How many south Santa Clara County resdential listings went from active to pending status this past week?  In the towns of Morgan Hill, San Martin and Gilroy, there were a total of 41 listings that went under contract last week!  That is a very healthy number and shows that buyers are finally getting the message to take advantage of this market.

 Of these 41 sales, the list price ranges were as follows:

$200,000 - $500,000 = 27 sales

$500,000 - $800,000 = 9 sales

$800,000 - $1,200,000 = 2 sales

$1,200,000 - $2,000,000 = 3 sales

This is indicative of our lowering median and average prices in the south county due to the low price range of what is selling.  It is interesting to note that out of these 41 residential sales last week, only one of the sales was a townhouse/condo.

 Tune in next week to see how we fare in sales in the market!

The reasons for using a real estate agent are both many and very significant.  They include, but are not limited to the following:

1.  The seller of the home will have a qualified Realtor looking out for their best interests.  They do not pay their Realtor to look out for you.  That is my job.

2.  Real estate is all that I do.  I am constantly monitoring the market and actively looking on your behalf daily.  Through my networking, I often have information on new listings before they hit the market.   

                       

3.  As a Realtor, I have access to information that the public often finds difficult to obtain.  I can research any home on the market before my client writes an offer to ensure that my client isn’t paying too much.

4.  Negotiating isn’t much fun for the average home buyer.  This is one of my strengths and I love to do it.  I negotiate on property all the time when an average home buyer will only negotiate on a few homes throughout their entire lives.  I save my clients money.

5.  Besides price, there are other terms in the contract that also require negotiation.  I am completely familiar with the real estate contracts in use and know the ins and outs of negotiating the various terms.

6.  Contracts can sometimes seem overwhelming and confusing.  I work with these contracts on a daily basis.  I will assist you with understanding the components of the contract and ensure that you are protected.

7.  There are many other details relating to the purchase of a home to deal with.  I align myself with other professional service providers to make the purchase easy.  I have great alliances with mortgage brokers, title and escrow officers, and home inspectors.  You don’t have to worry about much of anything…I do it for you.

8.  My services don’t cost you anything.  I work on your behalf for free!

As a much-needed “time-out”, I just spent a glorious week-plus with family and friends in Sunriver, Oregon.  I highly recommend this resort for the actively inclined.  We mountain-biked all day to several spectacular waterfalls, went rock climbing on granite over-looking the river, hiked to mountain vistas, lakes, and volcano rims, and went white water rafting.  There’s also golfing, tennis and swimming.  In addition, we spent a lot of our time together cooking, cavorting and conversing.

Sunriver Resort has wonderful houses for rent and we were fortunate to rent a large home overlooking Deschutes River which flows through the resort.  There was plenty of room for all of us and, with our rented bicycles, transportation for everyone, no matter where they wanted to go.

The for-sale home prices at the resort were comparable to prices here in the south county.  The most expensive home I saw listed at Sunriver was in the mid-$2 million range and the lowest-priced condos were listed in the mid-$200,000s.  This range is a little lower than what we have to offer currently in the south Santa Clara County, but for many, the Sunriver homes are not their primary residence.

So, for a multi-generational vacation where there is something to entertain everyone, we will be visiting Sunriver again.  But for now, it’s back to work….

Morgan Hill’s City Manager, Ed Tewes, spoke at our South County Realtor Association meeting last week regarding current issues being considered in the city.  He first spoke about the Affordable Housing Initiative Measure that is slated to be on the November  4, 2008 ballot.  Morgan Hill has had voter-approved growth control since 1977.  Developers must compete for building permits.  The competition provides incentives to developers via a point system to provide certain items to their proposed development in order to get enough points to be awarded building permits.  One of the incentives is to include Below Market Rate residences.

The initiative would do away with this incentive and leave affordable housing development to non-profit companies.  At this time, it is up in the air as to whether the initiative will appear on November’s ballot because Morgan Hill’s city government has asked the Santa Clara County Superior Court to review the initiative which, the city says, will make it impossible for the city to abide by state housing laws.

