The inventory keeps growing as well as the number of transactions. Many short sales, Foreclosures and REO (homes that were foreclosed, were not purchased by an auction on the Court house stairs and remained in the banks’ possession) are being sold, some of them with multiple offers. Even the foreclosures in Stockton are being sold out.

There are still many people who can afford to purchase homes. Los Altos and Mountain View and Sunnyvale are getting more balanced, with less multiple offers and more negotiations and concessions toward the buyers. Palo Alto, Cupertino and Saratoga are still holding tight. When I see a nicely remodeled house in a beautiful street and good schools I know it will attract many buyers and sell for more than asking price but the rest of the homes are being sold with negotiations, more contingency times and demands from buyers to fix things. This is the sign of a balance market where supply and demands are the main drivers. I did manage to get a “deal” for one of my clients in Mountain View. A similar house, in the same street, is priced for sale at $175,000 more. When you see a for sale sign standing for a long time it’s because the house is on a busy street or it was priced too high. Pricing right is very important especially in a down turn market. If you price it too high you end up chasing the market down by having to lower the price. The house becomes “stale” as we say in the real estate jargon. This is the time for bargain hunters.

We are back in full action. Inventory is growing as fast as expected in the spring. The “for Sale” signs are springing up like mushrooms after the rain. If you drive through the neighborhood during the afternoon time you’ll see ‘open house’ signs pointing in all directions. Homes are being sold fairly fast, especially in desirable areas with good schools.  Some homes in the most attractive areas in Sunnyvale, close to Helena and Wright Ave, were sold under or at the asking price. The agents told me that they were very surprised. Other homes, near Ortega Park in Sunnyvale, were sold with multiple offers way above (18%) asking price. All these homes in both areas needed a lot of work (what we call TLC “tender love and care”).

People always ask me “how much do you think this house will sell for?” or “how much this property is worth?” I run the comps (homes that were sold lately in that neighborhood) and even though I really know all these homes, it’s hard to predict. Who knows how desperate the other bidders are, how many homes they lost out on by trying to offer just enough to get the house and not too much. Who knows what other motivations the buyers have. Some are being vacated from their rentals and are sick of moving, some want to invest their savings in real estate instead of a rocky stock market.  Sometimes we have the chance to raise our bid and win the house but the buyers are not ready to pay so much more than the asking price. Buying a house is not just mathematics. Feelings and emotions play a crucial part in the decision to buy and pay the outrageous sum of money for a hut in the Silicon Valley.

Can you imagine? In the midst of a market downturn, 15 prospective eligible buyers compete for one home (Carniel). Another home (Richelieu Ct.) was sold for almost $200k more than asking price (with 14 offers) last week. It happened last week in Saratoga. About 6 homes that were priced under $2m were sold for more than 10% over the asking price. Some of them got sold just before the end of the year and some are still in contracts. The rain did not scare buyers away. The same thing is happening in Cupertino, where 12 families competed on one home, and in South Sunnyvale, the Homestead High area, low-end homes in Los Altos (under $2M) and in Palo Alto.Inventory is growing slowly but so is activity.These examples are not valid for every market and definitely not for the entire Silicon Valley. Even in the most attractive market there are homes that are not selling. If they are priced too high, over the market value, they will take a long time to sell and the sellers will end up getting a much lower price when they finally sell. A few examples are a house near Montclaire Elementary School in Los Altos (a highly desirable area) which has been on the market for more than 52 days, and a small house with a huge lot near Nimitz Elementary School in Sunnyvale.Smart buyers are not afraid of looking again at the same homes and offering lower prices. Now is a good chance to get A good deal