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Bad Housing Market
Last week, I heard someone complain that the housing market was “bad.” Well, when housing appreciated 10-20% per year, I heard other people complain that the market was “ridiculous.” The truth is that the housing market has never been healthier. Now that the recession has washed away a lot of the speculative excess, housing is…
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Sign of the Times: Not Hiring
Spotted the “Not Hiring” sign during the weekend. You think a few people have already stopped by to ask about job openings? From what I hear, construction work has come to a dead halt. So, any contractor that is building in this economy will be very popular. Anyways, the sign really means a lot of…
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Real Estate Bubble Signs
For those who were waiting for the real estate bubble to pop, the time has come. I recently glanced at some home listings from one ZIP code in San Jose, California. The listings told it all. Short Sale Subject to Lender’s Approval This is a short sale. Price and commission are subject to lenders approval.…
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Private Mortgage Insurance
Something just doesn’t make sense. Even if a bank extended an adjustable-rate mortgage (ARM) to a borrower with imperfect credit and required less than 20 percent down, isn’t the bank “protected” by private mortgage insurance if the borrower defaults? According to the Federal Reserve Bank, PMI is extra insurance that lenders require from most homebuyers…
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Real Estate Bubble
Back in 2001, a person told me that the San Francisco Bay Area real estate market was appreciating too quickly. With thoughts of the dot.com stock deflation fresh in mind, he told me that he had sold his house to lock-in his gains and will be buying a new house once the real estate bubble…
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No Need to Panic
The financial meltdown on Wall Street “is like deja vu all over again,” to misquote Yogi Berra. Somehow, these once in a lifetime or once in a century financial crises keep occurring, well before the century has run out. With 1999-2000 still fresh in mind, we all have some frame of reference for understanding how…
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The Price of a Luxury Home
And luxury homes — properties listed for more than $3.5 million… BusinessWeek just made me laugh. The above quote was from In Silicon Valley, Real Estate Remains Strong. I think a luxury house is one that costs twice as much as the one you currently live in.
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Interest Rate Cut
The Fed’s second interest rate cut in just over a week really confused me. Instead of being merely aggressive, it appeared a bit desperate. Perhaps, the national economy is faring much worse than I had believed. The problem for home owners and real estate investors is that our perspective is often local. Easy to tell…
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Below Market Housing: Buy Low, Sell Low
Would you believe that you can find a place in Palo Alto for under $100,000? Yes, it’s true. Under the Below Market Rate Program, a buyer purchased a 2 bedroom 1-1/2 bath residence for $98,800 back in April 2007. However, to be a qualified buyer, you must meet the Palo Alto Housing Corporation’s income and…
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Location, Location, Location
The problem with living in a desirable location is that everyone else wants to live there as well. Of course, when you visit open houses on the weekend, everything looks great because you never see the grinding traffic that slows down all surrounding commute lanes during the weekday. So, if you are thinking of moving…