I just updated this week’s MLS trends for some of the markets we cover.

The charts seem to indicate that San Ramon and Dublin are seeing the most improvement or stability lately. The active listings in Dublin have fallen dramatically in the last few months and the pending sales have bumped up and are holding steady. In San Ramon, the increase in Spring inventory has not been too dramatic and pending sales are climbing sharply.

Looking at the chart, Walnut Creek seems to be the community with the numbers working against it – sharply increasing inventory and flat pending sales. Pleasanton, CA looks to be in about the same situation as Walnut Creek while Danville is in the middle of the pack.

If you’re thinking of buying new home construction in the TriValley area, here is a note of interest from the Associated Press:

For Lennar, the average sales price of homes delivered dropped to $278,000, down from $303,000 in the year-ago period, partly due to higher sales incentives offered to homebuyers. The company averaged $48,000 in incentives per home delivered in the first quarter, compared to $45,500 per home delivered in the first quarter of 2007.

As you may recall, at the end of last summer, homebuilders were trying to  reduce incentives as the market gave a slight hiccup of improvement. That attempt didn’t last long and after the end of a dismal year, the incentives have returned. New home buyers with a down payment and good credit remain in the driver’s seat with negotiating a good deal on a new home.

A real estate agent with experience in new home sales (like Tracey) can be invaluable for buyers looking at new construction. Talk to any former new home sales agent and they will confirm the value. They certainly won’t do this while they are working for a builder because the common misconception on the part of buyers is that cutting out the agent will save them even more money. The reality is totally the opposite with an experienced agent.

Move-up buyers also remain in positions of negotiating power as they did last fall and for the same reasons. The big change here is that sellers are becoming more realistic on pricing and inventory has shrunk so there aren’t as many choices. Interest rates remain historically favorable.

Don’t expect the prices to drop much more. Most agree, that our local housing markets (except for the foreclosure pockets) are stabilizing and that any further price reductions in the overall market may be negated by rising interst rates.

All-in-all it looks like it’s a great time to buy. The sellers have gone through their cycle of suffering. The group now in the batter’s box are real estate agents. The significant decline in transactions means there are not enough to feed all the hungry mouths.

The California Association of Realtors is expecting a significant drop in the number of practicing Realtors this year. Be sure to select an agent that you feel will survive the shakeout.

Condo owners who purchased between 1999-2003 could be one group of big winners with the proposed increase to the conforming loan limit.

• House prices and interest rates are down
• Buyer negotiating power is up
• Higher conforming loan limit
• First-time buyer programs still exist, but applications are down

These factors are creating a window of opportunity for condo owners that want to move into single family homes. This is a rare opportunity in the 680 Corridor - something we may not see again for years to come.

When savvy first-time buyers realize that this is the perfect time for them to buy that first condo, we could see them greasing the wheels for those move-up buyers.

Move up buyers need to keep their focus on the buy-side savings - give a little to get a lot. 

We think markets like San Ramon, Dublin and Concord may benefit more from this scenario than Danville, Pleasanton and Alamo. Walnut Creek sits midway.

Important Update-  New Conforming Loan Limits Pending – Big Impact on California Housing Expected

Part of our commitment to our clients is to keep them informed of changing conditions and information regarding real estate trends and developments.

Congress could be passing legislation that will actually help you.  And that legislation could come into effect soon.  An article written a couple of days ago suggests that the debate right now is whether a high cost area (California) bump of 150% would be temporary for 1 year, 2 years, or whether it would be permanent.  That seems like they are no longer questioning whether or not to increase the $625,500 conforming limit in California, but for how long.  The final decision will probably not come down until March. 

Who could benefit the most?   Anyone who owes between $417,000 and $625,500, and those looking to purchase properties in California.  What you will see is the housing market heat up, the stock market improve, and home owners with Jumbo Loans (those over the conforming limit) refinancing at lower conforming rates.   This could save you between .500%  to .750% on your interest rate. 

This could definitely cause a log jam for the mortgage industry, especially since a lot of lenders are running lean.  Here’s our suggestion.  BE PREPARED and PLAN AHEAD!!!  Turn times from application to close could be somewhere between 30 and 45 days.

