John Bowman Homes

John Bowman Homes Has Moved

2011-04-15T10:55:00.000-07:00

JohnBowmanHomes now resides at http://inside-real-estate.com/johnbowman/
Please bookmark the new address.

1030 MOUNT CARMEL DR, San Jose, 95120

2011-02-07T15:44:00.000-08:00

I'm holding this home open Saturday, Feb. 12, from 2-4 p.m. Click on the link below for more information.

1030 MOUNT CARMEL DR, San Jose, 95120

And, go here to see the latest hyper-local data on Almaden Valley home prices and how they are affected by public school test scores.

Everyone Seems to Ask Me the Same Question:

2011-01-26T20:09:00.000-08:00

CLICK HERE TO FIND OUT!

San Jose Sellers Begin to Pop Heads Up

2011-01-10T10:59:00.000-08:00

Any major surge in new inventory likely will have to wait until after the Super Bowl. Nonetheless, some sellers in Almaden Valley, Cambrian and other nearby MLS areas are beginning to emerge from their post-Thanksgiving slumber. For more information and details, go here.

Open Saturday: 6761 HEATHFIELD DR, San Jose, 95120

2011-01-08T09:16:00.000-08:00

6761 HEATHFIELD DR, San Jose, 95120

Low Prices & Interest Rates -- and You're Renting?

2011-01-06T08:15:00.000-08:00

Investors know the idea is to buy low and sell high -- and yet they still can't bring themselves to buy a stock when it's near a low and still dropping. "Nobody wants to catch a falling knife," as they say on Wall Street.

So I shouldn't be surprised that, with home prices still off more than 20 percent and interest rates near a generational low, many people are making the decision to RENT.

For those of you with a job, a down payment and true business acumen, go here to search the MLS, see great video tips for buyers and get great advice from a dedicated buyers agent.

Buyers: Don't Regret Leaving Money on the Table

2011-01-05T16:21:00.000-08:00

Now that you're in a multiple offer situation, it's time to stop the guessing games. Make your best offer, or risk regretting the loss of your dream home to someone else who actually paid less than you would have been willing to pay.

For more expert advice, or to search for homes on the MLS, go here.

"Dip" Aside, 2010 was Recovery Year for Almaden, Blossom & Cambrian

2011-01-01T15:44:00.000-08:00

An analysis of MSL sales statistics for the past two years shows that 2010, as a whole, was a year of recovery for the Almaden Valley, Blossom Valley and Cambrian home-sale markets compared to 2009. See the full story here.

"Zestimates" Show Potential Double Dip in Almaden Home Prices

2011-01-01T15:38:00.000-08:00

A 10-year charts of Zillow home estimates for Almaden and Blossom valleys appears to show the beginning of a double dip in home prices. See chart and full article here.

Is "Double Dip" a New Opportunity for Buyers?

2010-12-28T12:12:00.000-08:00

There's lots of buzz about a potential double dip in the nation's housing market. But how would that play out in the Almaden Valley/San Jose area, and who might benefit from it.
Here's an interesting take.

"Interesting" Idea: Buyers Pay More as Prices Dip

2010-12-27T11:05:00.000-08:00

When interest rates go up as much and as quickly as they have in the past six weeks or so, can homes end up costing more even as their prices drop? Possibly ...
It's enough to make you wonder whether rising rates will be a boon or a hindrance to home sales as the post-Super-Bowl-Sunday activity increases.

Is This a Uniquely Usable Real Estate Blog Post?

2010-12-17T11:42:00.000-08:00

It seems to me that most real estate blog posts fall into one of three categories:
A) Now is a great time to buy a home!

B) Now is a great time to sell a home!
C) I'm the best real estate agent ever!

That said, I believe this post on my Inside Real Estate Web site & blog contains information that is uniquely usable for buyers and sellers of homes in Almaden Valley. Let me know if you agree.

"Operation: One Warm Coat" Delivers the Goods

2010-12-16T12:46:00.000-08:00

The best part of our annual "Operation: One Warm Coat" drive is actually delivering the donated coats to a local service organization that can get them into the hands of the families that need them most.

Mortgage Mess - CNBC.com

2010-12-16T08:09:00.000-08:00

Mortgage Mess - CNBC.com
Interest rates continue their 2-month march upward.

Tip for San Jose Buyers # 3: Test Your Agent

2010-12-08T12:47:00.000-08:00

I've heard more than one high-powered listing agent brag about never working with buyers. I believe a home buyer who wants a great agent, but needs an agent who's willing to spend the time necessary to do the job right, might think twice before hiring a listing agent to represent him.

Tip for San Jose Buyers # 2: The Secret Number

2010-12-03T13:55:00.000-08:00

Tip for San Jose Buyers # 1: Penny-wise, Pound-foolish

2010-11-30T20:29:00.000-08:00

HUD, Realtors Video on Shopping for a Home

2010-11-19T13:46:00.000-08:00

The U.S. Department of Housing and Urban Development (HUD) has teamed up with the National Association of Realtors to release a series of three videos aimed at guiding consumers through the home-buying process. This is the first one, about the shopping process. Much of this stuff is fundamental, but it's worth reviewing even if you already know it.

Operation: One Warm Coat is Under Way

2010-11-16T18:15:00.000-08:00

Each holiday season I team up with Coldwell Banker to collect gently used coats and sweaters to distribute to those who need them more than we do. Here's how you can help.

Just Another Perfect Day in Almaden Valley, CA

2010-11-12T13:45:00.000-08:00

So it's a Friday in November, it's sunny and the temperature's headed for the high 60s -- a fact not lost on all the golfers at the Almaden Country Club. What's not to like about living in Almaden Valley, CA?

Almaden Valley Open Home Offers Top Schools

2010-11-10T16:01:00.000-08:00

I'll be holding this home open from 2 to 4 p.m on Sunday, Nov. 14. For more details or to set up a private showing, click here.

Tip for Sellers No 2: The Falling Knife

2010-11-08T14:24:00.000-08:00

This is the second in a series of tips for home sellers that they might not get elsewhere.

Tip for Sellers No 1: The Magic Buyer

2010-11-04T12:58:00.000-07:00

This is the first in a series of videos designed to provide home sellers with food for thought that might not be provided elsewhere.

Why a Great Realtor Must Live in His Car

2010-11-03T16:25:00.000-07:00

Homebuyers Look Gift Horse in Mouth

2010-11-02T13:25:00.000-07:00

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Open Sunday: Cambrian Charmer at $579k

2010-10-29T15:48:00.000-07:00

1443 HAUCK DR, San Jose, CA 95118

Realtors Scare up Funds for Area School

2010-10-28T15:10:00.000-07:00

Santa Clara County Realtors auctioned off dozens of student-decorated Halloween pumpkins on Wednesday to raise thousands of dollars for one disadvantaged elementary school that's in need of teaching supplies.

Open Sunday: Designer Home, Almaden Schools!

