Mortgage Lending Today

Mortgage companies have changed the face of home loan lending as we come to the end of 2007. Here’s a look at the emerging landscape:

What’s Out

• 100% Financing: Banks have mostly stopped entertaining home loans where borrower makes no down payment. Earlier this year the California Association of Realtors said 41% of first-time California buyers were getting 100% financing. Now, in the fourth quarter of 2007, lenders won’t make loans without at the very least 5% down, and more likely will require 10% and 15% down payments.
• Adjustable rate mortgages offering 4 payment options: These loans, called Option ARMs, are risky because mot people make the absolute minimum payment. At a specified point after 30 months the loan payment can jumb by hundreds of dollars per month. In 2006, 27% of borrowers buying or refinancing houses in Santa Clara County used this loan.
• Interest only loans: The only way you can get them now is by showing you can pay not only the interest but the full principal and interest load when it becomes due later. Last year an estimated 28% of borrowers in Northern California used these loans to buy and refinance houses.
• Subprime 2/28 loans: Nearly all the biggest subprime mortgage lenders have stopped making these loans. The 2/28 offers low “teaser” interest rates for the first two years, and then resets to higher floating rates that can add hundreds, and many times thousands, of dollars to a monthly payment. Last year 80% of subprime loans nationally were 2/28s. They were typically made to people with weak credit histories. In 2006, 22% of home purchases in Northern California were with subprime loans.
• Stated income loans: Lenders have almost entirely stopped giving money to people who simply “state” their income on a mortgage application.

What’s In

• 30-Year Fixed Rate Loan: The traditional workhorse loan with its unchanging monthly payment across three decades is back.
• Mom & Dad: Parents are offering gifts to their children to reach a down payment of at least 5% (often from the equity in the parent’s home). Parents are making sure their children get a fixed-rate loan, too.
• Saving money and renting for another year or two: It’s old fashioned, but real estate agents say building up savings can be the ticket to buying a house.
• Income verification: Lenders now want to know all the specific details of borrowers’ financial situation. This means knowing their exact salary and other sources of income.
• High credit score: Lenders say a credit score of 700 or higher – and a down payment – will help deliver a mortgage to borrowers who intend to live in the house.

There’s Two Sides to the Real Estate Burst Bubble Story

Looking around we see information about real estate foreclosures, short-sales, and borrowers defaulting on loans. There is article after article on the Internet, in the newspaper, and on TV. It’s not just about the first-time buyer, either.

The “Real Estate Guru” at Real Estate Investing Blog posted an item about a real estate investor in Las Vegas reporting that he feels forced to walk away from 16 homes he bought and financed just two years ago.

The Guru’s article source was the Real Estate Journal, a blog posting from The Wall Street Journal.

That’s one side of the story.

I know another side.

A couple I know, let’s call them Ray and Edna, had a house with 2 mortgages, 7 credit cards, brand new cars and new furniture. They couldn’t keep up with the payments when they were both employed and Ray supplemented with side jobs. They didn’t lose any jobs, and there wasn’t a disaster in their lives, but for their own reasons they walked away. The bank foreclosed on the home. The creditors nagged. They declared bankruptcy.

That was eight years ago. In that eight years, Ray and Edna have paid cash for everything. They bought many money orders and certified checks. They bought used cars and paid cash for repairs. They rented an apartment closer to their jobs. They ate at relatives houses many times, and never went to a restaurant. They are not addicted to Starbucks.

I could go on and on about what people without credit do. The point is that people without credit can do. They can survive. Having money problems and being in over your head is not a death sentence. It’s tough – no doubt about that. But Ray and Edna picked up the pieces of their shattered lives and moved on.

Today, eight years later, Ray and Edna sought the advice of a mortgage lender about what they would have to do to be homeowners again.

The lender checked their credit score and informed Ray and Edna that they had a score of zero. That’s right, their score was a big fat nothing. They not only don’t have anything bad on their report, they don’t have anything good on it either. The lender told them that they need to get some credit in order to get ready to get a mortgage. He wants them to get one credit card, probably through the bank where their checking account is. He also wants them to buy a car. New cars are being sold at really good prices right now because it’s the end of the model year and there’s a huge amount of inventory that hasn’t sold this year. Financing is available at really good rates, even for people with zero credit scores.

