Multiple Offers Abound

California is an amazing place: The weather, the diversity, the geography, the innovation... all of these factors make California like no other place on earth. Real Estate in California is no exception. Over the last seven years as a Realtor on the Peninsula in the Bay Area I have seen an historic ride up. What is more amazing is that as other markets have fallen spectacularly across the country, the mid-Peninsula has held-up spectacularly well. This just goes to show the resilience that Palo Alto, Menlo Park, Atherton, Woodside, Los Altos, Los Altos Hills, and Mountain View have. With Stanford and the heart of the of Silicon Valley a stones throw away these housing markets remain incredibly resilient. Multiple offers currently seem to be the norm in the heart of the Peninsula. Low interest rates, a rebound in the equities markets, and low inventories are feeding a sellers market. Weekend open homes inn the 1.3M-1.8M range have seen 50 plus groups of people through in a single day. The oldest words in real estate are location, location, location... this continues to ring true.

High Speed Rail

High Speed Rail remains an unknown in the Peninsula Real Estate market. It has the potential to impact homes and valuations along the rail corridor.

There is the possibility that property could be seized by eminent domain if the current corridor is widened. There is the possibility that the train could go underground throughout portions of the Peninsula leaving real estate generally unaffected. There is the possibility that the track will be elevated. There is the possibility that the project will be over budget and will not happen. The reality is that no one knows at this point what will happen though the public comment period may give a bit of insight into this. Regardless, this is an important issue to keep apprised of on behalf of all Peninsula real estate owners and especially those who have property abutting the current rail corridor. As more information comes to light I will continue to write on this subject.

Cash is King

In a booming market the highest bidder gets the home. In other markets it is often the cash buyer that has the advantage over all other interested parties. A buyer that is obtaining traditional financing may need 45-60 days and sometimes more in order to close escrow. From the sellers perspective during this time anything can happen with multiple contingencies available to the buyer. All of the documentation now associated with loans - appraisals, inspections, etc. provides safeguards to the buyer and lender... and these create transaction risk for the seller. The seller has to hope that nothing will derail the sale. Thus, when a buyer makes an all cash offer it is very attractive to the seller even though the offer may be less than other competing offers. In a truly free market the discount a seller is willing to accept from a cash buyer equals the risk the seller feels exists in the deal.

Long story short. Be a cash buyer if you can and still do your due diligence.

Mortgage Market off of Life Support

The Federal Government has officially stopped buying mortgage backed securities as of March 31st 2010. This government action is credited with keeping the broader housing market alive over the last year by keeping liquidity in the market and continuing to fund first time home-buyer mortgages. These purchases, stimulated by additional tax credits have accounted for up to 50% of purchases in many markets across the country and have provided key support to the broader housing market. Interest rates should be watched closely as the financial markets will determine demand for these securities and thus affect mortgage interest rates. The good news is that prices have not jumped nearly as much as people initially thought they might. Optimistically speaking... this will be a smooth transition.