On November 17th, Congress passed a bill, which included an increase to the Federal Housing Administration (FHA) loan limit and extension of the National Flood Insurance Program. If the bill is signed by President Obama, the FHA loan limit will be increased to $729,750 for San Mateo and Santa Clara counties and the flood insurance program will be extended until December 16.
The bill, which passed by a 298-121 vote in the House and 70-30 vote in the Senate, did not include an increase to the conforming loan limit. The Fannie Mae and Freddie Mac loan limits for high cost areas will remain at $625,000.
The extension and increase would not have been possible without the organized effort by REALTORS® (National Association of Realtors) over the last several months
Owning a home in Silicon Valley is not an easy task. The local market of supply and demand, especially in west side of the Valley, is not in sync with the rest of the country's economical situation. The extreme of low supply and high demand has made purchasing a home in Silicon Valley very competitive and sometimes tricky. In this blog, bits and pieces of market phenomenon are presented for your information.
Tuesday, November 29, 2011
Wednesday, September 28, 2011
Silicon Valley real estate market is a synecdoche for the U.S.
As I have mentioned in the last post, the normal and healthy ripple effect of real estate market is not back here in Silicon Valley yet. There is low demand for lower priced housing, especially condos and townhouses which require monthly fees; in comparison, the higher end segments are selling quite fast. If the sellers of the lower priced houses are not selling, they can not easily move up to buy higher priced houses. But we do have quite a few higher end house buyers, especially some willing to pay cash.
By reading the article by Associated Press, "Bipolar housing market: The haves and have-nots", we get the snapshot of the whole housing market in the U. S. In many senses, the real estate market in Silicon Valley is a synecdoche of the nation.
By reading the article by Associated Press, "Bipolar housing market: The haves and have-nots", we get the snapshot of the whole housing market in the U. S. In many senses, the real estate market in Silicon Valley is a synecdoche of the nation.
Friday, September 16, 2011
Homeowners' financial hardship
On the left of this blog, I have cited an article from Los Angles Times regarding how high interest rates on some "**under water" home mortgages have drained the financial resources of many homeowners. I do know quite a few of them here in Silicon Valley.
It's quite difficult for these homeowners in this situation. In the case that the homeowners do not intend to walk out of their houses and just want to reduce their mortgage payments by refinancing, they actually are told that they have to bring in cash, sometimes tens of thousands of dollars, to be able to get their refinance completed. This is for those who still have jobs. I understand that some with jobs had elected to opt out of the home-ownership for now and moved on to rent a house. For those who had lost their jobs and income, they would have difficult time reducing the high interest rate.
So I do see a big jump in demand for rentals and the rent, too.
However, there is another phenomenon we are witnessing in Silicon Valley. In certain pockets of the valley where the higher-end homes are, we see slow demand on condos or townhouses but cash buyers are snapping up $1 million to $2 millions homes faster than buyers who have to apply for a loan and have to sell their lower priced houses (with lower demand). I don't know how long this phenomenon will continue. But I think what we see now is definitely the result of the extremity of wealth gap in our society (or our global society).
In the past, the normal ripple effect of real estate market was people buy lower-price house first. Then, years later, they sell their lower-priced home and buy a higher-priced home. The all-cash, first time buyers were only there during the dot-com boom.
Anyway, I do hope we will come back to a more normal housing market. But according this article, it could be a long while...
**under water" mortgage is referring to the mortgage where the house market value is below the amount of loan owed on the house.
It's quite difficult for these homeowners in this situation. In the case that the homeowners do not intend to walk out of their houses and just want to reduce their mortgage payments by refinancing, they actually are told that they have to bring in cash, sometimes tens of thousands of dollars, to be able to get their refinance completed. This is for those who still have jobs. I understand that some with jobs had elected to opt out of the home-ownership for now and moved on to rent a house. For those who had lost their jobs and income, they would have difficult time reducing the high interest rate.
So I do see a big jump in demand for rentals and the rent, too.
However, there is another phenomenon we are witnessing in Silicon Valley. In certain pockets of the valley where the higher-end homes are, we see slow demand on condos or townhouses but cash buyers are snapping up $1 million to $2 millions homes faster than buyers who have to apply for a loan and have to sell their lower priced houses (with lower demand). I don't know how long this phenomenon will continue. But I think what we see now is definitely the result of the extremity of wealth gap in our society (or our global society).
