Entry level buyers gain success not realized 2 years ago
I heard a great story from one of my wonderful colleagues, Delia Nieto at Coldwell Banker yesterday.  I spotted her meeting with clients in the office so that they could remove all contingencies on the purchase of their first home, priced well under $500,000 in Santa Rosa.  They have rented the same tiny apartment for 6 years and are bursting at the seams with 3 children. Two years ago at the peak of the frenzied Sonoma County real estate market, the median home was priced around $600,000. Although this family worked closely two years ago with Burbank Housing , a Sonoma County non-profit that works with low-income residents to get them into affordable housing, their jobs as a special needs teacher and landscaper did not quite qualify them to buy at the peak prices.   But the downward spiral of entry level prices and their diligence over the last two years, as well as the Acorn Housing Loan program offered in this case in conjunction with Bank of America  are enabling them to buy their first home. Through the Acorn program they each took numerous classes in home ownership and responsible credit management.  Meanwhile, the house they would have paid $540,000 for two years ago, will now cost them $460,000!   Astonishingly, Bank of America's appraisal for this same house for their CURRENT loan, came in at a hefty $530,000. Delia and I are both puzzled but this occurence, but her very happy clients will take it.  Meanwhile, yesterday's Press Democrat newspaper's front page story, confirmed my little anecdote as a trend.  Buyers' market People priced out in recent years jump in as costs fall, supply rises  Nice to see the press making some lemonade (along with smart first time buyers) of the current market....
Factual versus Actual: The Bay Area Real Estate Tide floats Sonoma County's Real Estate Boat
Have you ever visited the US Army San Francisco Bay Model? It is really great to see when the model is running and you can view the really complex tidal patterns that circulate through San Francisco Bay--I had the chance once when I attended a sailboat racing lecture there--tides being really critical to your success racing on SF Bay. With Homescopes, I hope that we can use our informal network of agents on the ground, to help us as a region get a feel for the ebbs and flows of our inter-related Northern California marketplaces. Many of us in the real estate market in the North Bay are fairly convinced that our market in Sonoma and Napa is very influenced by the strengths and variations of the Bay Area real estate market whether in terms of general trends (Hot, Cold or Indifferent) as well as localized effects such as the tides of Palo Alto and the Peninsula, San Francisco and the East Bay Insterstate 80 corridor. I spoke to my friend Izetta Feeny yesterday, a long time Coldwell Banker agent in Sonoma County and shared with her the 3 Ocean's Real Estate recent post about rapid median price apprection in Palo Alto and other selected markets in the Bay Area. "Oh! That's good," she said, "That means we'll see the effect up here in 18 months." As if the rising tide of the heart of the Bay Area's market would eventually ripple north to Sonoma and Napa counties and lift our boat. When our boat is eventually lifted by the Bay Area high tide, we attract at least 2 types of buyers from out of town: entry level buyers who can't afford to live where they work in Marin or San Francisco, and upper-tier buyers with equity in strong, competitive Bay markets that want a lifestyle change and move here full time, or who are looking for a weekend getaway or wine country estate. As the most desireable markets in the Bay Area are strong, then we see a more immediate impact on the markets that will serve the budding country squire (and squire-ess). Virtually all the buyers I have worked with this year fall into this category of new "lifestyle" immigrants to the wine country. As you view the upper quartile median price points for many of Sonoma County's cities (well, towns), the cities with the most cachet for out of town...
Homes on the auction block
One of my colleagues asked me to accompany him to a home auction at the fairgrounds in San Mateo County last weekend. Now, when I think of auctions I think of the Keeneland Yearling Sales in Kentucky, the Napa or Sonoma Wine Auctions or livestock auctions. The concept of auctioning peoples' HOMES, I found depressing and sort of difficult to imagine, as if the homes would be paraded around the livestock ring on a lead rope, with numbers stickered on them, and the happy buyers would roll them away in shopping carts. So last Saturday I decided to go, and to help Miguel and Cecilia, his wife, as their agent, and see what the scoop was. The auction was run by LandAuction.com, a company which primarily has run land sales, but recently has started to move more homes due to the subprime mortgage situation and the amount of homes in default. The process of buying a home in this way is appealing to a lot of people (they think they are getting a deal, and the average time of a home on the block (2 minutes--or 500 homes a weekend) certainly shortens the sales cycle! In Australia, many homes are sold at auction. The process is fraught with risks however, and is about as different as can be from the "standard" California home purchase transaction as it can be, without completely disregarding California laws concerning seller disclosure and buyer investigations in real estate transactions. In the case of the auction, the buyer generally must do ALL of their investigation prior to bidding on the property buy the property as is and with no contingencies close within 21 days of the auction Unless you are very familiar with an area, and have thoroughly investigated a property, you could find yourself in the position of losing your earnest money deposit if you change your mind after your "winning" bid and decide not to go through with a purchase. This is the reverse of the sequence and a vastly different process on a "normal" purchase where the buyer is in the driver's seat during a negotiated contingency period and can cancel a purchase during their timeframes if the property does not pass their inspections or their loan is not approved, for example if the property doesn't pass muster with either the bank or the appraiser. There is no loan contingency period unless you use the lender affiliated with the...