2010-10-22T10:29:00.000-07:00

My open house from 1:30 to 4:30 Sunday is an exquisitely remodeled and decorated home in one of Almaden's most highly sought neighborhoods. And the public schools just can't be beaten. But better hurry, interest has picked up since the price was dropped to $950,000!
Click on the adress below for details:

6589 MOUNT ROYAL DR, San Jose, CA 95120

Simonds, Leland Top Almaden API Movers

2010-09-17T13:48:00.000-07:00

Regular readers (and viewers) know that I think many Almaden Valley homebuyers put too much credence in annual school Academic Performance Index (API) scores in deciding which homes to buy and how much to pay.

Nonetheless, the numbers are important and buyers aren't going to stop relying on them just because I ignore them. Plus, there is actual news hidden in the figures released earlier this week by the California Department of Education.

In Almaden, where Williams Elementary has for several years been the API king of the neighborhood's big Four elementaries, the most startling move was made by Simonds Elementary, which added 23 points to its 2009 base score to total 968 -- bypassing Graystone and moving to within four points of Williams itself.

The second largest advance in Almaden was made by Leland High, which added 21 points to settle at 890 and put more distance between itself and Pioneer, which dropped six points to 823.

The two middle schools produced very little movement, meaning Bret Harte maintained its comfortable lead over Castillero, a performing and visual arts magnet.

Here are this year's scores and their gain or loss from 2009 base scores:

Los Alamitos Elementary ..... 916 (-11)
Graystone Elementary ......... 958 (+7)
Simonds Elementary ............. 968 (+23)
Williams Elementary ............. 972 (+7)
Bret Harte Middle ................. 909 (-2)
Castillero Middle .................... 806 (+2)
Leland High School ................ 890 (+21)
Pioneer High School ............... 823 (-6)

Make no mistake: these are all excellent schools. I believe the most important determinant in student performance is parental involvement.

To find out more about individual schools, their performance, demographics, teacher ratios, etc., go to my Web site and click on "Get School Test Scores." This will take you to the education department's API reports page. And remember: Use this information wisely.

Inside Look at the Almaden Brokers Tour

2010-09-08T13:50:00.000-07:00

Here's a behind-the-scenes look at how the best real estate agents in Almaden Valley stay abreast of the market -- by touring virtually every new listing each week so their clients won't have to.

As you'll note, not all of them go to the lengths that I do to make sure all the information actually stays in the memory bank.

The Best Value in Almaden Valley Right Now

2010-08-26T17:11:00.000-07:00

If you have any questions about this home, go here and find 5810 Antigua Drive under "Featured Listings."

The Rose Garden Scores Big on 'Walkability'

2010-08-23T14:53:00.000-07:00

There's a new buzzword in real estate circles: "Walkability."

Simply put, more and more buyers are seeking out homes that allow them to walk to restaurants, coffee shops, bakeries, wine bars, bank branches ... and maybe even their jobs.

I'm sure the green movement (and $3.50 gas) has played a role, as well as a desire to merge walking for exercise into life's more mundane activities as we all try to get more done in what seems like less time every day.

But after a 50-year love affair with the automobile and the shopping mall, maybe many Americans just like the idea of living in a real neighborhood where they not only know their neighbors, but are even likely to run into them while waiting in line for a latte.

Listing agents have taken to touting well-placed-for-hoofing locations in marketing materials. And online real estate marketplace Zillow.com has taken to assigning each home a "Walk Score," a trademarked term it has applied to its own process of measuring how easy it is to walk from a neighborhood home to a variety of community amenities.

San Jose has a reputation as a suburban kind of town, but it nonetheless sports a number of neighborhoods and neighboring towns that offer a fairly high walkability quotient.

One of the most underrated of those, I believe, is the Rose Garden, a neighborhood of charming older homes just west of downtown San Jose. While Los Gatos, Willow Glen and a few other such neighborhoods with their own "Main Street" have long been known as walkable enclaves, the Rose Garden has come into its own over the past few years as its main commercial artery -- The Alameda -- has sprouted dozens of trendy new restaurants and retail shops of all kinds. At the other end of the neighborhood, Bascom Avenue also offers a variety of amenities for walkers.

In addition, the Rose Garden sports its own unique added attraction for hockey fans: It's a brisk 20-30 minute walk from most neighborhood homes to HP Pavilion, a.k.a. "The Shark Tank," home of the NHL's San Jose Sharks.

This means if you've been too busy to make it to the gym, you can come home from work, walk up to Tee Nee Thai or any number of other great eateries for dinner, continue on to the arena (where you'll save $10-$15 on parking), catch an exciting hockey game, then walk back (perhaps stopping for a glass of your favorite pinot at Wine Affairs) and be home feeling fairly invigorated well before midnight (or not!)

Now that's what I call "walkability."

In Almaden, It's About the Schools, Stupid!

2010-06-30T14:27:00.000-07:00

I've held 40 open houses so far this year, most of them in Almaden Valley, where I live. I'd say 85 percent of the buyers who've come through those homes have cited the great public schools as the reason they targeted the neighborhood.

I'd also estimate that 90 percent of those couples were adamant that they wanted their kids in Bret Harte Middle and Leland High School. In their eyes, Castillero Middle and Pioneer High seem to be damaged goods -- an attitude that can be traced directly to the relative API scores of the schools.

I'm not here to argue the merits of those perceptions, other than to point out that I find them unfortunate and more than a little bit misguided. I am here to document the direct effect they're having on Almaden home sales and prices --which is considerate -- and to comment on what sort of obstacles and opportunities they may be creating.

What buyers say is one thing, but statistics gleaned from escrows closed in the first half of 2010 in the Almaden Valley MLS area put a very fine point on the anecdotal evidence:

Homes that feed Castillero sold for an average of $412 per square foot, compared to $438 for Bret Harte. And Castillero homes took 39 days to sell, while Bret Harte homes took just 24.
Homes served by Pioneer sold for $392 per square foot, compared to $437 for Leland. And Leland homes sold twice as quickly -- in 25 days, compared to 51 for Pioneer.

And if asking prices of homes currently on the market are any indication, these gaps may be growing. The offering price of homes that list Pioneer as the high school is $384, while those that identify Leland as the school are listed at a comparatively whopping $471.

Make of all of this what you will.

Are buyers guilty of tunnel vision in their heavy reliance on API scores to evaluate schools? Castillero (810 API), for instance, is an acclaimed performing- and visual-arts magnet school. And Pioneer has consistently improved its scores until its 829 API is within shouting distance of Leland's 869.

Other thoughts:

Sellers of Bret Harte-Leland homes should press their advantage, and obviously are;
Sellers of Castillero-Pioneer homes should tout their relative affordability for Almaden;
Buyers who hang their hats on API scores should be prepared to ante up;
Buyers who value Almaden for all of its great attributes, and who understand that Castillero and Pioneer are excellent schools in their own right, should flock to homes served by those schools, and save $50,000 to $80,000 in the process.

