March 2021 Silicon Valley Real Estate Update - A Market on Fire

In the 18 years that we have been in business, we have seen our share of competitive bull markets in the real estate industry. Yet 2021 has unveiled a level of aggression that even we have never seen before. Buyers have been desperately pushing over list prices and appraisal values, often in $50,000 to $100,000 increments or greater. I equate this to a poker game where players are raising with $50,000 to $100,000 chips at a time. Often Buyers have been all-in with their savings and investments. With the current work/life situations caused by the pandemic likely to linger, Buyers have been laser focused on the Single-Family Home sector as Buyers have been looking for more bedrooms and more backyard space. This is directly causing unprecedented bidding wars.

 

Why is This Happening?

 

This is an example of the inequities that are on full display in our microeconomy. There are certainly many in our nation that have been impacted by the pandemic. However, in the Silicon Valley, it provided an even deeper advantage especially to those in the technology sector. Unlike like those that have been impacted locally or in the rest of the nation, the technology, medical and financial sectors continue to have high employment rates. When a dual income family remains employed, so does their confidence in pursuing or upgrading their housing needs. Also unique to the Silicon Valley are stock options or restricted stock units, which are the life blood of Silicon Valley down payments and wealth creation. With the NASDAQ trading 53% higher than the same time last year, Bay Area home buyers have the collateral to back up their purchases. Lastly, once again record low interest rates, designed to bolster the overall economy, further provides local homebuyers with access to money at a very low cost. This perfect storm is at the root of the hyperactivity in our real estate market.

 

State of the Market

 

As forementioned, Single Family Homes are on fire pretty much anywhere you go in the Silicon Valley and even in the nation. The trend of buying in the East Bay has elevated to astronomical levels in 2021 as Buyers continue to realize that they get much more for their money and they are expecting not to go back to the office in the near future. It is my opinion that Buyers should be cautious with this assumption, I believe that companies will eventually want workers back in the office. In the blink of an eye you may find yourself in a 3-hour commute a couple years from now.

 

Bidding wars abound and we are in a full Sellers’ market. In 2020 the Townhome and Condominium markets struggled, however this year both of these sectors have been showing signs of life. This is likely due to Buyers being priced out of the Single-Family Home market and shifting to the Townhome and subsequently the Condominium market. Even San Francisco in the last few weeks has seen a pickup in demand in the Condominium sector. 

 

Buyer Advice

 

This Sellers’ market is not for the faint of heart. As a Buyer you need to look deep within and ask yourself are you willing and in a position to be able to do what it takes to win a home. If you are looking for a deal or hoping to go under list price, this is not the right market for you and it might be prudent to sit this out until the market balances out or turns in your favor. There are always corner cases, but rare at this very moment. The comparable market data must be analyzed with a grain of salt. The data is 2 to 3 months behind and the market has been increasing week by week. The latest information is key in this market. If you must buy in this market, then you should get in and get out as quickly as you can and allow other Buyers to keep bidding the prices up.

 

As a Buyer How Do I Win?

 

First, having an experienced Real Estate team as your guide is critical to your success. Secondly, we have broken this down to the winning formula below.

 

Winning Offer = Price (Factoring Past Comparables + Most Recent Sales (if any) + Number of Offers + Level of Aggression from Other Buyers) + Strong Terms + Strong Down Payment + Terms Unique to This Seller + Complete Offer Package + Solid Agent + Solid Loan Agent

 

In the end there is no formula when it comes to the emotions of a Buyer and their families. Buyers are ignoring the comparable market data and bidding their maximum willingness to pay. Each Buyer should ensure that they have a strong cash position in case of any appraisal deltas which is a major risk in this market. See my previous blog on how this works or reach out to us so that we can show you in detail https://www.linkedin.com/pulse/how-loans-appraisals-down-payments-deposits-intertwined-alan-wang/. If you do not have sufficient buffer for appraisals, you should lower your price point or sit out of this market unless you find a corner case opportunity. You could also shift to Townhomes or Condominiums where it is not as competitive.

 

Seller Advice

 

If you are the owner of a Single-Family Home the market has never been more on your side. We never know when things will change in the market or the economy, if you plan to move, we know that at this very moment this is an excellent time as any. For those of you in the Townhome and Condominium sector, we will have to analyze your area and complex to see if there is an opportunity there.

 

Looking Ahead

 

There is certainly more optimism and a light at the end of the tunnel with the rollout of the vaccine. This is better news than we have had for all of 2020. Housing will likely continue to be an essential part of our lives. As long as all the factors driving the demand remains constant, 2021 will continue to a strong Sellers’ market on fire.

