It is perplexing and frustrating to continue to see news reports with
people who could be considered little more than “real estate pundits”
talk about only one side of the current real estate story. This week,
the controversial stock market analyst Jim Cramer of Mad Money told
viewers of The Today Show that “If you buy a home now, you will
lose money." He went on to add "there is no money and no programs
for first time home buyers. Down payment money is the biggest issue
in the market, because young people don't have any." Housing is
a good long-term investment – it’s not a day-trading activity.
As we witness the steep increase in foreclosures among housing boom
“flippers” who secured sub-prime, adjustable rate loans with
no money down, we see the folly of playing the housing market like the
stock market.
Homes are not stocks. Most people stay in their home for about 6 years
– they buy for the long haul to create a home for their family,
not to buy, then turn around and sell six months later. Owning a home
isn’t just about investment, although that’s certainly important.
It’s also about building community, a place of your own, and having
a part of the American Dream. For people who want to buy a home to live
in, this is truly a great time to buy a home. In some areas there may
be more to choose from, mortgage rates are historically low and the
economy is strong. There are some investor opportunities out there as
well, but it’s important to remember that the criteria regarding
these buying decisions are different between the investor and the homeowner.
In our area we have seen steady appreciation in home values over the
last 30 years. Regarding the median prices in many parts of the Bay
Area and Silicon Valley, most specifically in San Francisco and the
Peninsula, properties are not only holding steady, but actually increasing.
The case could easily be made that waiting for prices to drop may make
the realization of home ownership steadily more difficult. Signs aren’t
pointing to bargain basement pricing ever becoming the norm in our markets,
though price is now, as always, an important consideration. Smart buyers
are buying. Smart sellers are selling.
Witness the number of buyers visiting our more than 600 homes held
open last week. A Berkley listing was seen by almost 100 visitors. A
Walnut Creek listing received four offers and sold for three percent
over the current asking price. In San Mateo Park, a home received five
offers and the lowest down payment among them was 50 percent. Palo Alto
continues to report 100 percent multiple offers. One San Francisco office
notes that the $2 million-plus market is “on fire.” The upper
end markets are clearly not sending a negative message – in fact,
quite the opposite. Last week San Francisco Van Ness closed both sides
of a $7M property in a two week long escrow, and in the same week Woodside
opened a new sale for $12M, sold by a fellow CB Menlo Park-El Camino
agent, and the following day Woodside opened another $13M sale. Again,
the message is quite the opposite of the doom and gloom which make headlines.
I encourage people to get the facts from an experienced real estate
professional, the person most qualified to discuss the merits of home
ownership. Not from a stock broker on television. Now more than ever,
there is immense value in working with a real estate agent affiliated
with a full-service brokerage, the professional who can guide clients
through the financial elements of the real estate transaction from negotiating
price to serving as a guide to the mortgage market. At Coldwell Banker
Residential Brokerage, we also have a strong, in-house mortgage partner
in Princeton Capital who can identify appropriate financing options
for customers.
Rick Turley
President
Coldwell Banker SF/Peninsula
