ask if they could submit pre emptive offers (prior to the set offer date.) The sellers decided that pre emptive offers would be fine…. but set the minimum bid price at $200,000 over the list price. This was done on very short notice, but the sellers still received 3 pre emptive offers and the house sold even higher than the pre emptive entry price.
- 2. I also recently listed a total fixer upper in an area in Mountain View that is popular with first time buyers. The homes tend to be modest and range from 1150 to about 1650 sq. ft. max. Most are in the 1150-1250 sq. ft. range. This particular home had been a rental and the tenants were very hard on the home. The floors and doors were damaged. The roof was leaking, as was the bathroom shower. Everything was original… the kitchen, the bathrooms, the windows. And there was an apartment building immediately behind the home. We listed about $100,000 less than a fully renovated home might sell for (with new kitchen and granite counters, new bathrooms, new windows and doors, new fences, and new roof). The property was entered into the MLS about 8 PM on a Friday night and by 3PM the next afternoon we already had 3 very good offers! Contract is signed even before most buyers are aware of the listing!!
This is not to say that the market is great everywhere, even on the peninsula. There are micro markets, with some “hot” areas and others that are languishing. There are some good opportunities out there for investors, but you have to be very patient and be willing to move fast when the right opportunity comes along. But for home buyers it is a different story. If you want to buy the house you love, you must be right on top of the market. It is very demanding and very time consuming. And a bit confusing. There are a lot of decisions to make in a very short amount of time. You need to start early to look at homes early in the process and then follow through to see what they sold for. My advice: pick up a flyer at every home you visit and make notes. At the end of the day, file the flyers and your notes in a 3 ring notebook. You can use dividers to separate the “dream homes” from the “dogs” or the “Ho-Hums.” Do it any way you like but be sure to follow through to find out what each one sells for. Your agent should help you with this.
Hopefully you will select a local agent who knows the particular area or areas you are familiar with. OR if you are researching a couple of areas (maybe mid peninsula and San Francisco) give your agent the option to partner up with another agent in the second area you are looking in. I do this all the time. We will make some sort of arrangement where we will both get compensated regardless of where you decide to purchase. That way both agents will stay motivated and work towards your best interests, knowing that their time will not be wasted. There is nothing worse than working like crazy for a client only to find out, too late, that they have also been looking in another area with another agent behind your back.
But enough of that. Let’s get back to the first paragraph. The bottom line is that you can’t believe everything you read in the newspapers. What is true in another area may or may not be true here. If county wide statistics are being used, they may not reflect the reality in your micro market. If in doubt, go to a professional, and experienced agent who sells enough homes to really know what is going on, one that has an impeccable reputation (ask for references) and ask them. In my books, a good agent is an honest agent and they will know more about what is going on than anybody. I honestly believe that part of the reason for our shortage of listings is because homeowners have been led to believe that the market is slow and they won’t be able to sell their home for the price they want. The truth is they can probably do better!! |
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