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For a personal consultation call or text us at (408)313-4352 or e-mail us at alan@alanwangrealty.com

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Q1 2012 Real Estate Update

A Big Thank You to My Clients!

First off I wanted to thank all my clients for your kind referrals and trust in my real estate services. In April I will be on my 9th year in the business, which has been fully based on your trust and referrals. I cannot thank you all enough as my clients for continuing to turn to me for all your real estate needs.

9 Year Anniversary Reflection

As I reflect on the last 8+ plus years in the business, what really drives me is being able to help people who are buying or selling the biggest assets of their lives. Most people don't buy and sell often enough, it is a daunting undertaking alone. I often get clients that work with agents that they don't necessarily trust or are having a tough time getting them to be responsive and to move quickly on their transactions. It was my own experience with an under performing agent that spurred me into this business. I wanted to build a business based on a high level of trust and integrity, guaranteed delivery on my promises, fast execution, as well as the highest levels of service as you deserve in the biggest transaction of your lives. This continues to be the case even as my business has grown, that are my foundational values that I operate on.

Keller Williams Awards

It is also with your support that I have been able to win 2 Top Agent Awards in my office; Top Agent Written Volume and Top Agent Closed Volume. It is an extreme honor as my office has over 200+ agents to be able to earn this amongst such strong performing co-workers.

Market Analysis

As I have mentioned in multiple blogs throughout the last 2 years, there is no recession in the Bay Area and Buyers are out fighting for properties. This demonstrated itself as 91% of my clients in 2011 were Buyers. 2011 showed competition in the good school districts which has always been the case, but overall reasonable opportunities with limited competition in other areas. Q1 2012 this has NOT been the case! Due to low inventory levels and a flood of Buyers in the market, there is competition at every corner. Just last week I had 4 Buyers contact me that they were interested in looking for homes.

Competitive Examples

• One of my clients offered on a 44 year old Townhome in Mountain View that had 13 offers and the winning bid was aggressive in all categories
  
• Another client offered on a Mountain View 4-Plex Bank Owned Property which had a total of 5 offers
• Another client offered on a Sunnyvale Townhome that had 3 offers

Silicon Valley the Land of Gold

Clients ask me why things are so different in the Bay Area than the rest of the country. The answer is Technology and the recent emergence of Social Media. Linkedin, Zynga and Groupon are recent IPO's that have brought equity to the valley, and most look to put these funds to purchase their first homes. With the upcoming Facebook IPO, there will be a flood of cash into the valley and Real Estate prices will sore. If you are a Buyer, I suggest moving quickly before the Facebook lockout period ends (usually 6 months after IPO). These Buyers will be paying cash and closing in 7 days and they will be tough to compete with.

Although the Bay Area is doing well, real estate continues to suffer in the rest of the country. Interest rates continue to be at their lowest rates which is also an opportunity for us in the Valley.

Recent Transactions

• 555 Crawford Drive, Sunnyvale was an off market home that sold to my Buyers
• New Townhome Development sold, let me know if you are interested, this was competitive as well
• 3 written offers lost due to overbidding by competitors

New Home Developments

There have been a few new home developments last year, however most of them are sold out. In the Spring, Summer and Fall I am tracking a few more new home developments that are in progress. Ask me about them and I can keep you in the loop once they are released.

Summary

2012 will be another low home inventory and high buying demand kind of year; where there won't be enough homes to keep up with the Buyers which means competition. I am mainly speaking of Santa Clara County close to Technology companies, but there still are pockets of opportunities. If you are a Buyer be ready to compete with other Buyers. My suggestion is find your home, follow my strategies and it will put you in the best position to win these homes. The longer you take to adjust and question the situation, the more competition you will face later on and may even end up buying a home when things are at their peak.

If you are a Seller talk to me about a Selling strategy to maximize your home value, it's a great time to sell if you have solid equity in your home.

I am looking forward to a busy buying spree in 2012 for many of my Buyers. You can trust that the strategies I have will win you the home, thank you for your trust over the years and I look forward to serving your real estate needs.

Real Estate Industry Survey

Fellow Realtors and real estate enthusiasts. I'd appreciate some help in filling out a survey for my MBA course. The survey link is here, please forward this onto your real estate contacts. I appreciate all of your help!

Survey link: http://tinyurl.com/4lg8ntf

2009 Bay Area Real Estate Review

First off I wanted to wish you and your family a Happy New Year in 2010! May 2010 be a prosperous year! I wanted to extend big thanks for your referrals and making 2009 a record year for Alan Wang Realty. I appreciate your trust in allowing me to service the real estate needs for you, your family and your friends and it is your help that has helped me to get through these trying times.

