It's a great year to buy a home in California. 

If you have just returned from Mars or come out of a coma, you may be unaware of what a great time this is to buy a home in the East Bay of California.The downturn in the housing market and the year long shakeout in the mortgage industry have led to a flood of short sales, foreclosures and bank owned properties.

There are literally hundreds of great deals on homes in Danville, San Ramon, Dublin, Pleasanton, Walnut Creek - well, everywhere in the San Francisco Bay Area. In Antioch and Brentwood California their are some real steals.

Houses are begging to be purchased. Some are jumping up and down and crying - buy me, buy me!

The housing affordability index is climbing, indicating an expanding opportunity for first-time buyers.

Families relocating into the East Bay Area are finding the opportunity of a lifetime with housing prices.

Contact Paul to explore the possibilities (925) 963-4246 

Brentwood California has an abundance of homes that are great investment or retirement opportunities. Many of these homes are golf course homes. Some of these homes are selling for 30% to 50% less than they were two to three years ago.

We wrote about how these homes represent a good opportunity for baby boomers in Contra Costa County. 

Investors should check into int possibilities for positive cash flow on these properties. The people moving out of these homes have to live somewhere. What we are seeing is many of these homes going through the foreclosure process and then being leased back to families that had their home foreclosed on, but are still remaining in the area because of jobs and schools.

Contact Paul Mees for information on Brentwood CA foreclosures and golf course homes. (925) 963-4246 

Real estate investors and home buyers who aren’t buying San Francisco Bay Area real estate right now, are going to miss the boat. Home owners in the East Bay have seen the worst, but don’t expect price values to start climbing until Spring of 2009.

A recent article in the Wall Street Journal backs up what we have been saying since the end of last year – the housing crisis will bottom out in the first half of 2008 and the second half of the year will see more stable prices and higher than normal sales activity.

“The dire headlines coming fast and furious in the financial and popular press suggest that the housing crisis is intensifying. Yet it is very likely that April 2008 will mark the bottom of the U.S. housing market. Yes, the housing market is bottoming right now.”

 Read the article – The Housing Crisis Is Over. The article also reflects, in part, the analysis given recently by Mukesh Bajaj, Ph.D, a financial economist teaching at UC Berkely.

What we see happening with local housing markets supports the opinion given in the WSJ article. For example, we had clients in from Florida this week looking to buy. The top five properties on their list all had received acceptable offers in the 24–hour period proceeding their arrival. One of the properties had been on the market for over 120 days. Several of the properties received multiple offers.

Our last listing that entered escrow had six offers submitted. Prices are not climbing, they are stabilizing. Multiple offers are bringing the sale price up to the asking price. There are a few sales closing where the sale price is above the asking price, but this is not the norm.

What does this mean to local home buyers and sellers?

The upper end of the market will remain more sluggish than the bottom end. Investors looking for cash flow properties and buyers looking for great deals that hold the most potential for rapid appreciation are beginning to gobble up foreclosures and bank owned properties. This “bottom-feeder” activity is going to escalate and drive sales activity figures up for the second half of the year.

The increased activity is not going to drive up prices. It is going to reduce and stabilize the downward pressures on pricing.

Residents of communities like Dublin and San Ramon where there is still a significant presence of new home builders are going to see some relief as reduced new construction starts begin to impact the overall local housing markets. This is bittersweet news for existing homeowners in these communities as the value of their new homes has been hammered more than other areas.

Eastern Contra Costa County communities like Antioch and Brentwood are going to see huge reductions in inventory as investors increase their activities in these foreclosure rich areas. International investors and buyers are showing increased interest in U.S, real estate foreclosures as the weak dollar coupled with depressed prices affords them an incredible investment opportunity.

Bottom line? Home sellers have seen the worst. Buyers need to get off the fence if they don’t want to miss the boat.

Related Articles:

• East Bay Real Estate Investing
• San Francisco Bay Area Real Estate is Always Local
• REO Interest Climbing in TriValley Area

Foreclosures – Short Sales – REOs – Bank Owned Properties – Home Prices Still Falling – Home Sales Tanking – New Home Construction in the Tank

With all the doom and gloom and continued focus on the negative, it’s easy to understand why buyers want to float lowball offers. There’s nothing like submitting an offer 30% below asking price to endear one to the seller and the seller’s agent. In the current market, it’s not unusual to see offers come in 10 to 20% below asking price, more if the home is over priced to begin with.

But what about the home that is priced right? Should sellers that are attuned to reality have to face the “out of reality” lowball offer. Real estate agents are responsible for submitting all offers to their clients. It’s the client that makes the final decision.

The New York Times had a good article the other day –Negotiating for a House? Start With ‘Dear Seller’ (free subscription required to read full article)

In the article, Ron Lieber suggest that if you are submitting a lowball offer, you might want to send along a letter of explanation:

Dear Seller:

I’m writing to let you know that I would like to make a bid on your property. I love the area and am committed to buying a house nearby. And your home fits my needs.

But given that my offer is well below your asking price, I also feel I owe you an explanation.

First, consider the big picture. Nationwide, home prices in the first quarter of 2008 fell 14.1 percent compared with the same period a year earlier, according to the Standard & Poor’s/Case-Shiller U.S. National Home Price Index.

That’s the biggest decline in the 20-year history of the data. And just in case you’re wondering, during the housing downturn of the early 1990s, the decline was never worse than 2.8 percent.

Not only that, earlier this month, the National Association of Realtors pointed to the huge number of existing homes on the market. As of the end of April, the total number was 4.55 million. At the rate people are buying right now, that represents an 11.2-month supply.

So buyers have options right now. A lot of them. I’m no different. Your home is great, but it isn’t unique. Few homes are. I know this may be hard to hear, since you’ve spent years creating memories here. But you may be waiting a long time if you hope to find a buyer with the same emotional connection that you have.

My mindset is hardly unique. We’ve all been reading the headlines. The accompanying articles appear prominently in major newspapers and sit on the Web pages where people check their e-mail every day. Everyone sees them, and the psychological impact is real.

Has your real estate agent laid any of this out for you? Maybe so, and you didn’t want to believe it. But it’s also possible that your agent, afraid of offending you and losing the listing, simply doesn’t want to initiate that sort of discussion. It may be worth sitting down for a candid reassessment.

It will be tempting to view my low bid as an insult. Please don’t make that mistake. Your home is genuinely appealing, and I wouldn’t have written this note unless I was serious about buying it. Getting a firm offer in this market is an accomplishment. So congratulations!

Oh, and one more thing. You presumably need someplace to move. My guess is that you’ll find these same points compelling when it’s your turn to buy. You just might succeed in buying for a better price, too.

I look forward to hearing from you soon.

Yours Truly,

The Realist

Ron’s reply from the seller is just as good and the entire article has a lot to say about the art of negotiation. In this example the buyer is using market data and mass mindset to support the lower price argument. The seller responds with emotional connection, value, and near-future changes that may effect financial assumptions.

It doesn’t matter which side of the real estate transaction you are on, this article is worth a read.

Satire by Scott Ott

You gotta love a guy like Scott who knows how to make a point and entertain you at the same time.

CRISIS: Foreclosure Threatens .2 Percent of Homeowners