If you're thinking of buying or selling in Almaden, click here and let's get started!

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Inside the Brain of a Real Estate Agent

2010-06-25T14:41:00.000-07:00

Image by Ecliptic Stock Illustrations

"Buyers are liars; if you wanna last, you gotta list."

Real estate agents hear this platitude early and often during their careers, and since it commonly comes from their trainers and managing brokers, most take it to heart. Anecdotal evidence might ingrain it even further into their subconscious.

Ironically, the adage is at once patently absurd and yet firmly grounded in certain realities of the business.

It's absurd because buyers and "listers" -- a.k.a. sellers -- are the same people, the one typically separated from the other by a mere matter of days. In fact, unless a seller is planning to rent his next home, he is quite often both a buyer and a seller at the same time.

It is the nature of the relationship between agent and client that spawns the agent's Jekyll-and-Hyde assessment of his own client: An agent typically has a signed contract with the seller that binds that seller exclusively to him for a specific period of time, often six months. This legal glue promotes loyalty, if not actual trust.

Buyers and agents, meanwhile, nearly always work together without a contract. The main reason for this is that buyers rarely pay their own agents in California; instead, the listing agent agrees to split his commission with the buyers agent when the sale closes escrow. But state law says that a valid contract must comprise three main tenets: Both signers must be mentally competent; the agreement must have a legal purpose; and there must be consideration given for consideration. And since buyers don't pay their agents, the bargain violates Tenet #3. Thus, no contract.

The end result: Buyers aren't bound to their agents by anything more than trust and loyalty. And if a buyer starts feeling neglected or finds any other reason to be dissatisfied with the service he or she is getting, then he or she is out of here without so much as a howdy-do, leaving the agent more convinced than ever that buyers are liars.

Whether the buyer's perception of his agent's competence or diligence is accurate is hardly the point here; few agents will ever admit even to themselves that they have neglected their buyers clients (most do) and in any case, for the buyer, perception is reality.

Remember, most agents have long accepted the idea that they should spend the majority of their time prospecting for, and servicing, their listings. The few leftover hours in a week are the ones they dedicate to helping their buyers.

Making matters worse is another nougat that's pounded into the agent's brain throughout his career: Real estate is a numbers game. The best way to make a lot of money is to go out and corral as many clients and prospective clients as possible and throw them all into the top of the funnel, because only a small percentage of them will trickle out the bottom as actual sales.

Add technology to this mix and now we have all the makings of a perfect storm: An agent who is primarily a listing agent who also has a list of a dozen or so buyers he's "helping."

Enter the Internet, which whispers a siren's song into the overwhelmed agent's ear: "Let's enter all our buyers' key criteria into a computer program that sends them automated e-mails whenever a home that might fit their needs comes onto the market. No need for you, dear agent, to actually check the home out first. Let's have the buyer do a "drive-by" - or better yet, go view the home themselves at an open house - before you spend any of your valuable time on it."

This strategy has become so prevalent that it's taught in very popular seminars. "Never put another buyer into your car again!" shouts the promotional material for one of them (See "Why Real Agents Still Drive Cars," below. "Here's how to make them do all the work to find the home they'll buy, despite the fact that they'll happily pay you for your services."

Ah, thank God for the Internet. Problem solved -- but only for the agent.

Turns out that in virtually any desirable neighborhood, about 15% of homes that go on the market sell in four days or less; the average time on the market for these homes is less than two days. And homes that sell this quickly typically sell for a little more than the asking price, and with multiple offers. Why? Because they are the best homes that went on the market at the best price in those areas, as determined by buyers.

What's all this mean to you? Well, if a home sells in a couple of days, that means in most cases it's selling before its first open house. Which means if you're working with the agent described in this article, it was gone before you ever saw it. You didn't even notice -- but what you have noticed is that your agent has been a lot harder to find than he was before you agreed to work with him.

Fortunately, a tiny percentage of buyers agents have determined that we can do things differently and still make a good living, thanks to San Jose's relatively high property values. Instead of quantity of clients, we go for quality.

I've designed my business so that I never work with more than four buyers at a time. In order for this to make financial sense, I need to work only with buyers who are both highly motivated -- meaning that they are determined to move into a new home in three months or less -- and realistic in their expectations.

That way I have time to go out every week and preview every home that appears to meet their needs on paper. When I find one or more that I believe my client needs to see, I show it to them during the week -- before the next open house. Nothing falls through the cracks, and nobody ever feels neglected. My client has a chance to make an offer before virtually anyone else even knows the home is on the market. In essence, a trickle of buyers going into the funnel remains a trickle coming out.

My most recent closing has left me with two slots to fill with buyer clients.

So here's the pitch you knew was coming: If you think you might want to buy a house, but you're not in any particular hurry, and you want to wait for the market to bottom and maybe for interest rates to go a little bit lower, and you actually like spending your weekends looking at other people's homes while your friends are at the beach, then go out and hire yourself another agent; any old agent will do.

Oops! That's not the pitch you knew was coming. This is:

But if you are serious about taking advantage of the best buying opportunity in more than 35 years in the next three months, and you believe that you are realistic in your expectations, I'd like to talk to you. Contact me and we'll set up a brief meeting, at which we'll interview each other to see if we have a match.

If we do, I'll guarantee you'll get the best representation that somebody else's money can buy.

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The One Sure Way to Spot a Market Bottom

2010-06-24T15:52:00.000-07:00

When I first moved to San Jose 12 years ago, the local housing market was embroiled in a dot.com-fueled frenzy. Every offer turned into a bidding war and when a new-home development opened, you had to win a lottery just to be allowed a chance to buy a home!

It was such a pressure-cooker environment for buyers that when we finally had an offer accepted, our agent got a bit drippy and hugged my wife -- and me. Ah, those were the days (if you were a seller); we thought they'd never end. Even the dot.com bust produced only a relatively minor blip in the steady march upward, which lasted right through The Next Craze of the mid aughts that was embodied by 100% financing and "stated-income" -- otherwise known as "liars" loans.

It all ended in a flash -- with the greatest financial and housing crises since The Great Depression. We are, of course, still trying to find our way out.

I'm reminded of those "good ole days" because we're going through an exact reverse of those market peaks -- sort of like "Bizzaro George" from one of my favorite Seinfeld episodes. And this time it's buyers who think it'll never end.

Prices that remain 25-35% below the peaks of just a few years ago. And the lowest interest rates ever!

It's all been going on so long that many buyers seem convinced that today's environment is going to last forever. They troop through my open houses week after week, snooping for the perfect house at an impossibly low price and, short of that, entirely content to wait for the market to bottom before buying.

It does no good to remind them that this, too, shall pass. That even the most learned experts have only one sure way to spot a housing market bottom: by looking nine to 12 months backward in their rear-view mirror.

It might not happen in a flash this time, but it doesn't have to happen quickly in order for buyers -- especially and most regrettably, first-time buyers -- to miss the single greatest buying opportunity in America since ... well, since The Great Depression.