Once Ray and Edna have established the two accounts, credit card and car, they need to make regular and timely payments for 8 to 12 months. Then, and only then, will they be ready to look at buying a house.

A little more work and they will be homeowners again. This time they know more about money and about mortgages, and about being responsible when it comes to money. It was a hard lesson, but they learned it well.

If you are just starting your money lessons, here’s a little more encouragement. It takes seven years to have bankruptcy and foreclosure to clear off your credit record. That’s a long time. But it’s not endless.

Think about what you were doing seven years ago. Where did you live? What were you being paid at your job? Who were your friends? Now that you think about it, doesn’t seven years seem short? It is. And you, too, can get through it.

Don’t do it alone, but get started.

"Buy-Down" as a Seller Incentive

Sellers are looking for ways to get their homes sold. The first thing they do is reduce the price. Sellers also pay for all repairs, especially the Section 1 items from the Termite Report. There can be an allowance for new carpet, or bathroom remodeling. There’s also the NRCC (Non-Recurring Closing Costs) category where Sellers pay for the costs of the buyer’s financing.

Sometimes they stop there. We’re here to tell you that there might be something else Sellers can offer. What we’re talking about here is an interest rate buy-down. This is one of the things New Home Sellers use to stimulate activity when sales start to slow down at their new subdivisions. However, individual Sellers rarely turn to buy-downs as a sales stimulus. Not because the move doesn’t work for them, but because their real estate agent doesn’t realize the option is available, and doesn’t advise them of the option.

A buy-down is a tactic where the Seller pays the buyer’s lender money to lower the Buyer’s interest rate on the new loan. Although the rate can be bought down for the life of the mortgage, it is common to have Sellers buy down the rate for the first two or three years of the mortgage.

Buy-downs are not part of a strong Sellers Market. After all, who needs them when potential buyers are knocking down doors to become home owners? But, now that we are in a Buyers Market, buy-downs have returned.

Lew Sichelman writes in a special article to The Chronicle, “The object of a temporary buy-down is to bring the initial rate down to a point where the buyer can either qualify for financing or can’t resist the lower monthly payment.”

Sichelman goes on to point out that buy-downs usually come in two versions: The “3-2-1 Model,” where the rate is bought down by the Sellers to three percentage points below the market for the first year, two points for the second year, and one point for the third year. The second model is the “2-1 Model,” works the same way except the rate is bought down by two percentage points in the first year and one point for the second year. A third version is a permanent one in which the rate is bought down just enough to make the property purchasable, for the entire life of the loan.

Once the buy-down period ends the rate returns to where it would have been had there been no reduction.

To see Sichelman’s complete article click here.
Here’s another opinion by Henry Savage.

Your real estate agent should be able to talk to you about Buy-Down options, whether you are selling or buying, or both.

What the Heck is a Short Sale?

As we have all read and heard and seen, real estate is not normal these days. Today’s real estate market is a great value for home buyers. There is currently a 15 month inventory of homes available in Silicon Valley. Life goes on and buyers need to move, or want to upgrade, but they must sell their current homes first, and homes are sitting on the market for a long time.
In addition, foreclosures are at a record high. However, there is this thing called a “Short Sale” that isn’t a foreclosure, and isn’t just listing and selling a house by the owners. It is our experience that most people don’t know what a Short Sale is, so here is the scoop.

Basically, a Short Sale is the sale of a property for less than what is owed on it, Owners do this by obtaining permission from all the secured creditors to complete this kind of transaction, and transfer clear title to a new owner (purchaser). When lenders agree to a Short Sale it means the lender is accepting less than the total amount due, and will transfer clear title to a purchaser. Not all lenders will accept short sales, or discounted payoffs, especially if it would make more financial sense to foreclose.

Short Sales leave the homeowner/borrower free of debt when the sale closes. However, they also leave with no money in hand to move on to the next home – no down payment, and not even money for first and last months rent and security deposit if the seller now has to rent.