Another topic that the City Manager discussed at our meeting is the downtown plan.  It is the city’s goal to create a more active environment downtown with people living, working and recreating in the downtown core.  The City Council is considering placing a measure on this Fall’s ballot amending its growth control law to bring 500 residential units to the downtown.

The downtown geographical area is from Main Avenue to Dunne Avenue, north to south, and from Butterfield Boulevard to Del Monte Avenue, east to west.  In addition to this core area, the amendment would also include the shopping center where the old Albertsons grocery store was and the neighborhood adjacent to the Britton School area.

The last topic that the City Manager briefly touched on was the 2% Utility Users’ Tax that will also be placed on the November ballot.  The money collected from this tax will go into the General Fund but will be used to expand the police department by 9 1/2 positions.  It is estimated that this will cost each home $10 per month.

Mr. Tewes does an excellent job of keeping the South County Realtors Association informed and we very much appreciate the time he gives us.

   I often have clients ask, “Should we find the house we want to buy prior to listing our house on the market?”  And the answer depends on what the real estate market is doing.  For example, we currently have a buyer’s market with a large number of homes listed.  So, instead of jumping into a purchase that is contingent on the sale of the buyer’s home, it is much better to sell the home first.  This is because it could take many months and possible price reductions until the home is sold.  Not only will there still be a good supply of homes available for sale when the home is sold, but the person who has already sold their home has much more leverage in the negotiation process in their next purchase.

Now consider the seller’s market we had a few years ago.  There were few homes available for purchase and those that came on the market were often sold very quickly with multiple offers.  In that kind of market, it’s advisable to find a desirable, affordable house and put in an offer that gives you time to attract a good offer on your current house.

Also keep in mind that if you’re selling high, you’re probably buying high and if you’re selling low, you’re buying low.  Don’t try too hard to time the market when you are buying and selling in the same type of real estate market.

Well, there is good news to report here in the South County - finally!  In Morgan Hill, San Martin and Gilroy, the number of active listings is down from last month, sales are up and average sale prices have inched up as well.  Looks like we’re in the middle of the summer buying season and buyers are seeing deals too good to pass up!

In those three Santa Clara County cities, the current inventory of single family homes was down to 889 at the end of June as compared to 908 at the end of May.  Still high, but at least it is going in the correct direction.  And the big news is that there were 95 sales in June which is quite a jump from May’s paltry 57!  The average sale price in the south county for June was $702,810 versus $674,717 in May.  The only number that didn’t go in the direction wished for is cumulative days on market, or CDOM.  This rose to 121 days in June from 118 days in May.

From the volume of sales that have occurred already this month, I think July will be a great month as well here in the South County!

In conversations with home sellers here in south Santa Clara County, it is important to remind them of the potential of loss in equity in this downwardly adjusting real estate market.  Sellers still want to “test the market” by pricing their homes a little higher than the latest comparables are indicating that they should be priced.  After the “test” confirms that they are priced too high, they will then lower their list price.  This is called “chasing the market down.”  Every day a seller chases the market, they may be losing equity.

An important concept to understand in this type of real estate market is that the most competitive price often sells first.  The seller who sells first is the seller who jumps the market and is the most competitively priced.  That seller receives the highest possible price at that point in time.

The homes that are selling quickly in south Santa Clara County are the homes that attract the attention of buyers and Realtors alike due to their aggressive pricing.  These homes are receiving multiple offers and often are selling for over list price.  The sellers in these cases sell early during the adjusting market and have more options later.  They can stop chasing and relax.

 Couldn’t be bored with the South County summer weather on Saturday!  I was helping out in the yard at one of my new listings and, because it was a sweltering 104 degrees, I offered to go get cold drinks for everyone.  While driving to the store, the sky started churning.

By the time I made it back to my compatriots, it was raining, thundering and lightning.  And still about 95 degrees.  Were we really in Morgan Hill?

