Collins: A housing market report from the trenches
The local housing market has been on a wild ride this year. Earlier in the year, the market seemed to be closely following the ups and downs of mortgage rates as the Fed tried to slow the economy and get a handle on inflation with a series of interest rate hikes. Now, as we enter the peak selling season, the housing market seems to be poised for a resurgence. Demand is increasing as inventory continues to be constrained.
For this month’s column, I wanted to reach out to several local Realtors working throughout San Jose and get their perspective from the trenches of what they are seeing.
“Inventory is still a challenge here in Evergreen and East San Jose,” said 2023 Santa Clara County Association of Realtors President William Chea. “While buyers have accepted higher mortgage rates, sellers are a little more cautious, and are hesitant to move since the vast majority have locked in mortgage rates below 4%. We saw a brief increase in first time homebuyers earlier this month, especially in East San Jose, who were trying to take advantage of the California Dream for All Shared Appreciation Loan program. Unfortunately, that program’s $300 million in funding was depleted in a little over two weeks.”
Terese Ferrara of Keller Williams Bay Area Estates was recently working with a buyer in Central San Jose, near Fruitdale. At first this buyer was looking at purchasing a townhouse, but ultimately chose to zero in on a single-family starter home. She showed them over 40 different properties and placed offers on eight of them before she finally got them into contract.
“Put your best offer in out of the gate, instead of holding back for negotiation,” she advises. “Otherwise you may never receive that counter offer. You don’t want to lose a shot at your dream house for $10,000 to $15,000.”
Kelly Hunt of Christie’s International Real Estate Sereno also had a similar experience when working with a buyer. She had been working with a buyer since last year for a single-family home in the Cambrian neighborhood. Over that time, the market was really hot and they were constantly getting outbid by $200,000 or more. Kelly suggested that they reset expectations and start looking at homes a little bit below their price range so they could put in more aggressive offers that were still in their budget. Ultimately, her clients landed a wonderful home in the Meridian and Hillsdale area.
Joe Brown, also from Christie’s International Real Estate Sereno, has been working with a buyer that specifically wants to purchase a duplex in the Willow Glen neighborhood or possibly Santa Clara. The properties that they have been looking at have been on the market for quite some time, but the duplex owners that he has reached out to do not seem to be too motivated to sell. Many of the duplexes are in need of repair, with some having $50,000 to $90,000 of deferred maintenance. Joe and his client have made three offers so far, but have yet to strike a deal. For them, the search goes on.
Angie Cocke of Century 21 Real Estate Alliance specializes in the Blossom Valley area of South San Jose. She has a couple of listings that she just recently put on the market and she has been experiencing very busy open houses. Her two sellers are retiring and leaving the area. One is headed to Oregon and the other is headed to El Dorado County. To create a little extra fun, Angie typically hands out scratch off lottery tickets.
“Who knows, someone may hit it big,” she said.
She also recommends always having a lender on site to run all the numbers for potential buyers. Angie said that most of her buyers lately have been young high tech workers.
With the market heating up again it’s essential that you surround yourself with a professional Realtor and lender. Be sure to do your research, as experience does matter. It’s also important to keep in mind that you will be spending a lot of time with this professional through the highs and lows of this process, so find someone that you really connect with on a personal level.
San José Spotlight columnist Neil Collins is CEO of the Santa Clara County Association of Realtors, a trade association representing more than 6,000 real estate professionals in Santa Clara County and surrounding areas. His column appears every fourth Thursday of the month. Contact Neil at [email protected] or follow @neilvcollins on Twitter.