Alameda, CA

In case the buyer is on the fence, and not sure whether or not to jump in and buy now or later

Here's something to think about (Source: Steve Harney's Keeping Current Matters)

Know What the Experts are Predicting for Interest Rates in 2010

If we look past just the price of a home, we know that the buyer will be concerned with its overall cost. We then realize how important the financing component is to the purchase. Where are interest rates headed in 2010? Here is what people in the know are predicting:

HSH & Associates: rates will nudge closer to 6% than 5%
Moody's Economy.com: 6 percent that sounds about right
Washington Post: 6 percent by the end of 2010
Barry Habib of Mortgage Market Guide: It could be as high as 6.5%
Morgan Stanley:7.5 percent to 8 percent

Related articles:

• Morgan Stanley Sees 5.5% Note as U.S. Faces Deficits
• Investors see mortgage rates rising as Fed wraps up buys

And for a historical view of interest rates the past few decades, see:

• National Average Mortgage Rates - Historical Data
• 30-year Fixed Rate Mortgages since 1971

SO....HOW WILL THIS AFFECT THE BUYER?

Scenario: $500,000 purchase price, 1 % loan origination/discount point, conventional loan, in Alameda CA.

What is your estimated PITI (principal, interest, taxes and insurance) payment per month?

With a 5 % down payment, the difference between a 5% interest rate today, to the lowest predicted increase up to 6% by the end of the year is $298/month more or $3,576/year.

It used to be that to illustrate how little or insignificant the difference is in prices, we compared them to the cost of a cup of coffee --- that's when coffee cost mere "pennies".

Today, it's a different story. So let's use Starbucks coffee. A "venti" sized coffee at Starbucks costs about $3.50. So taking the cost of $3,576/year for the difference between interest rates of 5% versus 65, that's 1,022 cups a year or nearly 3 cups a day.

Extended Home Buyer Tax credits

And...let's not forget that qualified buyers may receive tax credits if they are in contract by April 30 and close by June 30, 2010:

• First time home buyer tax credit: $8000 tax credit
• Move up/repeat buyer tax credit: $6,500

Hmmmm .....

Our fabulous island city of Alameda CA where we have just just 70,000 residents, we like to think that properties here "hold their own" and that we are somewhat insulated from the economic upheavals that affected the surrounding cities the last couple of years.

DISTRESSED PROPERTY. WHAT'S THAT?

So it was surprising to see many distressed --- foreclosures and short sales --- properties sold this year between January 1 - December 30, 2009. Looking at residential sales of condos, townhouses, duets and detached single family homes, here's the story:

• 427 homes sold in 200
• 58 were REO (real estate or bank-owned) or 3% of total
• 89 were short sales in 21% of total

These 147 distressed properties constitute 34% of total sales in 2009.

OMG!

THE WAY WE WERE

How does that compare to previous years?

So guess what....we're seeing a shift in the sands....

LOCAL MARKET STATISTICS

Our market statistics are painting an interesting picture: low inventory, fewer homes for sale, shorter days on market. With the looming deadline to qualify for the first time and repeat home buyer tax credit, we may see an active market in the next few months.

Low inventory --- it's looking more lika a seller's rather than a buyer's market.

Days on market --- the listings stay on the market for a shorter period of time than they did two years ago.

Under contract --- September 2009 recorded the most active month in the last two years.

Never said I was an early adaptor ...but I'm never one to shy away from trying new things. That's why I'm on Active Rain. Baby steps....

When I got the listing for Alameda's first GREEN home, I did my due diligence and contacted several videographers via their respective websites. I also contacted Jeff Brooks from videofishbowl.com after he made a presentation at an Inman conference in San Francisco earlier this year. I liked his pitch and his style. His video is not like the others I've seen. It's peppy, exciting, fresh. Jeff was the first to respond. And soon after, we communicated via email. The others? Terrible response time and extremely poor follow up.

Jeff is good to work with. He is patient. He is resourceful. He is creative. Best of all, he listens!

So here's his production. He even went ahead and posted it on youtube!

ONE OF THE BENEFITS of holding open house

....is when the neighbors come to see your listing...

...then ask questions about how THEY can sell their own home and how much they wlll get for it.

Today, in spite of the gloomy skies, the occasional drizzle, and the cold air, there were at least 14 groups of people who came to see Alameda's first GREEN home. It was very satisfying to show them the various green technologies and features of this totally eco-friendly home.

Although the number of people didn't equal the record 70-80 groups that came through on some of my other open houses in the summer, this is a welcome figure.

Sure, some neighbors came. That's par for the course.

But when one of them invites you to come see his house because he's thinking that he may want to sell too....well, that's a huge plus!

NEIGHBOR MAY SELL (and buy, too!)

So after my open house, I dropped by the neighbor's place. He gave me a tour, and told me what he would like to do in the near future; downsize by buying a smaller house, and selling the one he has.

We talked about what he needs to do to get top dollar for his property. I reminded him of the value of staging. Heck, even fixers can be staged

He thanked me for my time and suggestions, and we promised we'll stay in touch.

This homeowner will be on top of my list of prospects, and will receive regular communiques from me via personal note and monthly newsletter as part of my Customer Appreciation Program (CAP) per Buffini and Company.

That's one terrific lead!