Another thing Short Sale Sellers should be aware of is that the IRS will consider debt forgiveness as income. As an example, the owner owes $789,000 on the home. They get agreement from the lender that it can only sell now for $725,000. The home gets put on the market and is sold for $719,000. There is a forgiveness from the borrower(s) for $70,000. The IRS will consider the $70,000 as income in the year of the sale.

Short Sales appear on the owner’s credit history for three years. That’s less than the seven years for a foreclosure, but it still has a long-lasting effect on credit.

There’s lots to do in a Short Sale, but of the utmost importance is that the owner keep in contact with the lender. The owner should also have an experienced real estate agent to represent them in this complicated transaction.

Here’s a couple of links to Short Sale information:

About.com: Short Sales in Real Estate - How to Handle Real Estate Short Sales

eHow.com: How to Do a Short Sale

Real Estate Journal.com: Short Sale May Be an Option WhenMortgage Debt Looms Too Large

Losing your home can be very emotional and most people don’t want to face up to the reality until foreclosure sets in. Our recommendation is to talk to your lender. If you cannot pick up the phone and call the lender, then at the very least, call Team Patereau. We can help you get started on this very difficult project.

The Stats

For those of you who like statistics (with pictures) here are some about Gilroy:

Number of Real Estate Transactions in 95020 by Quarter

Real Estate Trends in 5020

Statistics aren’t my favorite thing because they are able to be manipulated. However, the numbers are very important to many people, so I provide them.

What does it mean? To me it means that if you want to sell your house, you have to put a price on it that will attract a buyer. If you want to buy a house, you have to offer enough to get the seller to say OK.

What does it mean to you?

Garlic Festival Time

We had another Garlic Festival in Gilroy last week-end. It’s always on the last week-end of July, Friday through Sunday.

Everything was great about the festival for us. Team Patereau works all three days. I work at the Gourmet Alley Beer Booth, selling beer tickers. Rick works at the Gilroy Rotary Wine Pavillion, a shift each day. One of us takes home dinner.

The festival showcases Gilroy and the wonderful, friendly and giving people who live here. So many volunteers, so much goodwill in the wind.

My favorites this year were:

• The weather! It was not too hot, and when it did get hot there was an occasional breeze to move the air around.


• The people. Everyone I met and saw was pleasant and having fun.


• The Kids Area, who, by the way, sponsored the “Kidsapalooza Talent Competition” for the first time, and which was won by Team Patereau’s granddaughter, Madigan!!!

If the Garlic Festival hasn’t been your thing in the past, I highly recommend you try it. It’s just the best festival ever!

Photo by Bill Strange, Official Garlic Festival Photographer

The OTHER Offer

As I mentioned Monday, Team Patereau received two offers on two different listings last week-end. The first one I bragged about on Monday. Now let me tell you about the OTHER offer.

The listing is a single family home in San Jose’s Eastside. It’s a 3 bedroom, 1½ bath, 49-year old home. In our promotional material we describe it as, “FIXER!” (That’s all capital letters, and an exclamation point added for emphasis.) It’s been on the market since February. From that you can assume that the property has been a challenge.

Finally, with two “Price Corrections” (reductions) we received an actual written offer. Phew! Team Patereau celebrates. Then we read the offer.

Offer Details:

• Offer Purchase Price is $450,000


• Good Faith Deposit is $4,500


• First Loan is $360,000


• Second Loan is $90,000


• Buyer gets Good Faith Deposit of $4,500 back at close of escrow


• Buyer wants Seller to credit Buyer at close of escrow $13,500.


• Buyer is one individual person


• Buyer intends to occupy the property as his personal residence


• Preliminary Loan Approval letter from lender enclosed with offer indicates Buyer approved for 100% loan.
  

Things we know from discussing the offer with the agent who wrote it and the lender who wrote the Preliminary Loan Approval letter:

• Buyer does not intend to occupy the property as his personal residence. He intends to “Flip” it.


• Buyer did not give a check for $4,500 to agent for the Good Faith Deposit.


• Real Estate Company that wrote the offer is tied closely with the Lender who wrote the Preliminary Loan Approval Letter (same broker).
  