In fact, if it happens slowly, the effects may be even worse. I'm reminded of a frog that gets thrown into a pot of boiling water: He'll hit the surface and bounce right out. Put the same frog into a pot of luke-warm water and slowly bring it to a boil, and he'll sit there until perfectly ripe.

Buyers who remain on the fence through this summer and into the fall essentially will be betting that the U.S. economy is headed into a dreaded -- and extremely rare -- double dip recession. They may be right, but the truth is that from here, they have a lot more to lose if they're wrong than they have to gain if they're right.

Twelve years ago, my wife and I held our noses and bought at what we were sure was the top of the market. Instead, even after what has happened to prices in the past four years, our home is still worth twice as much as we paid for it. Real estate always comes back.

From 1930 through 2000, California real estate doubled in value every 10 years, like clockwork. The decade 2001-2010 has broken that cycle, but that's a mighty strong tide to swim against.

So step right up and place your bets, folks. Just remember to keep a close eye on your rear-view mirror.

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Homebuyers: Mortgage Rates Drop to Lowest Level on Record - CNBC

2010-06-24T12:37:00.000-07:00

Homebuyers: Mortgage Rates Drop to Lowest Level on Record - CNBC

Why Real Agents Still Drive Cars

2010-04-27T14:58:00.000-07:00

The Internet has made many buyers agents lazy and complacent at a time when homebuyers are most in need of aggressive, smart representation -- and I can prove it.

"NEVER PUT A BUYER IN YOUR CAR AGAIN," screams the headline on an ad for a professional training seminar that recently went out to thousands of real estate agents in the Bay Area. "Here's how to make them do all the work to find the home they'll buy, despite the fact that they'll happily pay you for your services," it went on.

I had to laugh out loud when I read that, since it's my goal as an aggressive, full-service agent to actually get clients into my car so they'll have a realistic chance to buy the best homes that are for sale each week at the most reasonable prices.

The truth is, most agents who represent buyers are more than happy to send their "clients" automated e-mails of listings that appear to match the buyers' criteria, then send them out (unattended) on the weekends to see these homes at open houses. Only after their "clients" have done all the legwork do these agents swoop in and get a commission for doing little more than filling out an offer sheet.

Here's why this strategy works a lot better for agents than it does for their buyer clients: In Almaden Valley and most other desirable neighborhoods, about 14 percent of homes that go on the market each year sell in four days or less. In fact, the average time on the market for these homes is just two days.

What that means for buyers is that most of these homes are sold before they're ever held open to he public; and if they are held open on the weekend, in many cases they're already under contract at the time.

Even more eye-opening is the fact that homes that sell in four days or less typically sell for the asking price and maybe a little more. There's only one reason why buyers would buy these homes that quickly and pay full price for them at the same time: It's because these homes are the best ones that went on the market that week and buyers saw them as a bargain even at the full asking price.

Now don't forget, these homes typically sold before their first open house, so there's only one way the buyers were in position to make the offer: They had aggressive, full-service agents, who spent their week previewing homes in their area of expertise so their buyers wouldn't have to. Those agents then showed these homes to their clients during the week, giving their clients a strong edge over those buyers whose agents took the easy way out.

Unfortunately, you could talk to 500 agents and only hear the above facts from a handful of them. Here's why:
1)Many agents are lazy, and they prefer to do things the easy way;
2)Many agents simply don't know the market well enough to realize what's going on;
3)Most agents prefer to concentrate on listings, which leaves them only a few hours a week to devote to helping their buyers.

Those few agents who work the way I do have had to design our business carefully to make it possible. We've also had to go against the grain of a universal "truth" that's been taught to agents for generations: That real estate is a numbers game, and the best way to make a lot of money is to go out and grab as many clients as possible, because that'll produce a constant trickle of commissions.

I do things exactly the opposite. I work only with three or four highly motivated and realistic buyers at a time. That way, nobody feels neglected, nobody loses out on their dream home because I was too "busy" (read lazy) to show it to them during the week, and I still know I can sell enough homes each year to be well rewarded for my effort.

If that sounds good to you -- and if you believe you are, in fact, highly motivated and realistic in your expectations -- then click here and let's get started!

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Governor Signs Home Tax Credit Bill

2010-03-26T20:08:00.000-07:00

Governor Schwarzenegger on Friday signed AB 183 providing $200 million for home buyer tax credits. The bill allocates $100 million for qualified first-time home buyers who purchase existing homes and $100 million for purchasers of new, or previously unoccupied, homes.

Eligible taxpayers who close escrow on qualified principal residences between May 1, 2010 and December, 31, 2010, or who close escrow on a qualified principal residence on and after December 31, 2010 and before August 1, 2011, pursuant to an enforceable contract executed on or before December 31, 2010, will be able to take the allowed tax credit.

This credit is equal to the lesser of 5 percent of the purchase price or $10,000, taken in equal installments over three consecutive years.

Under the bill, purchasers will be required to live in the home as their principal residence for at least two years or forfeit the credit (i.e. repay it to the state). Buyers also must be at least 18 years old and be unrelated to the seller.

First-time buyers are defined as those who have not owned a home in the past three years.

To learn more about the California Home Buyer Tax Credit, click here and here.

Statistics Lie, Especially in Real Estate

2010-03-01T13:42:00.000-08:00

It's been said that there are lies, damned lies -- and statistics. That's never truer than when wading through real estate numbers.

For instance, I did a search that showed that in Almaden Valley, homes in February sold for 98.1 percent of their listing price. A homeowner might conclude from this that if he puts his home on the market now, someone would pay very close to full price for it.

As Lee Corso might say, "Not so fast, my friend ..."

The program I used to do the search measures the sale price against the existing list price only; it doesn't take into account any price drops that have occurred since the home was originally listed. Also, the statistics only include homes that have actually gone into contract -- not those that are on the market but haven't sold yet.

When I search unsold active listings in Almaden, however, I find 77 homes that have been on the market for an average of 66 days. The average list price for these homes is $1.14 million.

Now compare that sample to the number of homes that sold in February -- 16. The average sale price of those homes was $1.01 million -- $130,000 less on average than the asking price of the homes that haven't sold.

Now we have a much more complete picture. And instead of "If you list it, they will buy" you can formulate a much more accurate conclusion: "If you price it correctly, it will sell. But if you price it based on what it was worth at the top of the market three years ago, it might not sell at all."

If you're interested in your own home's value, or in what's going on in your neighborhood, you can do a lot of your own market research by clicking on "Advanced Search" under "Property Quick Search" on my Web site.

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Why Looking at Open Houses is NOT Enough

2010-02-16T15:22:00.000-08:00

I hold a lot of open houses and I often ask those coming through how they're going about finding a home to buy.

All too often they tell me "their agent" e-mails them listings during the week and then they check the houses out if they're open on the weekends.

"That's too bad," I say -- and wait.

