The bargain basement housing stock is running short in Silicon Valley and this spring could be the last time — until the next boom-bust — to cash in on remaining deep discounts.
February’s listings of available homes on the market – single-family homes and condos – came in at 3,993 down nearly 28 percent from 5,538 a year ago, according to the Santa Clara County Association of Realtors (SCCAOR).
Market conditions put the biggest dent in the most affordable housing supply. The supply of condos dropped more than 33 percent from 1,720 in February last year to 1,146 this year. The supply of single-family homes tumbled more than 25 percent from 3,818 to 2,847 during the same period, SCCAOR reported.
Lower supplies spiked prices. Average single-family home prices increased nearly 9.5 percent from $673,644 to $737,381. The condo price average was up more than 3 percent from $346,701 to $358,352.
Buyers be ready
“This is not a market for the faint of heart,” said Barbara Lymberis, president of SCCAOR.
“Buyers, if you really want a particular home, your attitude must be to win the deal. Sellers, if you really want to sell, price under market, even at 99 percent of market value, and let the buoyancy of the market lift the offers up,” said Lymberis, also with the Perfect Harmony Properties Team at Keller Williams in Campbell, CA.
Neighborworks America, one of the largest community development corporations in the nation said low mortgage rates also provide an opportunity for buyers who can manage to take advantage of what could be rock-bottom times in housing.
Mortgage rates are near record lows and home prices may be within reach of many consumers who want to buy in today’s market,” said NeighborWorks America Director of Homeownership and Lending Marietta Rodriguez.
“But there are more things to consider than low mortgage rates and home prices when your plan is to be a successful long-term homeowner,” Rodriguez added.
• Be mortgage ready. If you haven’t already, check your credit reports from the only federally sanctioned source of free reports, AnnualCreditReport.com, to make sure your credit is mortgage worthy. Looking for a mortgage with weak credit could result in a higher than anticipated mortgage cost or no mortgage at all. Work with a homeownership advisor at a NeighborWorks HomeOwnership Center or other NeighborWorks organization to start the homeownership process. In Silicon Valley, its Neighborhood Housing Services Silicon Valley.
• Know all your costs. More than just a mortgage payment, homeownership comes with insurance, tax, utility, maintenance and transportation costs, among others. Include them in your budget to determine what is truly affordable.
• Know your mortgage. Fixed-rate mortgages (FRMs) offer payment certainty, while adjustable rate mortgages (ARMs) frequently provide lower initial monthly payments, but which could rise considerably over time. Work with a trained homeownership advisor to help get the right mortgage loan.
• Hire good help. Get a licensed real estate agent who knows the market. It’s easy to go digital and browse for housing. Actually going through the process and closing on a home without professional assistance is something else. Ask any FSBO (for sale by owner).
• Take your time. There may be some pressure to get in the market at today’s low prices and interest rates, but if you move too quickly that could be a mistake. Take the time to obtain a home inspection, learn the neighborhood, investigate the school district and buy only what you can truly afford, not a home based on the largest loan the lender will lend.