Unfortunately, the lightning started hundreds of fires all over northern California that afternoon, including two substantial fires in the south Santa Clara County region.  I have several clients to whom I’ve sold houses that were threatened by the fires and had to evacuate.

 One client, who lives off of Day Road in Gilroy, told me that she and her husband were ready when the sheriff knocked on their door at 1:00 a.m. Sunday, June 22.  They had the foresight to come up with a packing list after witnessing the destruction of the Summit fire in May.  She said that the packing list left no need for indecision or debate.  As she optimistically stated, they got the opportunity to practice a “fire drill”.  They consider themselves very fortunate that the fire was contained within 1/2 mile of their home.  Now they just need to get the smoke smell aired out of the house.  They also feel fortunate to live in an area where all the neighbors were so supportive of each other.

At this point, the fires are mostly contained and thankfully, no structures have burned.

 

The seller sets the price of the home but ultimately the buyer determines the value. My job is to supply you, the seller, with facts about what has sold recently and what is for sale now. This information will help you make a  decision on pricing your home. There are five essential ingredients that comprise the formula for a successful sale of your home:

• Marketing:  Multiple Listing Service, internet exposure, yard signs, advertising, etc.
• Location: Views, neighborhood, schools, traffic, accessibility, etc.
• Condition: Maintenance and amenities
• Market: Competition, economy, interest rates, mortgage availability
• Price: The #1 most important factor in the sale of your home

The consequences of improper pricing are painful.  Too low and you literally give away money that should have been in your pocket.  Too high and your home will sit unsold for months, developing a reputation of a problem property.

Remember:

• What you paid for your property does not affect it value.
• The amount of money that you need to get out of the sale of your property does not affect its value.
• What you think it should be worth has no affect on value.
• What your neighbor says your property is worth does not affect it value.
• An appraisal does not always indicate what your property is worth on the open market.

What does determine the value of your property?  The value of your property is determined by what a qualified, informed, ready, willing and able buyer will pay for it.

Benefits of Proper Pricing

• Faster sale:  The proper price gets a faster sale, which means you save on mortgage payments, real estate taxes, insurance and other carrying costs.
• Less inconvenience:  As you may know, it takes time and energy to prepare your home for showings, keep the property clean, make arrangements for children and pets, and generally alter your lifestyle.  Proper pricing shortens market time.
• Increased salesperson response:  When Realtors are excited about a property and its price, they make special efforts to contact all their potential buyers and show the property whenever possible.
• Exposure to more prospects:  Pricing at market value will open your home up to more people who can afford it.
• Better response from advertising:  Buyer inquiry calls are more readily converted into showing appointments when the price is not a deterrent.
• Higher offers:  When a property is priced right, buyers are much less likely to make a low offer, for fear of losing out on a great value.
• More money to sellers:  When a property is priced right, the excitement of the market produces a higher sales price in less time.  You net more due to the higher sales price and lower carrying costs.

I bet you’ve heard the saying, “Buy low, sell high.”  Well, this is a “buy low” kind of real estate market we are in and now is the time to take advantage of it.  I am working with a few clients looking in the $200,000 to $300,000 range and they are thrilled to have the opportunity to purchase in this “buy low” real estate market.

An interesting quote from President Theodore Roosevelt:                                            

“Every person who invests in well-selected real estate in a growing section of a prosperous community adopts the surest and safest method of becoming independent, for real estate is the basis of wealth.”

 What was true at the beginning of the last century is still true today.

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Gretchen Merrick Phone:408-892-9015 gmerrick@interorealestate.com Featured Listings 16830 Edwin Jones Court Morgan Hill, CA 4 BR | 3 BA $778,900 More Details 16771 Dry Creek Ct Morgan Hill, CA 5 BR | 3.50 BA $829,000 More Details 16868 De Witt Ave Morgan Hill, CA 6 BR | 4.50 BA $849,999 More Details

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