On a daily basis, I’m asked the question of whether or not now is a good time to buy. With all the talk around foreclosures, falling prices, problems in the mortgage industry and the overall state of our economy, it’s no wonder there is a lot of confusion. Unfortunately, though, there is no single answer that will apply to everyone thinking about buying (or selling, for that matter) a house. Each person needs to evaluate their current situation, their future plans for the property and the terms around the contract they will enter into for that property. At the end of this process, the answer for some people will be “yes, it is a good time to buy” and for others it will be “no, buying a house now is the last thing I should do.” In either case, that’s ok … you need to do what makes the most sense for you and your situation. If you have time though, I would recommend that you read a very good article written by Tom Vanderwell called The Top 7 Things Every Home Buyer Should Know…..

An article today in the Yahoo! Finance section stated that SF Bay area home prices plunge 27 percent in June. Well, that’s pretty bad! However, as you read the brief article you’ll notice that they are talking about aggregate numbers from nine Bay area counties and for the combination of single family homes and condo/townhouses. So, as a person looking to buy or sell a property in one of Contra Costa County’s cities, what does this mean to you? Should you automatically assume that this 27% plunge is the exact impact your market has felt?

I hope you immediately answered the above question with a “no.” The numbers below for six different Contra Costa cities will help show the variance in both year-over-year and month-over-month trends from one city to the next. Real Estate is ALWAYS local. This applies to foreclosures as well as prices … you always need to take national and regional news with a grain of salt because it may or may not be reflective of your local market.

If you have questions about any of these numbers, or would like to see them for a different Contra Costa city, please let me know.

Governor Schwarzenegger signed into law the first major bill designed to curb more foreclosures in California this past Tuesday. The bill is comprised of three main aspects:

1. Lenders are required to provide homeowners with more, and earlier, warnings that they are headed towards defaulting on their home loans.
2. Renters will now be given more time to find new living arrangements when they are evicted by a landlord who is losing the property to foreclosure.
3. Local governments will be authorized to force lenders to maintain vacant property after a foreclosure.

You can read more about the new law in the Los Angeles Times article titled California Senate passes mortgage default warning bill.

Aspects #1 and #3 of this bill have the potential to make immediate impacts on anyone looking to buy a home. By requiring lenders to provide homeowners with more warnings about potentially defaulting, the government is hoping that fewer homeowners will actually default. If this plays out accordingly, it means there will be fewer foreclosures and bank owned (REO) properties coming onto the market each month. This, in turn, means the available inventory of homes for sale will be reduced and the corresponding demand for each house will likely rise … read this as: house prices will go up! Aspect #3 is also likely to increase house prices. By forcing lenders to maintain vacant properties, there will be fewer neighborhoods negatively impacted by REO eye-sores - the property with boarded up windows and a yard full of overgrown weeds. Because of this, distressed neighborhoods won’t have their overall value degraded to the same extent as before … as we all know, nicer looking neighborhoods demand higher prices.

The current inventory of available houses in Contra Costa County is extremely high, and the longer a property lingers on the market the less attractive it becomes. Questions start to be asked as to why no one has already bought it: Is it overpriced? Does it have unseen issues with the roof or foundation? What is causing everyone to pass on this home? Well, as the Washington Post article Freshening an Old Listing, and Other Tips for Worried Sellers explains, some sellers are trying to sidestep this problem by having their property re-listed in the MLS so its Days On Market (DOM) value will reset. The thing to keep in mind, however, is that a good buyer’s agent will do the necessary research to see past this re-listing technique and will evaluate the property for what it is worth based on today’s demand.

Technology can be a fantastic aide throughout your home buying or selling process when used correctly. But, if the information provided by the technology isn’t fully understood, you run the risk of making serious errors or adding unrealistic expectations to your experience. The area I see this most prevalent in deals with evaluating the worth of a home. Sites like Zillow.com and Cyberhomes are two of the more popular examples that I most often hear clients refer to. Both of these sites discuss the short-comings of their estimations - if you use either, it is in your best interest to understand they provide nothing more than a ballpark guess at what the selling price of a home should be. Zillow’s explanation can be found on their Data Coverage and Zestimate® Accuracy page. Cyberhomes explanation can be found amongst their Question and Answer section titled Are Cyberhomes valuations the same as an appraisal prepared by a licensed professional appraiser?