"Market Still Good..." Colleen Badagliacco

Silicon Valley Still Good Market, Realtors Just Need to Bring Information to Buyers

Despite reports that Bay Area home sales are at their slowest pace in 15 years, many markets in the area are doing well and now is actually a good time to buy a home, California Association of REALTORS® President Colleen Badagliacco told SILVAR members at Monday’s Menlo Park/Atherton District Meeting.

“Bad news gets eyeballs. … It’s turned out to be a media cycle drama and Realtors just have to have a conversation with consumers and bring the numbers and information to them,” Badagliacco said.

While there are areas in the state that are experiencing a downturn in home sales, Badagliacco said Northern California, particularly Silicon Valley, is actually leading California’s housing market. Only a relatively small portion of Silicon Valley is affected by subprime lending problems and foreclosures, compared with the rest of the state, she said.
Badagliacco noted, unlike the economic slump in the 1990s, where the state experienced massive job losses, “the bottom line is that we are adding jobs and the economy is strong. We know that things are not that bad in Northern California.”

The demand for housing is still strong overall in California, but negative news about the housing industry has intensified market uncertainty, forcing more buyers, sellers and lenders to the sidelines, said C.A.R.’s president.

Badagliacco said the market continues to have four strong groups of buyers: seniors, who have a long history of buying homes and are in the market to sell their homes, buy new homes and perhaps downsize; the boomers, who have a strong history with real estate, have lots of money and are seeking secondary homes for investment or vacation purposes; and Generation X and Y, who have seen the market go straight up, but are hesitant to make an investment.

“This is a time to have a conversation with Generation X and Y,” Badagliacco told SILVAR members. “Real estate is an excellent investment, but if you plan to flip the house in a few months, maybe you ought to rethink your strategy. As rents increase, you need to take a closer look at the renting versus buying equation. If you can save and build some equity, you should take advantage of the softer market.”

Badagliacco also advised Realtors to use this time to improve their skills and become more astute with new technology and the Internet, upon which Generation X and Y rely. She said Realtors would do well by establishing interactive Web sites, utilizing online transaction management, PDAs and other up-to-date technological equipment.

“As the world continues to change, when the market turns, who are your best buyers? Generation X and Y, the first-time home buyers and the second home buyers,” said Badagliacco. “You have got to be able to move ahead - even if we’re in a slow market, by upgrading yourself, so you can bring value to your clients and be ready to provide that information for the next generation.”

Realtors need to move forward and learn new technology, she stressed. “Do not be afraid of it; embrace it. Be open to it and the higher the trust level you will have, and you will be ready for the next home buyer who is just sitting there waiting.”

Badagliacco recommended the following readings: Wikinomics by Don Tapscott and Satisfaction by J.D. Powers.

Feds Lowered Rates to 4.75%

Lower Fed Rate Means Opportunities on the Rise

For the first time in more than four years, the Federal Reserve cut its Fed Funds Rate, which directly impacts millions of American borrowers. And while this important decision has many implications, there’s still some debate among experts about what this means to the economy as a whole.

The Federal Reserve meets again in six weeks, and no one is certain how market volatility and inflation concerns will affect their future policy and decision-making.

Bottom line: Take advantage of this opportunity while you still can. Call me right away.

* If you’re looking to capture a lower interest rate for refinancing or buying a home, this could be your best opportunity to do so.
* If you have an Adjustable Rate Mortgage, while this rate cut might help to improve your situation, now is the time to refinance into a fixed-rate loan.
* If you have a Home Equity Line of Credit (HELOC) or credit cards tied to the Prime Rate, the Fed’s cut in the Fed Funds Rate just put a little money in your pocket.

Borrowers waiting for a lower fixed-rate mortgage may be waiting for a long time. The chart above clearly shows how Fed Funds Rate cuts do not translate into cuts in fixed-rate mortgages. In January 2001, the Fed Funds Rate was at 6% and 30-year fixed rates averaged 7.03%. By December 2001, following 4.25% in cuts throughout the year, home loan rates were actually up to 7.07%.

Yes, we may experience some temporary improvements in rates in the coming weeks, but the markets will remain volatile as long as inflation and recession are a possible threat to the Federal Reserve's long-term economic policies.

You Can Find Instructions For Almost Anything

FYI: On The Internet, You Can Find Instructions For Almost Anything: No matter what you want to do, somebody's probably already done it and posted instructions online! But what about when you want a new project, but you're not sure what it is yet? You'll find much more than you bargained for. Some of the projects are ingenious. Others are useful. Some are downright odd. http://www.instructables.com/


"Life is ten percent what happens to you and ninety percent how you respond to it."
- Lou Holtz