"What do you mean?" some will ask, looking puzzled.

"Well, how many homes are you going to buy?" I ask.

The couple look at each other. "One?!?" someone will say, as if no longer quite sure.

"So, whether you look at six homes, or 60, or 200, you're only going to buy one?" I repeat.

"Yeah ... "

"So you must be looking for something really special," I surmise.

"That's right," comes the answer.

"Did you know that in this neighborhood, it's not unusual for a home to go on the market on Monday or Tuesday, be on the broker's tour on Wednesday morning, and be sold on Friday in time for the buyers to sit down for a nice bottle of Chardonnay?"

"Really?"

"Don't take my word for it; look at this," I say, handing them a 2-page list of homes and other data.

"What's this?"

"A list of homes in Almaden Valley and Cambrian alone, which, since the start of last year, have gone on the market and sold in four days or less," I say. "In fact, if you look right here, you'll see that the average time on the market was just two days."

"But I thought this was a buyers market ... "

"Here's something even more interesting," I say, pointing to figures that show the average sale price of these 71 homes was actually $4,000 higher than the asking price. "Now why do you suppose that buyers were willing to pay a little more than the asking price for these homes in a buyers market?" I ask -- and shut up.

"Because these were the best homes that went on the market that week, and they were also priced the best," I say, answering my own question. "In other words: These were the special homes -- just like the one you're looking for."

I let that sink in.

"So," I conclude, "if you have an agent who's sending you electronic listings and expecting you to go check out the houses on the weekend, either he's not paying close attention to the market ... or you're apparently not his highest priority."

Uncomfortable though it may be, the logic is irrefutable: A buyer who waits for an open house to look at a home of interest is, typically, going to see the homes that more motivated buyers with top-notch buyers agents have already seen -- and passed on.

Unfortunately, e-mailing listings to prospective buyers and then expecting them to do the legwork has become the norm for many agents -- especially listing agents who spend the majority of their time prospecting for, and servicing, their life's blood: Sellers.

The bottom line: Buyers need a buyers agent who looks out for their interests alone, and who will open up a home for their private inspection at the buyers' convenience -- and preferably before the first open house. Otherwise, the window may close on their dream home, and they'll never even know it.

And that really is too bad.

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Almaden, Cambrian Markets Picking up Steam

2010-02-04T10:49:00.000-08:00

When, oh when, you might wonder, will the real estate market finally bottom out. If you live in Almaden Valley or Cambrian Park, it probably already has. A year ago, in fact.

Having lived in Almaden for the past 12 years, I specialize in Almaden and Cambrian -- two family-friendly areas that also offer some of the very best public schools in the Bay Area. And being a longtime business journalist and numbers cruncher, I run lots and lots of statistical searches using figures available from the Multiple Listing Service.

Recently, I came up with some extremely interesting -- actually, downright surprising -- trends in our community.

First, prices of non-banked owned, single-family homes in these two MLS areas put in a clear bottom in January 2009. In that month, more than 200 homes closed escrow in these two combined areas, with a median sales price of $540,000. And while prices have fluctuated substantially since then (based largely on seasonal variations), the month ended Jan. 31 saw about 250 closings in these two areas, at a median price of $645,000 -- more than $100,000 higher!

I'm guessing these numbers don't match up with what you've been seeing in the Sunday Mercury News; nonetheless, they are complete and they do not lie. The main reason for the discrepancy is that the Merc reports weekly sales in single zip codes, a method that produces a much smaller sample and can create some major anomalies -- especially since their figures include sales of foreclosed properties.

One reason for the price swing in Almaden-Cambrian is falling inventory: As of Feb. 10, just 116 non-bank-owned homes were for sale, about 1/3 of the recent high of 336 in May 2008!

Now here's a factoid that might surprise you even more: Since the beginning of 2009, 70 homes in Almaden and Cambrian have come on the market and sold in four days or less. Equally interesting, the average sales price of these 70 home was $741,932 -- more than $4000 higher than the average listing price!

And you thought this was a buyers market!

In my next post, I will explain why this is really bad news for those many buyers who are searching for homes by going to open houses on the weekend -- typically after having listings sent to them electronically by their very busy real estate agents.

It's not a pretty picture ...

Can You Really Call Two Bottoms at Once?

2010-01-12T14:11:00.000-08:00

Some homebuyers clearly think they're smart enough to spot the market bottom, judging from the number who say they're waiting until then to buy a home.

They're wrong, but even if they weren't I wonder if they're also smart enough to call the bottom of the interest-rate cycle as well; after all, interest rates are about as important as housing prices in determining your monthly payment, as well as your total cost over the life of your loan.

Interest rates have been at or near generational lows for about a year now, but I believe that we're only a month or two away from a major move upward.

But surely, you say, the Federal Reserve isn't about to raise rates anytime soon and risk nipping our somewhat tepid economic recovery in the bud? Granted, but the Fed's target federal funds rate isn't the only factor that determines consumer mortgage rates, which fluctuate hourly these days.

Nearly as important is the interplay of consumer demand for mortgages and investor demand for mortgage-backed securities (MBS). And the current era of extremely cheap money for home purchases coincides largely with a program under which the U.S. government has purchased nearly $1 trillion in MBS in an effort to help revive the nation's housing market.

The government's plan all along has been to top off those purchases at $125 trillion by the end of March, though as the current burn rate it could actually reach that figure by the end of February instead.

While there is some argument over how great an impact the government's exit from the market will have on mortgage rates, there's no question that the fundamental impact will be to put upward pressure on them.

I'm in the "major-impact" camp. Maybe you're not. At the very least, though, would-be homebuyers who say they're waiting for the market bottom before pouncing need to know that they're actually trying to call two market bottoms at once, if their goal is to save as much money as possible on their home purchase.

If any of you really is that smart, please e-mail me when the bottom arrives. Otherwise, click here and let's get started finding you a home while they're still at their most affordable.

Prices Must be Weighed Against Mortgage Rates in Deciding When to Buy

2009-12-01T15:00:00.000-08:00

Interest rates fluctuate hourly these days, but no matter how you look at them, they are currently at historic (not just generational) lows. As of this writing, qualified borrowers with the very best credit ratings can get a 30-year, fixed-rate mortgage loan at 4 5/8% with one point down.

This makes waiting for housing prices to go even lower an extremely tricky (insane, actually) proposition for those stubborn buyers who believe they can pick the bottom of the market. If the home you want to buy goes down another $25,000, but interest rates go up a point in the process, guess what? The home just got quite a bit more expensive over the life of the loan.

How much more expensive depends on a number of factors, but you can test that statement out at various price levels by using the mortgage calculator at below left. My point is that it's extremely unlikely that housing prices and interest rates will bottom out at exactly the same time, and both play an important role in determining just how much you'll actually pay for a home.

If you follow business news in outlets ranging from the Wall Street Journal to CNBC-TV, you already know that virtually all the experts believe that the path of least resistance for mortgage rates from this point forward is up.