Translation:
Buyer is a “Flipper,” probably a contractor who is not going to be out of pocket any money to acquire the property, found a lender to give him a “Preliminary Loan Approval” letter for a 100% loan package, and there is no copy of the check for the Good Faith Deposit enclosed with the offer, and the agent indicated (after several unreturned phone calls and a final call threatening to call his broker) that he never got a check from the buyer and the buyer has recently indicated he doesn’t intend to give a check.

The agent who wrote this offer is committing fraud, the potential buyer who signed this offer is also committing fraud, and the lender indicating that they will do a 100% financing package for a non-primary-residence fixer is almost committing fraud, but we’ll leave it at lying, shall we.

In the contract words, page one, INITIAL DEPOSIT, the words are: “Buyer has given a deposit in the amount of $4,500 to the agent submitting the offer…”
The buyer didn’t give it and the agent didn’t receive it. That’s fraud.

Same page, contract words are “Buyer intends… to occupy the property as Buyer’s primary residence.”
The buyer doesn’t. He told the agent he doesn’t, he told the lender he doesn’t, and the agent and the lender told Team Patereau that he doesn’t. That’s fraud.

I recently read about fraud in a blog entry written by Bryant Tutas, titled, “You Want My Sellers to do What?” Bryant’s sample of fraud was overt and obvious to even the least experienced real estate licensee.

The fraud in the offer on Team Patereau’s listing was a more covert, or subtle, form of fraud. It happens fairly regularly in a market like we have in this area, and it gets blamed on "hungry agents" and "starving realtor syndrome." This is the kind of thing that real estate licensees protect their clients from. This is why a real estate agent is a really good idea for every real estate transaction.

Needless to say, when Team Patereau went over the offer details with the Seller, the offer was rejected. So, if you know of anyone who wants to buy a fixer in East San Jose, California, Team Patereau can be reached at 408-981-2799. I’d put in a picture here, but my previous post indicated that if there isn’t anything good to show about the property, don’t show a picture. This property needs a buyer with VISION. Enough said.

SPECIAL NOTE TO AGENT WHO WROTE THIS OFFER:
Fraud is when you lie. Don’t lie, not even when you really, really, really need to get a deal going. Don’t lie to your client, don’t lie to other agents, and don’t put lies down in an offer.

SPECIAL NOTE TO LOAN OFFICER WHO WROTE THIS PRELIMINARY LOAN APPROVAL LETTER:
Fraud is when you lie. Don’t lie, not even when you really, really, really need to get a deal going. Don’t lie to your client, don’t lie to other agents, and don’t put lies down in a loan approval letter.

Technology WANT vs. NEED

I really want one of the new iPhones from Apple.

There, I’ve declared it to the world.

It turns out that there are benefits for a real estate agent, like me, to have an iPhone. Thank you OMUOTO for helping me begin to justify this business investment. He really did a better job of justifying why my customers would want an iPhone in his article for vflyer Blogsight, but I was able to pick out two components where I might benefit:

1. The phone part – duh!


2. GPS – a real estate agent needs to be able to get to and from new places.

Do I need it? Need – there’s a word to get the defined. I looked it up at the Meriam-Webster online dictionary. The verb form of the word, under definition 2 could be usable for me here. The phrase, “a physiological or psychological requirement for the well-being of an organism,” looks like it might apply to me.

As a matter of fact, I think that it absolutely does apply to me.

So long for now. I’m going shopping!

Offers, Offers Everywhere

It’s Monday morning and I’m feeling like an accomplished real estate agent today. Team Patereau has received offers on two of our listings!

Having listings is great. Receiving offers on those listings is tantamount to a miracle in today’s market in Gilroy.

Reflecting on what moved potential buyers to take action on these listings, Team Patereau decided that it is a combination of things, number one being price. But other elements had to be just right, too.

On the residential listing in Gilroy the property had several things going for it in addition to price: location, decorating/showabality and curb appeal. We had worked with the sellers to get the home in showing condition, and the seller had worked very hard to do everything we recommended. The house is beautiful, and in general very showable. However, there was a need to de-clutter and de-personalize the home. We gave them almost the same advice that Kate Hart gave in her blog posting, “5 Things Buyers Should Never See in Your Listings.”