Raising the conforming loan limit up to $729,750 will have the following positive impacts on our local real estate markets:
 

• First Time Home Buyer Programs available with just 5% down to purchase prices up to $768,000.
• Move up buyers can obtain the lowest rates to buy a new home up to $912,000 with only 20% down.
• Using a conforming 1st mortgage and a 2nd mortgage, one can buy a home with as little as 10% down with no mortgage insurance for purchase prices over $1,000,000.
• Homeowners with mortgages today between $417,000 and $729,750 will have access to conforming refinance rates which are currently 0.5% to 1.25% better than corresponding jumbo rates.  This will improve homeowners’ financial positions by creating more disposable income which helps the economy in general.
• Investors will probably seize this opportunity to combine lower rates, lower home prices, and higher rents to buy properties…thus helping to reduce inventory.

Now is the time for move-up buyers to get their homes on the market to take advantage of this significant change of events coming.

Current real estate market conditions in the San Ramon Valley favor move-up buyers. Move-Up Buyers with good credit ratings and a significant equity are in the driver’s seat these days at the negotiating table. These power buyers are the people facing the least hassles and resistance in today’s challenging real estate market.

The cooling housing market in Danville, San Ramon, Dublin and Pleasanton coupled with the effects of the upheavals in the loan industry have combined to position move-up buyers into their strongest negotiating position in the TriValley area in the last 12 years or so. Though housing prices have not fallen significantly in this part of the East Bay, housing sales have cooled - see the charts.

The greatest asset a move-up buyer can have in this volatile housing market is a professional real estate agent with the following:

• Strong Negotiating Skills
• Intimate Knowledge of the Area
• Concise Understanding of Current Real Estate Trends and Conditions

Bringing together the assets of a move-up power buyer and a skilled real estate agent can result in significant savings on price as well as producing other concessions on the part of the seller that add up to increased bang for the buyer’s buck.

Some of the incentives we are seeing these days in San Ramon Valley real estate are:

• Seller paying for more repairs
• Seller paying for upgrades
• Seller paying points on loan
• Seller offering “get-away” trips for buyer

Move-Up buyers interested in purchasing a new home from a builder can also benefit from using a professional real estate agent with experience in new home sales. These agents know the game new home builders play with buyers. Agents with new home sales experience can often get a buyer the house they want with upgrades they didn’t know they could ask for.

Needless to say, our team covers all of these bases. Check out our skill set and give us a call to help you take advantage of this incredible market opportunity for move-up buyers in the TriValley area of the East Bay.

The timing is perfect for move up buyers in Danville, San Ramon, Dublin & Pleasanton, CA.

Some homeowners are missing the boat on taking advantage of current market trends and conditions that have created favorable circumstances for move up buyers.

Home prices in the San Ramon and TriValley areas are fairly stable, though many homeowners are still having to come to grips with their house price needing to reflect current market value and not the HOT market value of two years ago. It is this hurdle that is stopping many homeowners from making that move up. They are waiting for the market to improve so they can get what they feel they need for their house before making the move.

Here is the missed point – almost all properties on the market are facing the same situation. 

Example: An owner has a house that they are trying to sell for $800K and it’s just sitting there because it needs to be priced at $750K to be at market value. The owners want to hang on to get the most they can so they can buy that new dream house for $1.1 million. But the dream house also needs to come down. Let’s say 10% or $110K.

If the buyer is able to sell their house after the $50K reduction and buy the new dream home for $1 million, they have saved $50K not lost $50K. They can also probably come out ahead even more with greater improvements or repairs than they will have to give on their exisitng home.

Then, there is also the matter of financing and interest rates where additional savings may be possible.

The thing to remember is current market conditions are leaning toward buyers with money and equity. NOW is the time to move up while conditions favor you as a buyer and you can leverage that side of the transaction.

Don’t wait for a more active market to sell if you are thinking of moving up. You may get more for your existing house, but you’ll lose more on the buy side.

It always pays you more to work with a skilled negotiator.