So if you've been sitting on the fence waiting for the right time to buy, you've reached an inflection point. A turning point. The fail-safe point. Call it what you like; the point is that a falling knife is hard to catch, and it can cut you just as badly after it hits the floor and rebounds.

If you're ready to get started, click here. If not, be prepared to forever hold your peace -- and have a first-aid kit at the ready.

Tax credit to be extended, expanded

2009-11-04T11:17:00.000-08:00

President Obama is expected to sign a bill on Friday that extends the $8,000 federal income tax credit for first-time homebuyers through June 30, 2010, and raises the income restriction to $125,000 for a single person and $225,000 for a couple.

The credit also will be expanded to include non-first-time homebuyers, but they will be eligible for a maximum of only $6,500. To read more about the legislation, look down the left column of this blog, where several articles are available under the heading "Real Estate News."

This is great news for everyone who qualifies, and for sellers and yes, Realtors. If you're ready to take advantage of this extended opportunity -- plus some of the lowest interest rates ever and lowest home prices in years -- click here and let's get started.

Every micro-market has its own tipping point

2009-10-12T14:41:00.000-07:00

Just as the Bay Area is pocked with micro-climates, the Santa Clara County real estate market comprises a myriad of micro-markets.

Some are hot and some are not. Some are loaded with foreclosed properties, some are not. And each one has its make-or-break price point, below which homes fly off the shelves and above which they tend to sit for month after month.

In my own Almaden Valley, where lots are large and public schools are highly sought (and median household income is $139,000), that price point is pretty much $1 million these days. In nearby Cambrian (MHI: $93,000), which also boasts strong public schools but generally smaller homes, the number is closer to $750,000. And in red-hot Blossom Valley (also $93K), where nearly four out of every five listings are pending but perception of schools is more challenging, the number is more like $600,000.

One thing each of these micro-markets has in common right now is rapidly declining inventory of available homes. In Almaden, the number of homes for sale has dipped from 137 in March to 55 as of Monday; in Cambrian, from 226 in July 2008 to 79; and in Blossom Valley, from 226 in July 08 to 91 now.

In terms of months of supply at current sales rates, that puts Almaden at 1.5 months. (A balanced market is more typically considered to be six months of supply, and the current national average is 8.5.)

A tightened inventory historically is a sign of a market that has bottomed and is ready to recover. If that's true this time, interest rates certainly won't stand in the way. They've recently dropped to around 4.75% for a conforming loan with one point down for the most qualified buyers - very near last May's generational lows.

The big question mark remains the long-expected flood of new foreclosures expected to hit the market in California and across the country, and what affect that might have on a price recovery. Another is the end of the $8000 federal income tax credit for first-time homebuyers, scheduled to end at midnight on Nov. 30.

Insiders now are betting that the credit will be extended, but not expanded as the nation's homebuilders and Realtors have requested. Since it's been taking a good five to six weeks for escrows to close, we're right at the date where sales could take a big hit unless the government moves to extend the credit.

A buyer who has an offer accepted this week still has a good chance of making the deadline; after that, it's a crapshoot. To find out more about the Silicon Valley real estate market, go here.

It's about time to fish or cut bait on tax credit

2009-08-18T14:30:00.000-07:00

First-time homebuyers who plan to take advantage of the $8,000 federal income-tax credit for buyers who haven't owned a home for at least three years, but who also have been waiting for home prices and/or interest rates to drop even farther, are approaching a conundrum: The credit expires at midnight on Nov. 30, while both prices and mortgage rates have stabilized in recent months.

What now, Sherlock?

Keep in mind that your transaction must actually close before Dec. 1 in order to take advantage of the credit. Remember also, that many sales are taking 50 days or more to close escrow as new appraisal and lending rules have taken affect and slowed an already painstaking process to a crawl.

It's true that real estate and consumer interests are lobbying hard for Congress to extend the credit, and perhaps even to increase it to $15,000 and extend it to all homebuyers, not just first-timers. There may even be a 50-50 chance that these efforts will bear fruit of some kind. But if the glass-half-empty crowd should win the day, an entire generation of fence-sitters are in for a very depressing Holiday season indeed.

At 55, have your cake and eat it, too!

2009-07-17T16:50:00.000-07:00

So you always wanted to live in a Craftsman-style house or Spanish bungalow with hardwood floors, crown molding and all the charm they used to build into homes 70 or 80 years ago, but you never did it because you wanted better schools for your kids?

Now the kids have long gone off to college, you no longer need 5 bedrooms and 4 baths, but you still haven't moved because you don't want your annual tax bill to balloon from $7,000 to $15,000?

Have I got a proposition for you; two of them, actually.

In California, Proposition 60 allows homeowners age 55 or over to sell their current home and buy another in their own county at an equal or lower price -- and take their existing tax assessment with them.

Meanwhile, Proposition 90 allows counties to opt to accept such transfers from other counties within the state, and seven are currently participating: Alameda, Los Angeles, Orange, San Diego, San Mateo, Santa Clara and Ventura.

Both homes must be your primary residence, the purchase must take place within two years of the sale of your current home, and only one spouse needs to be 55 at the time of the sale. For other rules and regulations, just click on the link above.

Of course, I stand willing to use all my knowledge and the resources of Coldwell Banker to help you sell your current home and find and buy your new one!

To get started now, just click here!

Falling inventory: Harbinger of higher prices?

2009-07-08T15:10:00.000-07:00

The supply of single family homes for sale in Santa Clara County has plummeted in the past year, a near-certain sign the housing market has bottomed here and that the beginning of a price recovery is imminent.

I will supply some pretty dramatic numbers straight from the Multiple Listing Service momentarily; as to their import, there's absolutely no need to take my word for it.

Citing the falling inventory in a June 2 article for NuWire Investor, Don Miller of Money Morning noted that "some markets like the West Coast have already bottomed and will start
swinging upward in the fall."

As a primary source of his hypothesis, Miller cites Andrew Waite, publisher of Personal Real Estate Investor magazine.

“The formula’s pretty simple,” Waite says in the article. “As housing inventories shrink in real estate markets around the country, demand and prices go up.”

Miller continues: "After examining the statistics for March, Waite sees a clear bottoming pattern, at least in some markets. If he’s right, the Western United States is already making a comeback and the ripples of resurgence will soon make their way to the Midwest and then to the East Coast.

"What’s more, the improvement from year to year indicates the bottoming sequence will soon have prices on the rise."

Miller notes that housing trends are so intensely local that there's no such thing as a realistic national average for prices.

He's right. And my own intensely local research certainly underscores his point about shrinking inventories in the West.

Active inventory of detached single family homes has fallen rapidly and steadily in Santa Clara County since July of 2008. On June 30 of last year, 6,438 such homes were for sale here; by last Tuesday, June 30, that number had fallen to 2,958 -- a 54% decline.

That left the county with 2.5 months of active inventory, down from 6.6 months a year ago (a market balanced between buyers and sellers is considered to 6 months.)

