A look at Tri Valley Homes and a look at Pleasanton Home sales are not the same as the broad Bay Area home sales. We can all agree it’s all about location. A Dublin Ranch Condo will not react in pricing the same as a Pleasanton Condo, because of location. So when a recent report says… “the largest increase in month to month sales in 20 years was reported by Data Quick on Tuesday. And Bay Area Homes increased 33 percent last month from March, compared from April ‘07 sales were down 14.2 percent so is it indicating a bottom as some are saying?” We need to dig.
Yes, numbers are up and we can agree that Pleasanton Home values will rise and the price someone paid for a Dublin Ranch Condo will go up, but when.
I believe we are at the bottom, here is why.
RENTAL MARKET
When I have a client looking for a rental I feel like it is 2004 when I chased the truck with the for sale sign posts in the back of it to see what home was going on the market. I had a Pleasanton Home up for lease at $2,300 by the time we rented it out it went for $2,450 a 7% increase. By the time we reach Spring ‘09 will a home like this be close to $3,000? Some already are. Sooner or later it costs more to rent than buy and housing prices will go up.
MULTIPLE OFFERS
Not all homes see multiple offers, but the quality homes are. Quality I will define as good price, upgraded, location. Lets not forget ‘deals’ get multiple offers and the last 2 offers I have written for one particular buyer have both been one of seven offers. Currently we are seeing some areas like the Dublin Ranch Condos not being able to appraise at final bid price. There are a lot of buyers out there, but even less quality homes.
LENDING GUIDELINES
One of the problems is the ability to get a loan. New guidelines are going to help over time and in the Tri Valley with higher than the national $220,000 median price we need it. As soon as guidelines swing the other way and loosen up, more people will be able to buy and prices will even out.
SHORT SALES & FORECLOSURES
While this is seen as a negative, remember these people need to live somewhere and rental prices are being pushed up because of these sales. Eventually people who are renting and waiting for the right time to buy will do so when the cost of buying a home and rent they pay are close. Also as soon as pricing stabelizes and even out, these current renters will jump and become buyers. They are just waiting.
NEW CONSTRUCTION
The only builders selling new homes are the ones who have had a long term plan. Sorrento in Dublin Ranch has been planned for years, but they are holding off on completing the entire project for a few years. This means there are less new homes to purchase down the road.
POPULATION
People need to live somewhere and the increase in population from the obvious local increase of kids buying homes is one reason as well as the immigration for other countries. Lets not forget, most countries have booming economies and people are coming here and buying homes. The Bay Area has for years been a draw because of good jobs too.
Overall, people will only wait so long until they say, now is the time! But when is the time? We will only know it’s the bottom once it passes us, but the above points all lead to a turning in the market and correction upward in the coming years.
Do you believe the market is here?