2009 Real Estate in Review

Macroeconomic Environment

2009 has been a year to remember in Real Estate in one of the toughest economic times for the United States with major highs and major lows. The Bay Area real estate market struggled from mid 2007 with the subprime crisis until Q2 2009 and picked up steam in Q3 and came roaring back Q4 of 2009. The reason was primarily due to government tax incentives for resale and new home developments and interest rates as low as 5% for conforming jumbo loans. There has also been a pent up demand since mid 2007 as Buyers were too nervous about their jobs and the market to make a move. In the meantime families have grown and life has squeezed people out of tiny apartments to fulfill that housing need.

Santa Clara County

There is generally low inventory in Santa Clara County which has also created more demand for homes.

I’ve noticed a pickup in activity on the high end homes with good school districts. West San Jose, Cupertino and Saratoga have seen on average 5 offers for homes in the Lynbrook and Monta Vista High School areas. In Palo Alto I have seen on average 10 offers to even a high of 20 offers for a recent sale for Palo Alto and Gunn high schools. There are lots of all cash offers with 1 week closings in these areas. In Los Altos the higher end homes are also seeing on average 4 offers many all cash as well. If you are in the neighborhood of such a home, ask me how to make your offer the strongest to be able to compete with these all cash offers.

On the other end of the spectrum I’ve also seen a pickup on homes less than $400,000. Investors are out in the previously foreclosure heavy East San Jose, I have seen as many as 80 offers on $250,000 Single Family Homes that end up selling for $100,000 or more over list price. Condominiums in this range are also moving due to FHA loans. There is heavy demand in these areas due to the prices and affordability of homes as well as investors looking to invest.

The homes in the middle rung without the support of a strong school district have seen some slowness, but are recovering slowly but steadily. Areas outside of the immediate Bay Area Santa Clara County are still struggling.

Alameda and San Mateo Counties

Generally I am seeing very nice homes in the Fremont Mission area that have homes available and generally slow outside of Mission. San Mateo County has seen some pick up in certain higher demand areas, but homes tend to sit a bit longer in these areas as compared to Santa Clara County.

2010 Outlook

I don’t have a crystal ball but I anticipate the pent up demand from mid 2007 to continue through 2010. My hope is for an increased inventory of homes in 2010 to fulfill this demand. A-lot depends on what the government does with their tax incentive programs. Anytime government intervenes there will be an artificial increase in demand which undoubtedly could create a bubble once natural order is restored. Foreign investors are flooding our area with safe cash investments in real estate which increases demand as well. The key would be to get into this on the early side before everyone jumps in and catches on and hold on for the long term as real estate should be for the long run. All in all the government seems to be doing their part in jumpstarting the economy and backing the banking system.

My expectations for rates to stay steady but slowly increase through 2010 still within reasonably low levels. The Bay Area has always been a resilient real estate market. If you stay close to the companies, anchor yourself with a good solid area, or better yet a school district you will be in a low supply and high demand location simply due to the population and supply of homes. I see us recovering slowly and steadily in 2010 which will trickle over to surrounding neighborhoods.

For those of you that own and want to know your home value, please contact me for a Competitive Market Analysis and I can advise you on what to do with your specific situation.

Homes Sold in 2010

Again thanks to you for your business and referrals, I was able to sell more homes in 4 months than any other year in my career. Thank you for all your support!

2621 Grapevine Terrace, Fremont
7101 Camino Tassajara, Pleasanton
3240 Murdoch Drive, Palo Alto
968 Amstutz Drive, San Jose, CA
4670 Castlewood Drive, San Jose
607 Valley Forge Way #4 in Campbell
2928 Calico Common, Livermore

For more details on these sales please proceed to http://alanwangrealty.com/ and click on Featured Listings.

Happy New Year

Again I wanted to wish you and your families a Happy New Year. If you or someone you know require Real Estate advice or have any Real Estate needs please do not hesitate to e-mail me at alan@alanwangrealty.com or call me at (408)313-4352. It is with your support that I can continue to sustain this business during tough economic times.

As things move faster I am finding less time to blog but follow me on Twitter for real time real estate updates! http://www.twitter.com/AlanWangRealty

Sincerely,

Alan Wang

April Real Estate Update

Market Summary

It has been a turbulent time in the real estate market for every single one of us across the nation, but there could be small signs of relief. It has been a tough market for the last year and especially in the month of October. Many folks are nervous about the economy, job security and the overall situation at hand. On the real estate front I am seeing some better news to report.

