By Arti Miglani
We are experiencing an overall slow down in the real estate market in the Bay Area. The interest rates hit a all time high last week with non-conventional loans going upto 7% with one point. The built out areas like the mid-peninsula and San Francisco where the median home prices are just over a million show less stress with the change in market conditions. The demand continues strong in these areas inspite of tighter credit standards and affordability concerns.
Some neighborhoods of the East Bay and the South Bay, where the homes are over a million, are experiencing a slow down because of the fact that the lenders are requiring larger downpayments with reserves of 6-9 months. The interest rates are not helping these sales too. The Evergreen area of San Jose currently has an inventory of 8 months on the market.
The lower-priced market "will continue to face fallout from the subprime crisis, tighter underwriting standards, and competition from new home developments where price-cutting has been even more severe." This is evident in the Central Valley, Dublin and San Ramon area. The low income areas of east Contra Costa and southern Alameda counties were foreclosure heavy.Recently, Zillow mapped trends in the Bay Area….
According to the National Association of Realtors we are experiencing the slowest sales pace going back to 1999. The market is giving some relief to the multiple bidding war that the Bay Area was experiencing in the past few years. This is true for areas further away from the heart of Silicon Valley like Central Valley, San Ramon, Dublin, Alamo, Concord and South of the Bay. With sales weak and inventories at extraordinary high levels it is a good time for the buyers to buy a home. The sellers though should wait it out to 2009 to sell their homes.
The Multiple Listing Service that the Realtors subscribe to is a good resource for many short sales and bank owned properties too. Talk to your local realtor to get more information.
This is also a good time for investors to look at opportunities to buy investment properties or vacation properties.Recently, the IRS issued the Revenue Procedure ("Rev. Proc.") 2008-16, effective March 10, 2008, which provides a safe harbor for exchanges of vacation homes (defined as "dwelling unit" in the Rev. Proc.). This is an opportune moment to exchange your vacation homes or invest in a vacation home. Because of the many tax implications involved in the purchase of a vacation home, it is always advisable to consult your tax consultant before you make a decision.
Arti Miglani, Realtor
Alain Pinel Realtors,578 University Avenue,Palo Alto, CA 94301
Direct: 650-804-6942Office: 650-543-1015 Fax: 650-323-1143
mailto:amiglani@apr.com www.apr.com
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