By Real estate
By Fred Hibbert and George Monaco
In what many see as an overnight softening of the market, Northern California real estate has successfully moved from one of the strongest seller’s markets of this generation to a healthy dose of “back to reality.”
Today’s market is a welcome breath of fresh air for many Northern California home buyers and sellers. It is smoothly transitioning to a normalized state where sellers receive fair value for their homes and reap the benefits of the phenomenal appreciation of the markets of the last two years. Buyers, with over 6,000 homes currently on the market in Santa Clara County, benefit from an abundance of options and low interest rates. This shift once again positions buyers and sellers on a more level playing field.
Prices reflect balance, giving potential buyers, who might have been standing on the sidelines last year, the opportunity to re-enter the market. Although I don’t proclaim to own a crystal ball, this is a strong and healthy market and I encourage tentative buyers who are still sitting on the fence to move confidently forward with their home buying plans.
Too many home buyers make the mistake of waiting in hope that the Northern California real estate market will suddenly “crash.” They are overlooking the fact that Northern California remains one of the most desirable places to live and work. Although the high-tech market has been bruised, the area with its diversity of thriving industries, including biotech, finance and wine, is healthy and real estate will remain a secure investment.
People will always need homes, regardless of NASDAQ and its effect on the economy. Some do not have the luxury of “timing the market.” They are transferred, lose members of their families, outgrow their current living arrangements or relocate to enjoy their retirement years. Whatever the reason, people will always need to buy and sell real estate.
If you’re thinking about “moving up,” now is the perfect time. Buyer choices are plentiful and once again they have negotiating power in the real estate transaction.
Additionally, certain buyers who couldn’t purchase last year due to a limited down payment, slow reaction time, contingencies or just stiff competition from multiple offers are finally able to enter the market. Plus, sellers are willing to meet the needs of potential buyers, a rarity in last year’s market.
Interest rates have fallen dramatically in recent months. Many current homeowners are taking this opportunity to refinance, and buyers are examining their purchasing options. The Federal Reserve has already slashed interest rates five times this year and, as inventory levels continue to increase, experts predict additional cuts are inevitable.
For first-time home buyers, one of the advantages of purchasing a property is the tax benefit applied to a purchase. The longer you wait, the less time you have to utilize those tax benefits.
Generally speaking, in this kind of market, when inventory is healthy and choices plentiful, people wait until the bottom of the market. The difficulty with this is that you don’t know a market has hit bottom until it starts to ascend.
The wise investor goes against the current trends of the real estate market. This normalized market provides that opportunity. Buyers are no longer engulfed in bidding wars and are finally able to negotiate offers.
The purchase of a home, whether it be your first or fifth, is one of the most important decisions you will make in your lifetime. The best guidance usually comes from a one-on-one discussion with an experienced real estate professional. But hopefully, these suggestions will help you move a little closer to your dream home.
Hibbert and Monaco, managers of Coldwell Banker Northern California’s Los Altos offices, oversee a team of over 50 real estate professionals in the Los Altos area. Their offices are located at 110 First St. and 496 First St., Suite 100.
For information, call 917-4248 and 947-2222 or e-mail Fred at fhibbert@cbnorcal.com or George at gmonaco@cbnorcal.com.