In the last few weeks and there has been an uptick in buying activity; agents in my office are writing offers as well as many of my clients. A client of mine put an offer on a house that was relisted and to our surprise the home sold at list price in a very short period of time. Another investment property for a separate client had 5 offers, all of which were countered. Investors and a contingent of Buyers seem to be cautiously seeking out deals in the market place. Homes under $500,000 have been seeing competition even multiple offers and I am seeing some activity in ranges higher than $500,000 as well. These are faint indications and hardly any sign of a grand recovery. The next few months can help us gauge if this is a trend or just an outlier. If you have been on the sidelines, now maybe the time to start thinking about taking advantage of good properties in the marketplace.

An interesting article on rising home sales in February in the New York Times:
http://www.nytimes.com/2009/04/02/business/economy/02econ.html?hpw

By chance I was at my local bank and walked over to ask what the mortgage rates were for the day. In my career I have never seen my bank have rates even comparable to what my loan agents find in the marketplace. To my surprise the rate that was being offered was extremely low. Mortgage rates are at their lowest ever recorded by Freddie Mac and Fannie Mae and it shows! Call your loan agent, call a few banks and go with whichever group has the best rate for a refinance or purchase.

An interesting article in the Mercury News that these are the lowest rates every recorded:
http://www.mercurynews.com/realestatenews/ci_12005655?source=email

New Loan Breakdowns

It used to be that anything above $417,000 was considered a jumbo (and below is a conforming loan). Today there is an intermediate loan product called a jumbo conforming which handles loans between $417,000 to $729,750 which still has decent rates. Any loan amount above $729,750 is considered a jumbo loan and rates are much higher than either conforming or jumbo conforming products. Second loans are pretty much no longer in existence, the model of private mortgage insurance has returned. For those of you who have a 1st loan you do not plan to refinance, some good advice given to me was to take out an equity line of credit (while in a good job situation) which has low rates currently for emergency situations.
Check with your loan agent, accountant and financial advisor to ensure this strategy makes sense for your circumstance.

Reminder Property Tax is Due April 10th

Just a reminder that property tax in Santa Clara County is due on April 10th! There will be a penalty if you pay past this date. Go to http://www.scctax.org/ or call the County of Santa Clara at (408)808-7900.

Beware of Mortgage Foreclosure Consultants

There are legitimate Mortgage Foreclosure Consultants out there, but there have also been many fraudulent companies in these tough times. Mortgage consultants are not allowed to collect any upfront fees until services are fully rendered; this is the first and most common indication that this is a questionable company.

Long Term Investments

It is critically important to step away from the short run and focus on the long run. Any investment should be a long term investment. We have seen time and time again that the economy is cyclical but trends tend to be overall upward in the long run. Position your real estate property for the long run and ride through this turbulent time. If you have an opportunity to do so, it maybe time to buy a property at this low point, so that you can take advantage of the upside once it returns.

If you or someone you know needs Real Estate help, I will do all that I can in my power to assist them.

Mortgage Rates Drop and Another Short Sale Offer In

Mortgage rates continue to drop with actions from the Fed. This is exactly what the market needs in order to jump start the housing market. Here is the latest article on the drop in rates.

http://www.marketwatch.com/news/story/Mortgage-rates-plummet-after-Fed/story.aspx?guid=%7BABAE25EE-C9D9-4937-A8FB-E58DDD989153%7D

Offer in For a Short Sale By Santa Clara University

Proof that Buyers are on the move, I just put another offer in for a short sale around the Santa Clara University area. The Townhome is way below market price even pre-1st release prices.

Mystery of Short Sales

In the initial stages of Short Sales, many banks and listing agents did not know the process on how to handle such transactions. Banks have now established short sale departments and the Real Estate industry adjusted to this new phenomenon. The trick? Lots of time and lots of patience. Submitting an offer can take as long as 2 months to get a response. Call or e-mail me today on the mystery of Short sales.

I hope everyone had a wonderful Thanksgiving!

Sale Pending and November Market Update

Market Update

It is no secret that the economic situation continues to deteriorate. Job losses continue to be reported on a daily basis and consumers are cautiously watching their spending. Banks continue to hold onto cash and tightening on issuing of credit. Unfortunately, these activities are both needed in order to jump start the economy.


On a more micro economic level, in the Silicon Valley, there has been much more activity from real estate investors primarily on homes less than $500,000 in the conforming loan arena. Short sales and Bank Owned (REO's) are enticing investors to pick up these properties. These homes are actually competed after and bids over these low list prices are not uncommon.


