What, was that positive news on the housing market I just heard?

Local media recently reported that home sales were up 5% last month, the first increase in a long time. Let's interpret: Typically before we see any increase in housing prices we see an increase in the number of sales or volume of the market. Prices have now decreased to a level where more buyers can participate and enjoy the benefits of home ownership. We are likely to see another change in the market in the coming months. Areas where prices have stabilized are likely to see home prices increase. That's right, I said it, I am on record, we will see home prices increase. Because of regulations now in place, it is doubtful that we will see prices increase to double the list price of a home (like we did in 2004), but we are quickly heading back into a market that favors the smart seller with an effectively priced home. If a home is priced too far above what the market will bear, then it is not likely that it will sell quickly or even at all.

There is currently a moratorium on foreclosures which also begs the question "Will we see more bank owned homes coming on the market causing a dip in prices?" At this point, the banks are required to hold their toxic assets off the market while the government figures out how to mitigate the potential damage to the housing market, a benchmark for a healthy economy. However at some point, the banks will need to purge these assets, some of them vacant and vandalized. We will see some more bank owned homes becoming available in the coming months, but they are likely to sell quickly and with multiple offers. Key for buyers, be prepared, get pre-approved and make sure you and your Realtor are tuned into all new listings. You will likely have to be decisive and present a very strong offer on upcoming bank owned listings, especially if they are in livable condition and in a decent location.

From my perspective, Real Estate is never boring. It is ever changing and presents opportunity for both buyers and sellers regardless of the climate of the market place.

Out of state listing brokers...why are they here and how do we work with them?

With the increase in REO (Real Estate Owned) listings here in the Bay Area, many of the listing brokers are not even based in this state. What does that mean for you the consumer? It means you need to be prepared to take decisive action fairly quickly and it means that your Realtor needs to make you aware of your rights as a consumer in Northern California. Escrow is different from state to state and even from county to county. Therefore, your Realtor needs to know what to negotiate on your behalf and also how to set your expectations.

I can tell you as a Realtor, I am surprised to find offer forms or web forms that make the terms of your offer visible to every other buyer and agent. Agents in California have a fiduciary duty of confidentiality to their clients. The way some of the out of state brokers go through the offer process, it makes it impossible to fulfill that duty. Hopefully the California Department of Real Estate (DRE) will address that at some point but for now it is a process of expect the unexpected.

As a buyer, if you are ever uncomfortable with any part of the process (I didn't say stressed, buying a home can definitely be stressful/emotional), then you need to communicate that with your Realtor and take a step back. Do not let the process dictate your actions, just go into it with your eyes wide open.

First time buyers are awake and hungry!

1st time buyers have awakened only to find themselves in a world of multiple offers. But there are some checks and balances in place to ensure that buyers are not back in frenzied buying cycle.

It's been a busy time for buyers these days. The 1st time buyer segment of the market is HOT, HOT, HOT! Short sales and bank owned properties are selling in days with multiple offers provided they are remotely habitable...and I mean remotely! What does this mean for buyers?

Well, you can still be aggressive but now a little bit of reality needs to get mixed in because you are competing with investors who are cash heavy.

For buyers a house is still worth what you are willing to pay as long as it appraises. Good news is, there are some regulations in place that will prevent frivolous appraisals that indicate an inflated value of a home. As of May 1st, a lender may no longer call the appraiser, whom he has been working with forever, to order the appraisal. It is a more systematic cue of appraisers and a processor will make the order and then the appraisal is done without any conversation with the actual loan broker. While I do admit that I appreciate my appraisal relationships, I am a fan of some of the regulation because it will prevent that crazy market when homes were selling 100's of thousands of dollars above list price. Sometimes rules are good! Even if a buyer who was pre-approved wanted to offer above market value, the appraisal would not support that decision. A buyer working with all cash however, can spend it as they choose as they do not require an appraisal to complete the purchase. There is a great phrase that is true for many crossroads but I find it to be especially pertinent in regards to the emotional process of buying a home: "The definition of failure is giving up what we want for what we want NOW!" Now that some balance has been restored in our market, buyers can get what they truly want and enjoy the long term benefits of home ownership.