That said, a "V-shaped" bounce in prices likely isn't in the cards. One big question mark: how many foreclosed homes will continue to flood the market, and for how long.

Even so, extremely low-price, often badly damaged repossessed homes in iffy neighborhoods aren't everybody's cup of tea. And a recent uptick in higher priced homes in the San Jose area -- especially in neighborhoods that offer great public schools -- has me convinced that price appreciation and a hefty number of foreclosed properties on the market are not mutually exclusive phenomena.

All in all, that comfortable perch some would-be buyers have established on top of the fence is beginning to look pretty shaky to me.

Is this the Weirdest Buyers' Market Ever? ...

2009-06-30T16:11:00.000-07:00

... I'm glad I asked: Why yes, it is, at least in Santa Clara County/Silicon Valley.

If you look strictly at prices and interest rates, this is definitely a buyers' market; measure it practically any other traditional way, and it looks suspiciously like a sellers' market. Which may mean a great change is on the horizon.

For instance, there are currently 3,017 active listings of single-family homes in Santa Clara County -- and 3,155 homes under contract. So more than half of all homes on the market are pending sales. Something like 25% to 30% pending is considered normal, or typical. That sounds like a sellers' market.
There is a 2.5-month inventory of homes for sale in the county; a "balanced market" is considered to be six months' supply. In Miami, Fla. and other hard-hit metro areas, current inventory supply is well over 30 months. Definitely indicative of a sellers' market in our market.
Many foreclosed homes and other distressed properties are getting multiple offers and selling for 20% to 30% above asking price; anywhere from 30 to 50 offers is not a rare occurrence these days. Sound like a buyers' market to you?
In areas such as Almaden Valley and Cambrian with good public schools, many homes in the $600,000 to $950,000 range also are selling before the first open house, with multiple offers, at or above asking price. That's more like a sellers' market.
And consider this: the median sale price of a single family home in the county, which bottomed at $444,000 in February, has gone up every month since and now stands at $565,000.
And, while interest rates have actually dipped at bit this week to 5 1/4% with 1 point on a 30-year, fixed rate conforming loan, that's still half a point above the low of just a few weeks ago.

Trend or no trend, weird or just out of whack, I know one thing: If I'm a potential buyer who's been sitting on the fence these past few months waiting for an even better opportunity, I'm getting really, really nervous about now.

Reality Bites for Overconfident Buyers

2009-05-19T14:47:00.000-07:00

First-time homebuyers who've been reading too many newspaper headlines are getting a cold slap in the face when they dive into the distressed-property waters these days.

Having read about "the greatest buyer's market in a generation" and heard the urban myths about friends of friends who've made low-ball offers on foreclosed homes and walked away with the steal of a lifetime, they begin their search for a home of their own with the idea that it's going to be like shooting fish in a barrel.

Feeling no fear, they jump right in and find themselves swimming with ... SHARKS!!?!

OK, enough with the marine metaphors. The awful truth is that in the $200,000 to $400,000 range -- which is where the vast majority of home sales are taking place these days -- the current situation is anything but a classic buyer's market. The typical foreclosed property (or REO, for all you home gamers) at the bottom end of the market is getting multiple offers and selling for way more than asking price.

Don't take my word for it, though I should know. I work out of Coldwell Banker's Almaden office -- typically a high-end operation, thanks to the area's great public schools, large lots and mountain views. Here is a summary of the last weekly update sent out by our office manager to the larger Bay Area:

"Silicon Valley — Our San Jose Almaden office reports all 10 sales this last week were distressed properties; mostly REOs. Many REO listings are receiving 10-25 offers. Banks are jamming the list prices down in an effort to stimulate activity. And it is working. Those properties are often selling at 20% or more above asking price!"

Just this week, a prospective buyer called me about one of our office's REO listings. A check found that the house, listed for $278,300, received 20 offers, five of them all-cash, and is now under contract at $108,000 OVER THE ASKING PRICE.

One recent offer I made on an REO was one of 37 the bank received. The next one, I didn't even submit, once I learned the bank already had 45 offers in hand.

I couldn't make this stuff up, and even if I could, I'd have no reason to. As a buyer specialist, it's certainly not in my best interest to scare potential buyers out of the market. But it's also not in my best interest -- or theirs -- to have them come into the market with completely unrealistic expectations.

Therefore, I shall now defy everything I just said and say that right now is still the best time for a first-time homebuyer that I can remember. The current mortgage rate of 4.75% with one point paid on a conforming loan truly is a generational low. And that $8,000 federal income tax credit for first-time buyers is like having Uncle Sam make your first three or four monthly payments for you (See stories below.)

But if your narrow definition of a bargain is getting the product at a big discount to the asking price, the truth is you've got a better chance of "succeeding" today if you forget about distressed properties and submit a bid instead on a normal, arms-length market sale from a private buyer who's selling his home for his own reasons. Most of them understand that they're not likely to get full asking price in today's market, and therefore are willing to negotiate.

The banks and unfortunate private owners who are being forced into a "short sale" are already taking a bath, thank you. They're selling at a 35% to 50% or more discount from the top of the market and frankly, they're not in any mood to indulge your ego or humor your lowball offers.

And that, my friends, is THE REST OF THE STORY. Now you're locked and loaded, and ready to give it your best shot.

Start here.

A gamechanger for first-time homebuyers?

2009-05-14T09:47:00.000-07:00

A new plan that will allow first-time homebuyers to use their $8,000 federal-income-tax credit as part of their down payment at the close of escrow could help many buyers overcome that last hurdle to home ownership.

U.S. Housing and Urban Development Secretary Shaun Donovan announced the tweak in the existing program Tuesday at the National Association of Realtors' Midyear Legislative Meetings & Trade Expo in Washington.

She said FHA will allow approved lenders, nonprofits, and state and local government agencies to issue short-term bridge loans that buyers can use for down payments. They would then repay the loans after getting their tax refunds.

This is great news for home buyers and sellers alike (yes, and for Realtors, too). Many young couples who come to my open houses or who visit my Web site easily have enough income to make the monthly mortgage payments for homes in their price range. Where most of them fall just short is in coming up with enough of a down payment to qualify even for FHA loans, which allow people to buy with as little as 3.5 percent down.

Donovan said FHA would release details on the new program "soon."

The sooner the better. Now that the cat is out of the bag, the potential down side will come if the FHA does not move quickly to make the plan a reality. If that happens, the Law of Unintended Consequences will immediately take effect, as first-time homebuyers who qualify for the tax credit will delay making a purchase until the bridge loans are available.

It's springtime. Home prices are low; interest rates are even lower. With access to a down payment, young homebuyers who've been sitting on the fence will be out of excuses.

That adds up to a gamechanger, in my book, that could jump start not just the low end, but the move-up part of the market as well.

First-time homebuyers are in catbird's seat - for now

2009-03-25T15:52:00.000-07:00

- Bank-owned properties getting multiple offers and selling for tens of thousands of dollars above the asking price.

