By Alicia Lanier, REALTOR
Real estate economist and broker Gary Watts spoke to several hundred Coldwell Banker real estate agents this morning and, by the end of his presentation, most of these Silicon Valley real estate professionals left the hall with huge grins on their faces and plenty of optimism in their voices.
His key message? Expect more and more home buyers to be showing up and producing a ”recovery” in the Bay Area housing market very soon, probably within the next couple of months. And, oh by the way, he continued, there’s a significant possibility that home loan rates will be hovering the mid- to high-five percentage range in early 2008.
Southern Californian Watts, who has a pretty good record of accurately forecasting the direction of California real estate, said the Fed’s recent 1/2 percent cut in the benchmark interest rate and the calming of the financial markets soon will cause money to begin flowing back into mortgage securities. He pointed out:
“We are in the 24th month of the current housing downturn. Historically, housing downturns average 27 months so we may be near the end. Although there has been a significant decline in sales volume, (most of the 9-county) Bay Area’s home prices have continued to show small amounts of appreciation.”
Watts, who made his case with a bookload of statistics, told the gathering that living and working in Northern California offers a real estate investment advantage like no other because of our area’s strong economy and jobs picture.
He explained that the San Jose-San Francisco Bay Area is home to over 20% of California’s entire diversified work force serving the Pacific Rim through trade, a growing service sector, and expanding electronics and manufacturing. Add high-tech, the financial sector, bio-tech, construction, tourism, agriculture and government – and it’s easy to see why the area is a magnet for highly productive jobs. Plus …
- Employment is growing at about 1.8% yearly, adding about 50,800 jobs
- Most area companies employ fewer than 50 people. Today’s technology enables companies to become highly productive with fewer people, ending the boom-bust cycle and its massive layoffs
- Silicon Valley continues to rank #1 for venture capital
- Both our state and area are among the wealthiest in the world. Of California’s top 10 counties for household income, 6 counties are in the Bay Area
- Currently San Francisco ranks #2 in the nation as the most improved retail market, while Oakland ranks #4 and San Jose comes in at #14
- 79% of Bay Area homeowners in default on home loans are successfully avoiding foreclosure
- Although home sales are down, median home prices in the Bay Area overall and in Santa Clara County specifically have continued to set records
TIP for Buyers: What does Watts’ prediction mean to potential home buyers and investors? From now to the end of the year, there’s a window of opportunity you don’t want to miss! Currently we have a plethora of homes for sale in many Silicon Valley neighborhoods, sellers hungry enough to negotiate, and interest rates still near historic lows … there truly has not been a better ”buyers’ market” in years! Get going! Remember, in the past year we have been in a fairly “normal” market compared to other areas, not in a ”deep downturn” … so take advantage of your purchasing power while you can.
TIP for SELLERS: You get ready, too, Mr. or Ms. Home Seller … clear out the clutter, freshen that paint, start looking for a new home, etc., etc., so you will be ready to move when the market does.
Let me know if you would like to receive a copy of Gary Watts’ full presentation.
Alicia Lanier is a REALTOR and member of the Coldwell Banker Diamond Society – Top 8% of Agents Internationally www.AliciaLanier.com 408-491-1634
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