Housing affordability for Santa Clara County

How is the housing affordability for Santa Clara Valley? Please see the following chart. Santa Clara County is high in the second tier for housing cost, slightly behind the first tier of Marin, San Francisco and San Mateo Counties. This helps explain why the (national) housing market reported by the media many times does not apply to our area’s housing market.

Silicon Valley Association of Realtors recently issued a consumer alert on Fraudulent rental advertisements.  Some realtors have reported that their listings became the targets of this type of scam.

Some con artists using various websites advertise a house for rent, when the vacant property is actually for sale.  Prospective tenants who called the con artists are asked to provide an application fee and rental deposit immediately if they wanted to lease the property. 

The Department of Real Estate has issued similar warning in the past about the Impostor Landlords.  However, such scam is getting rampant in the Bay Area.  Here are the tips to protect the prospective tenants from this type of scam: (below are from SILVAR, Silicon Valley Association of Realtors.)

• Ask anyone offering a house for rent to provide you with proof that they own the house, and to show you their government issued picture identification. Then scrutinize the proof of ownership, as well as the identifications since there is also the risk that their identifications can be false.

• If you think that you are dealing with an owner’s/landlord’s representative, you should check with the DRE to see if that representative or agent is licensed. This is because a real estate license is required, with some narrow exceptions, for a person to offer a house for rent as an agent of the owner. Check the license records on the DRE website (www.dre.ca.gov) and make sure you are working with legitimate licensees.

• If you are an existing tenant, you should check with the County Recorder’s office to verify the property’s owner of record. If the house has been foreclosed upon, you should contact the new owner and verify with the current owner the person to whom you should be forwarding your rental payments.

If you feel you have dealt with a scammer in the area of a housing rental or have been defrauded in connection with rental of a house, please contact the DRE at the following numbers: For Spanish-speaking consumers, call 1-877-DRE-4321; for consumers in the Bay Area, call (510) 622-2552.

The West Side story

Here is some national news:

• ·         Consumer confidence is up in February;

• ·         Foreclosure starts – or when a lender files paperwork to begin the foreclosure process – jumped 28% in January compared with December.  And foreclosure sales jumped 29% in January; and

• ·         The number of “underwater” borrowers has increased from 10.7 million to 11.1 million.

However, if you are the fortunate prospective buyers for the west side of Silicon Valley, like Saratoga, Palo Alto and Los Altos areas, you could be dumbfounded to find a very different phenomenon in the real estate market.  The local market condition of these areas is extremely low with housing inventory (supply) while the demand is going up fast, especially with Facebook’s IPO and some foreign cash buyers.

Since the turn of the year 2012, these areas have seen many multiple offers and offers higher than listing price.  A recent house in Palo Alto was sold with $500K over the asking price!

Again, the Silicon Valley real estate market is definitely not synchronized with that of the rest of the nation.

To increase the competitive edges for non-cash buyers

January 26, 2012

We just listened to the President’s State of Union speech and heard the promise that the Fed will not increase the interest rate. This is good news for homebuyers when competing offers with all cash buyers.
For buyers who need to get financing for their purchase of property, they should start the loan application earlier in the process. Due to the lower interest rate and more ensuing re-financing, the banks usually take longer to process the applications, loan documents and the actual funding.
Yes, this may sound unreal in the time of recession. However, due to low inventory in areas from Saratoga to Los Altos and Palo Alto, an active buyer may be writing an offer on a property with few other offers. In fact, these areas have had such phenomenon for a while. In many cases, buyers who need financing have been competing with cash buyers.
One issue that’s hard to change is the time for closing. Many cash buyers can close a transaction in 3 days after approving the conditions and title of the property. Normally lenders cannot do appraisal, issue loan documentation and fund in such short period of time. To expedite the closing time, buyers can start going through the loan process and save time for funding. This will increase their bargaining chip in the event of competing with other buyers for the property of their dream.