Did you catch the headline in the San Jose Mercury News today? “Home prices’ downward déjà vu.”  (See link, below.)  It quoted Zillow as saying that Santa Clara County is poised for another housing slump in the next few months albeit smaller than the one that we experienced the past two years.  (Heads up — There’s no need to make a run on the grocery stores.)   

  • First, Zillow is generally acknowledged by most real estate professional as unreliable when it comes to dissecting specific markets whether they’re delivering good news or bad.  There’s no common denominator between the different communities in the Bay Area.  Each has felt a different impact in the past two years.  Zillow paints with a very broad brush stroke.  (Better save “Paint” for resizing your photos.)
  • Secondly, if you read far enough into the article (buried on page 10), you’ll see that the President of the Santa Clara County Association of Realtors reported that last week’s inventory of houses and condos was only 2,730 compared with 5,760 for the same time last year.    
  • Unfortunately, the San Jose Mercury News is infamous for burying an opposing view to their sensational headline story on page 10.  Those of us in the real estate business for more than 30 years (having experienced 5 major economic cycles) feel our extremely low inventory of homes should support our existing prices.   
  • Because interest rates are likely to increase this year, buyers are going to swoop up whatever cheap financing they can get their hands on before these rates evaporate entirely (and they will), and the inventory is depleted further.  The higher the rates and the more scarce the loan programs, the more urgent the buyers.  You get the picture. 
  • The economics of any given product is and always has been the balance between those that HAVE and those that WANT, a simple supply and demand factor.       
  • We all know economic factors such as interest rates, buyer rebates from the government, and mortgage-backed securities influence buyers, but in a fair and balanced world we need to acknowledge that:
  1. The market is still driven by supply and demand
  2. It’s entirely possible that the federal government will
    extend some of their financial props as they did last year.
 
Bottom line:  Sensational journalism sells newspapers.  If you want to see how your home stacks up, then your next stop will be two links on my website, www.melaniekemp.com:
 
  • MARKET SNAPSHOT (Actives, Pendings & Solds in your immediate
    neighborhood)
  • MONTHLY MARKET TRENDS (a more global look at sales statistics in your town/county)
San Jose Mercury News link (see Page 1, Section A, Feb 10, 2010): 
http://sanjosemercurynews.ca.ussrv15.newsmemory.com/ee/
sanjosemercurynews/default.php?pSetup=sanjosemercurynews    


Keep your cool.     

MELANIE KEMP 
Broker/Owner
Four Seasons Properties
Los Gatos, CA

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