I can’t tell you how wonderful it is to get a client who takes our advice, but it’s even more gratifying when they have taken our advice and we actually get results from it in the form of an offer.

If you’re thinking of selling, or, as was the case for our client, if you're getting transferred and need to sell in a short timeframe, give Team Patereau a call. We’ll work with you to make your property the best it can be, and price it right to get action. Remember, homes get bought and sold even in slow markets.

Bad Pics, A Few More

I just can’t resist doing a few more bad real estate pictures - because they’re there.

Just to be clear, bad real estate pictures is not my original idea. Athol claims that right. That’s all right by me because she posts one picture a day, and there are just too many for her to keep up with. I won’t be doing a series, and I’ll try to make this my last post on the topic, but, as stated before, there are just too many, and new pictures are coming up all the time.

Hot Topic: Real Estate Listing Pictures

I had a new listing last week to get on the MLS, so I took some pictures. I get nervous about pictures because I’m not a photographer, so I run everything through a photo editor program and hope to get the best exposed and cropped piece of the house that I can. It turns out there are a lot of really bad real estate pictures posted around the internet. Once I discovered that, I looked with interest at the bad picture postings – and I’m very relieved to say that no Team Patereau photos were posted!

There’s a great blog posting about Rules for Real Estate Photography, and I think it is good information for me, an agent, as well as you – a seller/potential seller. If you’re a buyer/potential buyer, get what you can from the photos, but plan on visiting the home before you make your final decision.

The rules state that not every room is “photographable.” Bedrooms without any architectural interest, just square rooms with the seller’s furniture, don’t make good photo statements about the house. The only thing they show is what the seller has done with the room, and all that stuff is going to move with the seller.

Same goes for bathrooms, but even more so. However, the author, Athol, states in Rule Nine of Good Real Estate Photos, “Show that it’s not nasty.” Bathrooms are very difficult to photograph because they are small, confined rooms with great big mirrors to reflect the flash, or the reflection of the photographer with a camera in their face. If I can get around the mirror thing, I’ll put in a bathroom picture, but I have to say I really don’t like to do it. After I’ve got a good Front, Close-Up Front, Living Room, Dining Room, Family Room, Kitchen, Back, Another Back, possibly the Master Bedroom, and any Special Feature, then, and only then, will put in a Bathroom picture. But, I’ll never, and I mean never, put in a picture of a bathroom with the toilet lid up. It never ceases to shock me when I see an MLS picture of a bathroom with the toilet lid up.

Here are some bad pictures from currently "Active" Gilroy listings, in the specific category of my pet peeve, "Open Toilet Lid."

There were many more bad pictures, but I've spent enough time on this. I assure you that if you choose me for your agent, I will not post a bad picture. I will take plenty of them, I just won't post them.

STATS - You Know You Love Them

Our good friend Sam, at Chicago Title, keeps us abreast of real estate numbers in Gilroy. She sent me the following info:

• The good news is sales were up in May from April. The not so good news is inventory is continuing to climb.



• In South County, which includes Gilroy and Morgan Hill, we ended May with 34 sales of single family homes and 1 condo/town home sale in Gilroy and 40 single family homes and 10 condos/town homes in Morgan Hill sold.



• May ended with 411 listings of single family homes and 36 Condo/Town homes in Gilroy where Morgan Hill finished the month with 268 Single Family Homes and 32 Condo/Town home listings.



• The Average Days on the Market jumped in Gilroy for single family homes from 94 in April to 105 in May. Condo/town homes are at 72 days on the market for May with only 1 condo/town home sold in May and no condo/town home sales in April.
  


• Morgan Hill’s single family homes days on market decreased from 81 in April to 65 in May and Condo/town homes decreased from 132 days on market in April to 77 in May.



• Overall days on the market have decreased countywide. The closer to Silicon Valley the better the market conditions.
  

Here’s the complete report.