- Interest rates hitting generational lows and the federal government doing all it can to drive them even lower.

- The stock market growling to life and rallying 10% in just two weeks.

If I'm a buyer who's been waiting for the perfect moment to make the leap, I just might be getting a little bit nervous right now. Many signs are beginning to point in one direction: up.

But thankfully for buyers -- particularly first-time buyers -- the window remains wide open to land the deal of a lifetime. There are several reasons why first-time homebuyers have a specific edge right now. Here are the two most important I can think of:

1) The federal government's $8,000 income-tax credit for first-time homebuyers who qualify. It's like Uncle Sam agreeing to make your first three (to five) mortgage payments for free.

2) Unlike current owners, first-time homebuyers don't face the specter of losing tens, or even hundreds of thousands of dollars in equity by being forced to sell at or near the bottom of the market cycle to get the down payment needed to buy a home now.

Enough cash to put 20% down, and a good credit record, are the two hurdles faced by many renters today. Those who can clear those hurdles are in position to win one of the most important races of their life: the one to buy their first home.

Bank-owned homes getting multiple offers

2009-02-27T11:24:00.000-08:00

I recently put in an all-cash offer for buyers on a foreclosed home in South San Jose; we ended up offering $100 more than the asking price.

Fergitaboutit!

The bank ended up with 37 offers, and ours was rejected. So what happened to the "moribund" real estate market? In this case, the home was one of the relative handful of repossessed properties that was in near move-in condition. The asking price was $219,900 -- about 40 percent what the home had brought just three years earlier.

Investors are making it extremely difficult for buyers who are just looking for a place to live, but the fact remains that multiple offers on properties in any price range are a hopeful sign for California's real estate market.

Buyers who wait for market bottom will get burned

2009-02-01T20:46:00.000-08:00

Warren Buffett couldn't do it; Carl Icahn couldn't either.

Neither can you.

Both Buffett and Icahn got their hats handed to them in the stock market in 2008. The lesson? Not even the most sophisticated and brilliant investors on the face of the planet can call a market bottom. Not in stocks, not in interest rates, not in housing.

Would-be homebuyers who try to do it are certain to get burned.

How will we know when the housing market has bottomed? The way we always do: by looking in the rear view mirror. One day we'll turn around, and housing prices will be up 20 to 30 percent. Finally some expert will say, "Looks like housing bottomed out six months ago."

That cracking sound you'll hear will be the sound of hundreds of thousands of bones and various other body parts snapping as an entire generation of would-be homebuyers contort their bodies in an effort to kick themselves in the butt for missing a once-in-a-lifetime opportunity.

Their ensuing rush to rectify their mistake will drive prices -- and probably interest rates -- even higher. The great recovery will be under way. And many buyers -- the ones who right now are pretty sure they'll know when prices have hit rock bottom and are waiting for the exact right moment -- will end up paying tens of thousands of dollars more for a home than they needed to.

The only form of "market timing" the average person need engage in is this: Ask yourself whether you believe home prices are closer to the bottom, or to the top. If the answer is the former and you've been thinking about buying, then now would be an excellent time to do it.

Unless you're planning to flip the house within the next year or two, you should be just fine. And if you are planning to do that here's some advice: Take your down payment to Vegas; you'll have a lot better chance with the slots!

Think Twice Before Going with Cut-Rate Agent

2009-01-24T11:42:00.000-08:00

The ads are everywhere you turn: "I'll sell your house for 1%!" Or, "Buy with me and I'll give you half my commission!"

Really. There's no such thing as a free lunch.

An agent who competes mainly by cutting his commission usually does so because he knows he can't compete on market knowledge, or service, or aggressiveness; either that, or he's too lazy to do so.

An agent who competes mainly by cutting his rate is planning to give you cut-rate service. Either that, or he has no real idea what it is he's supposed to do to earn his commission in the first place.

Put it this way: One of the most important services a buyer's agent offers is to negotiate the very best price and terms for his client in making an offer on a home. But if he can't even negotiate with his client to keep the market-rate commission the seller has already agreed to pay him, what's he going to do when he's negotiating with YOUR money, and the seller is dangling (what's left of) his commission check in front of him?

Or put it this way: Any smart investor would risk $5,000 for a possible gain of $500,000, but I don't know a single one who would risk half a million bucks for a possible gain of $5K. So why would you put a half-million-dollar deal at risk just to save $5,000?

Answer: You wouldn't. You're too smart for that.

Lookin' in Louisville? This house you gotta see ...

2009-01-20T15:30:00.000-08:00

I'm not licensed to do business in Kentucky, but this house that's now on the market in Louisville makes me wish I were. The owner is a friend of mine and the home is so unique I'm straying from my Silicon Valley focus just so you can see the pics.

The home actually is with Re/Max, and you can search for it by clicking on "Modify Search" and using the MLS# 1216961 at this site. Here is some of the promotional copy:

"Spectacular, light-filled contemporary home designed by the internationally acclaimed Building Studio architects: Coleman Coker, Jonathan Tate, and Vincent Bandy (now with Rem Koolhaas/REX). The home was part of the 2001 AIA Architects' House Tour, and has been featured in Dwell magazine, The New American Home 4, and The Louisville Guide. Located on a cul-de-sac in the Lakeside neighborhood, the landscaped lot is 40' wide and tapers back to nearly 220.' The house includes certificate membership to the swim club. The 1200 sq. ft. loft-like first floor features an open floor plan where relaxing, cooking, dining and discussion converge. The house features a wood burning fireplace, commercial-style stainless steel kitchen, and large half-bathroom. The concrete floor is cool in the summer, and has a built-in radiant heat system to keep your feet warm in the winter. The 20 foot glass rear wall opens up to the landscaped patio, reflecting pond, and rear shade gardens."

It goes on, and all in all it's enough to make me want to move back to my old hometown -- almost. The home is listed at $445,000, a complete and total steal by San Jose standards.

Sometimes a 'no-brainer' requires some thought

2009-01-07T21:11:00.000-08:00

Is now a good time to sell your home?

That's a no-brainer, right? You'd be a fool to sell into such a buyer's market, wouldn't you?

Actually, the answer depends on what it is you're planning to do with the proceeds. If, for instance, you're selling because you want to buy a more expensive home, now might be your best opportunity in a long time.

Why? Because there's a good chance a more expensive home's value has gone down even more than yours, in which case you now would have more buying power than you otherwise might. Add that to interest rates that are at or near historic lows, and this might be a great time to make the leap.

On the other hand, if you wait until your home recovers its value of three years ago, it's highly likely that the home of your dreams will have recovered its top value as well -- and the price gap might even have grown larger than it was before.

A word of caution, though: You might not be able to take advantage of this window of opportunity even if you want to. If your home has lost enough of its value, your equity may no longer provide you with a large enough down payment to move up.

I'm glad we got that straight.