Happy New Year everyone.
I spent the day watching the 49ers beat the Rams. And if this is a precursor of how this year will go, it looks like it will be an awesome 2012 for the Bay Area. Go Niners!
The San Jose real estate market is hot. In Cambrian, there are half of the listings we had compared to May of 2011. Listings are selling with multiple offers under the 400K price range anywhere in San Jose. Investors are pumping in tons of cash from oversees and within the US. First time buyers are competing fiercely with investors for a shot at being a homeowner.
The same is true for other areas in San Jose. In Santa Clara County, there are are only approx 2100 condos and single family homes for sale as of Dec 23rd 2011. This is the lowest it has been for years. The low interest rates and the low down payment FHA programs make it affordable to buy right now.
Investors see a window of opportunity that may not last too long. As a native San Josean, I have not seen the chance to make a positive cash flow on investment property like this in a long time. The rents in San Jose have gone up 30% in the past 2 yrs and they will continue to go up. People who are losing their houses due to foreclosures are scrambling to secure rentals right now. Demographics show that young adults will be leaving college and their parents home and enter the housing market looking for rentals. Meanwhile, the number of new housing developments has slowed down tremendously the past few years in San Jose due to the economy. So I believe that the already tight rental market will get worse for renters this year. Expect rents to go up even more in 2012.
Recently, I have had many calls from potential buyers who have a foreclosure on their record in the past year or so. They tell me they want to buy and NOT rent. Why would these folks want to buy after they have gone through a short sale or foreclosure? Because these people don't want to throw money away. Just because they were in a bad investment and got out of it, doesn't mean that they never want to buy again. They know that if they don't buy something now when prices are low, they will end up making someone else's mortgage payments in the future. You can't get rich by paying off someone else's investments. You build wealth by setting yourself up with good investments and real estate should still be in your wealth building portfolio.
If you need help sorting through your real estate situation, please call me at (408) 460-8401. I would love the opportunity to speak with you.
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1 comments:
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