Avante Real Estate – East Bay Real Estate Blog

East Bay Blog

Happy 2008 and sorry for the delay, here we are.

January 20th, 2008 8:38 AM

First I must apologize profusely for my lack of updating this blog in the last couple of months. If you stop by regularly, you know that I try to update our blog on a regular basis, but with all of the changes that have been occurring in the mortgage and real estate markets it has been quite hectic.

So, I think a good way to kick off a new blog update, and my first one for 2008 is to let you know where we are today. At this point, unless you have been living under a rock, you are aware that we are in a challenging real estate market. For months now we have been getting the barrage of news every night telling us how bad the real estate market is, how there is a glut of inventory, and foreclosure rates are soaring. In reality, the market is challenging, if you are a seller, it is going to take a while for your home to sell and you MUST price appropriately. With that said, I would say that it is no where near as bad as what we see on the news. Watching TV you are liable to think that owning property is a mistake, but most people know that in the long run real estate is a great investment. The current state of the market is a correction from the soaring increases we had in the last 3 to 5 years. At this point I think we are starting to swing a bit too much in the direction of correcting to the down side... In my opinion 2008 will be a good year to get back into the market. I think we should probably be seeing the bottom sometime in the middle of this year, with a flattening out after that for a year or two.

In regards to some statistics, the below price averages are from a Data Quick article dated January 17, 2008. These stat’s show that as expected we have seen price declines everywhere on average over the last year. This is in addition to the declines we saw in 2006. To read the entire article, go to http://www.dqnews.com/RRBay0108.shtm

All Homes	Number Sold Dec-06	Number Sold Dec-07	Percent Change	Median December 2006	Median December 2007	Percent Change
Alameda	1,589	983	-38.1%	$589,000	$540,000	-8.3%
Contra Costa	1,788	971	-45.7%	$569,500	$505,000	-11.3%
Marin	268	193	-28.0%	$804,750	$760,500	-5.5%
Napa	127	72	-43.3%	$590,000	$590,000	0.0%
Santa Clara	2,106	1,265	-39.9%	$656,000	$655,000	-0.2%
San Francisco	589	445	-24.4%	$745,000	$731,000	-1.9%
San Mateo	685	468	-31.7%	$735,000	$733,500	-0.2%
Solano	622	360	-42.1%	$439,500	$370,000	-15.8%
Sonoma	598	308	-48.5%	$525,000	$410,000	-21.9%
Bay Area	8,372	5,065	-39.5%	$618,000	$587,500	-4.9%

Although everywhere is showing an average price decrease, you must drill down further into individual cities, not counties to see how we are doing. Some cities like Oakland, Antioch, and Hayward are dropping quite a bit more than average in Alameda County, while other cities in the same county such as Pleasanton and Castro Valley are holding up better than average. It really depends on your neighborhood, but a good rule of thumb is the more sub-prime loans that were issued in your neighborhood, the further your price has dropped.

I hope you found some of this information useful. You will be getting more regular updates in the future from me, and again I apologize for the delay in posting this. Remember, if you need any assistance in regards to real estate, do not hesitate to contact us, until next time…

Posted by Ted & Lucy Ramos on January 20th, 2008 8:38 AMPost a Comment (0)

Help is on the way!

January 28th, 2008 7:17 PM

A busy week for the markets. It is amazing how quickly outlook can change in the matter of one week. At the start of last week, the markets were poised for the big drop. On the Martin Luther King Jr. holiday last Monday markets around the world dropped precipitously as fears of recession in the United States and disappointment in George Bush's stimulus package caused stock markets in Europe and throughout Asia to dive. The $7 billion dollar fraud perpetrated by a trader working for a large French bank did not help confidence in Europe. Then on Tuesday we saw Ben Bernake drop the Federal Funds rate by 75 basis points. This is the largest single drop since 1982 . The Fed has become accustomed to dropping the rate by a quarter or half point at the most. This showed investors how serious the Federal Reserve is taking the threat of recession. Still the stock markets dived at the begging of the week. Then toward end of the week markets began to stabilize, and we received some good news that the government stimulus package will include checks in the mail and part of it will include a temporary increase of the conforming loan limits. A much needed shot in the arm for housing.

So how will the developments of the last week affect the East Bay Real Estate market? Well, this is a strong one-two punch that should help us start digging our way out of this market to a more normal and balanced market. The drop in the Federal Funds rate will not have a direct impact on 1st mortgages but will more directly effect 2nds loans and equity lines. With the amount of foreclosures seen in the market today, this will be good news for people on the verge of not being able to afford their mortgage payments. Many people with 2 loans may have seen there payments climb recently, to a pace where they may be stretched to the limit or perhaps even unable to afford their payments anymore. With a reduction in the payments on their equity lines, this move may have just saved them from having to face foreclosure, or short sale. The second move, the raising of the conforming loan limit is even better news for the housing market. Many of today's homeowners are facing rate adjustments in their mortgages very shortly. Many of these people were going to be in serious trouble if they had to go back out and refinance into a jumbo loan. The reason is that jumbo loans are harder to qualify for then they were just one year ago. Also, with home values dropping in many areas, some people were not going to be able to refinance into a jumbo loan because of the loan-to-value limits. By raising the conforming limit, more people will be able to take advantage of Fannie Mae guaranteed loans (non-jumbo) which offer a lower interest rate, and are available at higher LTV's.

With the two developments of the last week, and the growing focus the government is putting on the economy, I am confident that we should see the bottom of the housing recession this year. With a flattening out and eventual climbing of median prices in the next several years. For the serious long term inventor, this will be the year to make a move back into the market. Prices are currently still dropping as inventory remains high. With all of the stimulus we are seeing, things should begin to improve very soon. As always if you or someone you know is in need of professional real estate help, don't hesitate to contact us, until next time...

Posted by Ted & Lucy Ramos on January 28th, 2008 7:17 PMPost a Comment (0)