Intensely Local Market Indicators

As I was scanning/reading another real estate blog I came across an article at CNNMoney.com that addressed a big worry for every homeowner right now, “Has the real estate market hit bottom?”

The article states, “Because housing markets are intensely local, it won't do much good to check national figures. Instead, stay alert to leading indicators of recovery in your local market…”
The Indicators are:

1. Inventory is declining – That would mean that there are less houses currently on the market than there were last month, the month before, last year, etc. In Gilroy there aren’t.


2. Houses are selling faster than they used to – That would mean that the average “Days on the Market” number is lower for a category of property than it was last month, the month before, last year, etc. In Gilroy, it’s not.


3. Sellers are acting less desperate – That would mean they lowered the list price, they held open their house both Saturday and Sunday for several months straight, they paid closing costs, they did all inspections, all repairs, and paid HOA for up to a year. In Gilroy, the signs of desperation are growing, not decreasing.
   

I don’t have to tell you what that means, but I will: In Gilroy our market is not through “normalizing.”

Latest Listings in Gilroy, Wednesday Version

I looked with particular interest at the newest listings in Gilroy for the last few days. It just so happends that one of those new listings is by Team Patereau! We listed 1244 Blacksmith Drive. It's a great listing because it shows beautifully, screaming "Professionally Decorated!" and it's priced very aggressively. Those are the kinds of listings we all want nowadays.

Here's the rest of the crowd:

As always, if you or a friend or family member is interested in seeing any of these properties, please call Team Patereau.

Call Me

Friday is the day many people start to try to figure out how they are going to do all of the things they scheduled for the week-end. Let’s assume, because you are here, that you are not fully booked, and that your are, in fact, looking for real estate in Gilroy and trying to figure out what’s new on the market so you can take a look. There are two things you can do at this point:

1. Call me. I’ll talk to you about what you want and what you qualify for, and I’ll arrange a targeted, specific tour for you.


2. Check out the New Listings In Gilroy This Week Chart below. All of the newest listings in Gilroy for the last week are listed. There are 30-ish new listings! Your work is to eliminate the things you are not interested in, narrowing down the list. Once you have picked what you want, you need to go by and see the properties. Some of them will have Open House time either Saturday or Sunday. Which day are you going to drive around? Some won’t have Open House scheduled this week, but may have something in the future. If they are not going to be open you will need to make an appointment to see them. At this point you can call the listing agents and wait for their callbacks so that you can set an appointment for seeing that property, then move on to the next. OR, you could go back to Step 1 above.
   

Reminder: Buyers don’t pay for the services of a Real Estate Agent. The Seller pays the commission when the property sells.

As long as you don’t have to pay for the great service you receive from a Real Estate Agent, what’s keeping you from using one?

Apricots with Real Estate

Today is Thursday, and this week it’s my day off. Team Patereau (Rick and I) are headed over the mountain (Pacheco Pass) to visit my very best friend from high school, Sue, and her husband, Anthony, in Turlock. They have a place in the country and on it they have many fruit trees. This visit we are picking apricots. I look forward to eating fresh, tree-ripened, room-temperature apricots. We’re also going to get enough to take to our daughter to make apricot jam.

There are many recipes for apricots, and many more for apricot jams. Dorothy McNett is a local chef and her recipe for microwave apricot jam looks like one that I could do if I ever did apricot jam. (I’m pretty sure there’s a kitchen in my house, I’m just not sure where it is.)

Can’t think of a tie in: Apricots with Real Estate. Tomorrow’s another day.

The Price is Right

There’s a lot of information out there today about how bad the real estate market is. However, in Gilroy, and at Intero, where my license is parked, deals are being done. Besides new listings going on the board almost every day, there are actual sales. Here’s a list of the Single Family Homes that went into escrow during the week of June 11 – 18, 2007. (That’s a Monday to Monday week, because that’s how we do it in real estate.)

I have included the Original List Price of the property, as well as the Current List Price. A majority of the properties had price reductions before they sold.

I have also included the number of Days on the Market. It took a long time to sell many of these properties, but when the price got right, the property sold.