In the past, the normal ripple effect of real estate market was people buy lower-price house first. Then, years later, they sell their lower-priced home and buy a higher-priced home. The all-cash, first time buyers were only there during the dot-com boom.
Anyway, I do hope we will come back to a more normal housing market. But according this article, it could be a long while...
**under water" mortgage is referring to the mortgage where the house market value is below the amount of loan owed on the house.
Wednesday, August 31, 2011
How to keep your home disaster free?
We can spend a lot of time and energy to shop for new appliances, new furniture,and things for remodeling. How about keeping these investments from damages? It may only take a tiny fraction of time and energy for such maintenance of our investments.
Here, I would like to talk about the preventive measures against water damages:
1. Periodically, we should check the water heater tanks, washing machine hoses, dishwashers, refrigerators and ice makers. Make sure they are secure, in good condition and leak free. If there is dripping water or a small leak, fix it right away.
2. If possible, check often the dryness of the crawl space. In summer, we don't get much rain. A wet or muddy crawl space means leakage in the water supply line(s) or the sewer line. It is also a good idea to check your water bills. A sudden jump in water bill could mean that you got leak somewhere in the water supply lines.
3. In Autumn, clean the gutters to prevent backup and/or leakage.
4. When we go on vacation in Winter, try to keep the house heated to certain degrees. This is to prevent frozen pipes and the disaster that follows. It's also important to close interior valves for exterior faucets in the cold Winter.
In retrospect, we will realize that it's much wiser spending $100 to prevent possible disaster, than several thousands (if lucky) to restore the damages after the disaster.
Let's be the wiser homeowners...
Here, I would like to talk about the preventive measures against water damages:
1. Periodically, we should check the water heater tanks, washing machine hoses, dishwashers, refrigerators and ice makers. Make sure they are secure, in good condition and leak free. If there is dripping water or a small leak, fix it right away.
2. If possible, check often the dryness of the crawl space. In summer, we don't get much rain. A wet or muddy crawl space means leakage in the water supply line(s) or the sewer line. It is also a good idea to check your water bills. A sudden jump in water bill could mean that you got leak somewhere in the water supply lines.
3. In Autumn, clean the gutters to prevent backup and/or leakage.
4. When we go on vacation in Winter, try to keep the house heated to certain degrees. This is to prevent frozen pipes and the disaster that follows. It's also important to close interior valves for exterior faucets in the cold Winter.
In retrospect, we will realize that it's much wiser spending $100 to prevent possible disaster, than several thousands (if lucky) to restore the damages after the disaster.
Let's be the wiser homeowners...
Wednesday, August 24, 2011
Some stories of home ownership in Silicon Valley
Buying a house in Silicon Valley is an interesting experience, if you can detach yourself from the financial stress. In reality, you cannot. It all depends on the price range you can afford before you venture out to seek the home of your today's dream.
In my earlier years of real estate sales, I had met too many buyers from out of the State who were in this Silicon Valley real estate cultural shock. The story was usually that they just sold their two - three thousand square feet home with an acre of land somewhere. Moving to Silicon Valley with much higher pays, they were dumbfounded to learn that the most they could afford was a 1500+- square feet Ranch home if they wanted a better school district for their kid(s).
However, Silicon Valley is truly Silicon Valley. It's kind of magical in many senses. Especially when the time plays tricks on us. I have had many clients with technical backgrounds coming to this valley, first living in a one-bedroom apartment; then moving to a 1,000 square feet simple Rancho home; not long after, I was helping the young couples (now with kids) purchase multimillion dollars of homes.
So if you like to hear more good stories, please stay in tune and follow this blog.
Until then,
Sophia
In my earlier years of real estate sales, I had met too many buyers from out of the State who were in this Silicon Valley real estate cultural shock. The story was usually that they just sold their two - three thousand square feet home with an acre of land somewhere. Moving to Silicon Valley with much higher pays, they were dumbfounded to learn that the most they could afford was a 1500+- square feet Ranch home if they wanted a better school district for their kid(s).
However, Silicon Valley is truly Silicon Valley. It's kind of magical in many senses. Especially when the time plays tricks on us. I have had many clients with technical backgrounds coming to this valley, first living in a one-bedroom apartment; then moving to a 1,000 square feet simple Rancho home; not long after, I was helping the young couples (now with kids) purchase multimillion dollars of homes.
So if you like to hear more good stories, please stay in tune and follow this blog.
Until then,
Sophia
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