The MLS now requires that when an offer has been submitted to the bank for a Short sale, the status must be change to Sale Pending even during the review period. Bank Owned (REO's) are more competitive. Banks will typically collect the offers and engage in a bidding process for the property. Of course the Bank Owned properties tend to have extremely low list prices.

My Buyer's are slowly coming out to pick up these good deals. Short Sales have been particularly attractive in the marketplace.

Sale Pending at Rivermark in Santa Clara!

Sold to the Buyers of Alan Wang, an amazing 3 bedroom, 2.5 bathrooms Townhome with 1,716 square feet of living space and a lot at 2,178 square feet in the highly desired Rivermark location. Offer in for $80,000 less than current market prices. Just a few steps to the park and the shopping center. Nicely situated, certainly a bargain.

Conclusions

Although things are grim in the marketplace, each person must make the right decisions for their families. If you are blessed enough to not be affected by the job situation and have been looking for a home, it is a great time to consider picking up a deal in the marketplace. If you are a homeowner, hold steady and if needed try to refinance any variable loans as required and plan to ride out this recession for the long run. Each person's situation will vary, please contact me if you would like a personal assessment of your real estate needs.

Reduced Interest Rates are Back

I hope that all of you are enjoying a beautiful but warm summer in the Bay Area. I have had a-lot of inquiries on when lower mortgage rates will return for refinances and purchases. With the government bail out of Fannie Mae and Freddie Mac it appears the market has had some restored confidence at least for right now. Lower rates are critical for many Buyers who are on the fence on buying a property.

Reduced Rates

Back in May there was a quick dip to a 6% rate for a 30 year fixed loan and these lower rates appear to have returned. For those of you that were planning to refinance or make purchases it may be time to reassess your financials and determine whether you should consider refinancing or planning on purchasing a home.

Please consult your loan agent, or if you do not have one I highly recommend my partner for 5 years Mya Tran with Coldwell Banker. She can be reached at (408)472-7558 or e-mail directly her at mya_tran@yahoo.com for a personalized loan consultation.

For those of you that read the Mercury News here is the latest article on the subject http://www.mercurynews.com/news/ci_10430565.

Reduced Price 607 Valley Forge Way #4 by Over $41,000

607 Valley Forge Way has been reduced from $366,888 to $325,000. If you know of anyone who is interested in this upgraded condominium please forward this onward.

State of the Market

The market continues to have short sales converting into bank repossessions foreclosures. These are all dependant on area, the nicer areas are seeing slight dips from the surrounding areas. The subprime troubled areas are where many of the short sales and bank repossessions are occurring. There are gems to be found in the nicer areas on the Condominium and Townhome fronts. I have even been noticing that the newer Single Family Homes have been dipped below $800,000 for the first time in quite sometime.

Looking at the statistics the increase in Active homes listings has held steady while Pending homes have slightly increased and held steady.

These trends are not exciting trends but a note that folks are slowly reentering the market.
Please let me know if you or someone you know would like a personal assessment of your home situation. I am always available to serve you.

Latest Santa Clara County Trends

Here are the latest Santa Clara County Active and Pending trends. There is a slight leveling in active listings and a slight increase in pending listings. This is showing some activity on the buying side and a steady influx of inventory.


For a full view please click here: http://spreadsheets.google.com/pub?key=p1vgWgrdqvl3IipOutFlhcA

Just Listed 607 Valley Forge Way #4 in Campbell

I am proud to present a brand new listing in 607 Valley Forge Way #4 in Campbell! Open House every Sunday from 1 - 4 until through March 2nd.

The property has been completely remodeled please forward this to any of your friends and family who may be interested.

Here are the specifics on the property: http://alanwangrealty.com/PropertyDetails?pid=776963&ls=REIL&user=client

- List Price: $366,888, 2 Bedrooms, 1 Bathrooms, 840 Sq Ft, 1742 Sq Ft Lot
- Fully Remodeled With Over $30k of Upgrades Move in Condition!
- Pergo Hardwood Floors Throughout, Newer Cabinetry, Granite Countertops, Appliances, Recessed Lighting, Two Toned Paint and Partially Tiled Floors
- 2 Bedrooms, 1 Bathroom Condominium in Campbell, 840 Sq Ft With a 1,742 Sq Ft Lot
- Private End Unit on the Second Floor With Oversized Balcony for Entertaining Guests
- Parking Steps Away From the Front Door and Plenty of Street Parking
- Low Association Dues at $240 p/month. Amenities Include Hot Water, Garbage, Exterior Paint and Common Area Maintenance
- Quick Access to San Tomas Expressway, Highway 17, 85 and 880