New Sales, 6/11-6/18/2007
Gilroy CA
Single Family Homes

7045 Yorktown Drive, Gilroy
Original List Price: $730,000
Current List Price: $635,000
Days on the Market: 302

1142 Del Oro Way, Gilroy
Original List Price: $620,000
Current List Price: $575,000
Days on the Market: 217

2325 Olea Court, Gilroy
Original List Price: $1,389,000
Current List Price: $1,358,960
Days on the Market: 134

1476 Senegal Court, Gilroy
Original List Price: $810,000
Current List Price: $725,000
Days on the Market: 112

1321 Fernwood Lane, Gilroy
Original List Price: $648,998
Current List Price: $599,995
Days on the Market: 97

7200 Princevalle, Gilroy
Original List Price: $580,000
Current List Price: $570,000
Days on the Market: 78

1131 Mariposa St., Gilroy
Original List Price: $629,000
Current List Price: $629,000
Days on the Market: 72

1414 Casablanca Circle, Gilroy
Original List Price: $875,000
Current List Price: $849,950
Days on the Market: 32

2585 Sunflower Circle, Gilroy
Original List Price: $1,599,999
Current List Price: $1,599,999
Days on the Market: 5

2530 Muirfield Way, Gilroy
Original List Price: $1,234,875
Current List Price: $1,234,875
Days on the Market: 51

3855 Canada Rd., Gilroy
Original List Price: $1,265,000
Current List Price: $1,199,000
Days on the Market: 88

8742 Foxglove Court, Gilroy
Original List Price: $1,270,000
Current List Price: $1,270,000
Days on the Market: 76

Gino Blefari, the President of Intero Real Estate Services, tells agents, if a property has been listed and everything has been done to tell the world about it, and it hasn’t sold – then it’s about the price.

Every property will sell if The Price Is Right!

June Gloom – NOT!

A friend of mine has lived in the beautiful seaside city of Aptos for many years. She talks about how wonderful it is to live there, with the implication that Gilroy, where I live, is not as wonderful. I saw her just the last week and she referred to several wonderful things about Aptos, and I mentioned that I was cold and should have brought a heavier jacket for our meeting in Aptos. The term, “June Gloom,” came up when she explained that locals have a term of endearment for the foggy, gloomy weather that the seacoast cities experience in June.

As I was driving home to sunny – yes, it could even be termed hot – Gilroy, I thought about the time of year and the state of the real estate market (because I’m always thinking about the state of the real estate market!). Check out the statistics below and you will see that residential sales are happening. It’s not at the same pace as a year or two ago, but homes get bought and sold, even in markets considered to be “down” by the media.

June 2007

Single Family Homes

New Listings: 109

Current Inventory: 411

Closed Sales: 34

Average Days on Market: 76

Median Sales Price: $710,000

% to List Price: 97.54%

Total Sales Volume: $29,504,800

If your next question is, “How much has the market gone down in the last year?” or “If I didn’t sell/buy last year, what did I miss?” here’s the answer:

June 2006
Single Family Homes
New Listings: 144
Current Inventory: 276
Closed Sales: 45
Average Days on Market: 39

Median Sales Price: $765,000
% to List Price: 98.83%
Total Sales Volume: $36,486,799

Let’s go back one more year, just for the heck of it:

June 2005

Single Family Homes

New Listings: 90

Current Inventory: 149

Closed Sales: 70

Average Days on Market: 17
Median Sales Price: $703,500

% to List Price: 101.13%

Total Sales Volume: $53,616,388

What does it mean?

• There’s no June Gloom here.


• Homes were bought and sold in June.


• Things change.


• If you need to buy, BUY!


• If you need to sell, SELL!


• Get an experienced agent in your area (in Gilroy, “Me, Me, Me!”) to help you figure out the price for the market TODAY.

When it gets too hot for you in Gilroy in the coming months, feel free to drive 20 minutes to the June/July/August Gloom!

Picture of June Gloom credited to: http://www.andrewburke.ca/ajlb/viewBlog.php.

Back at it - Blogging, that is

Team Patereau attended a Blogging seminar today. We're re-committed to the new format for the Internet, and for Real Estate. Watch for regular postings!