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Brendan Aiello

The Aiello’s Peninsula Real Estate Market Write-Up

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This week’s real estate statistics are interesting! Check out the amazingly positive trend line for the Pending Sales. While a portion of that number is due to longer closes of escrow primarily from Short Sales or new lending delays, I’m feeling that the majority of that increase is merely due to increased demand. Several factors may be influencing this demand, including but not limited to: The upcoming expiration of the $8,000 Federal Tax Credit, Consumers believing that we are at or may be close to the bottom in some price categories, some very good values, there are a lot of cash buyers particularly in the entry level pricing and historically low interest rates.

As I mentioned last week, typically Belmont and Burlingame have approximately the same amount of units in each of the Statuses. While this trend remains consistent in the Pending and Month-To-Date Closed statuses, the Active listings in Burlingame are now nearly double of those in Belmont.

One of the things that my weekly survey helps me with is to get a visual of where the price ranges are of “what’s selling” in each market place. Generally, there is some consistency from city to city, status to status (Pending and Solds) in the price ranges. Look at the difference between those prices and the Listing Prices. The Pendings and Solds give a clearer picture of what price ranges are selling. It’s a good tool for determining the desirability and marketability of a property. Again, take Belmont for example: The median active list price is $949,950. The median pending list price is $799,000. That’s a large difference. So my theory is that if you have a home with an actual value in the $799,000 range, your chances of getting an offer on it relatively quickly are quite good.

Lastly, I wish I could claim credit for these following statements, but it was Avram Goldman, President of Pacific Union, who said this and the simplicity of it is brilliant.
There are two factors that influence a quick sale of a property. The first is Immediate Emotional Appeal (I.E.A.) This is when a property is brought into the market fully prepared to “wow” a buyer. They fall in love with the home emotionally. The second factor is Immediate Value Appeal (I.V.A.). With all of the pricing information available on the internet, buyer’s can walk into a house in a market they are familiar with and know the value the minute they walk into the home. Sometimes buyers know this better than some agents, because the buyer may be focusing on a very finite marketplace, either by location, price, or home configuration and amenities. So here’s what happens: The buyer walks in the home and falls in love with it. If, in their heart, they feel the home is worth $1,000,000 or a little more. The home is priced at $1,150,000. The buyer will think, I love that house, but I’m going to wait until the first price reduction. It they walk into that same home and it’s priced at $950,000 (the lower end of its value price range), they think; “I love that house and it’s a deal. I can’t wait because someone else is going to buy it.” Then there is a higher possibility of getting multiple offers and doing one, or both, of two things: drive the sales price up (usually not to the ultra high levels of our former market) and/or generate an offer with very clean terms.

That’s it for now! But, you can bet that we will touch on the IEA and IVA factors on a seperate blog post in the near future. Enjoy this weeks stats!

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Brendan Aiello

Real Estate Report: Burlingame’s Active Listings Rise

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Good Morning Readers!

Well,  I don’t really have anything new to report. As said the past few weeks, pending sales are considerably higher than the previous three years, we believe mostly because of lender delays either as a short sale, or approval of new financing.
 
However, one glaring satistic is the number of Active Listings in Burlingame.  Quite high for that community.  Typcially Burlingame, CA and Belmont, CA have approximately the same amount of inventory in each of the Statuses. This week that generalization is true for the Pendings and Solds.  But, the number of Actives in Burlingame are significantly higher than Belmont.

That’s my tidbit for this weeks real estate statistics. Enjoy!

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David Tapper

It's impossible to under price your home!

How many times have agents told their clients the worst thing they can do is to OVER PRICE their home? Too many times to count!

 Of course the sellers always say; “Well, we can always come down.” Or, “let”s list a little bit over what we want and then we will have room to negotiate”.

 When I tell my sellers that another way of doing it is to under price their home, the first thing they say is what if no one makes an offer, or what if I don”t get the “right” price?

 My response to this is casino it”s impossible to under price your home.  If it”s that good of a deal, buyers and their agents will flock to your home and you should receive multiple offers.

 That is, as long as you market the home correctly, it”s impossible. Why? Let me explain. If you were to under price your home and no one made an offer, then you wouldn”t have gotten offers if the price was higher either. Isn’t that right?

 As a matter of fact, if you are truly under pricing your home, then your home should sell for over the asking price by the simple rule of supply and demand.

 

NOTE: As a listing agent, I would prefer my sellers got offers they didn”t like and be in a position to make counter offers, rather than have it over priced and sit on the market with no offers at all.

 Read my blog on “Should I counter a low ball offer”?

 

Cheers,

Tap

Brendan Aiello

Our Weekly Real Estate Market Report

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The number of Active listings continues to be higher at this time than the three previous years, however, lower than last Sunday.
 
Pending Sales are higher at this time than the previous three years continuing the trend of the past few months.  I do believe that this number is attributable to higher sales volume, but is skewed by the longer time escrows are taking to close due to lender-related issues.  I expect the lender-related delays to increase in light of the new required disclosures as of July 30, 2009.  Escrow periods will be longer because of these required disclosures. While 30-day escrows are still somewhat possible, 45-day escrow periods are more realistic.  Sellers, Buyers and Agents should base their expectations on the more realistic number to avoid unnecessary stress.
 
I did something a little different this week in an effort to determine the heatlh of each of these markets.  I took the total number of properties in the Active and Pending statuses and got the percentage that were pending.  The higher the percentage, the more sales activity relative to the total inventory.  Here’s how they fared:
 
Foster City: 53%
San Mateo: 47%
Belmont: 42%
Burlingame: 27%
Redwood Shores: 23%
Hillsborough: 20%
 
Hillsborough was a lot lower last week, but this week had 5 pending sales.
 
August Month-to-date Closed Escrows are lower than previous 3 years and, again, I believe attributable, in most part, to lender-related delays.

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Brendan Aiello

High Pending – Low Closed. Why?

The number of Active listings continues to be higher at this time than the three previous years, however, lower than last Sunday.
 
Pending Sales are higher at this time than the previous three years continuing the trend of the past few months.  I do believe that this number is attributable to higher sales volume, but is skewed by the longer time escrows are taking to close due to lender-related issues.  I expect the lender-related delays to increase in light of the new required disclosures as of July 30.  Escrow periods will be longer.  While 30-day escrows are still somewhat possible, 45-day escrow periods are more realistic.  Sellers, Buyers and Agents should base their expectations on the more realistic number to avoid unnecessary stress.
 
July Closed Escrows are lower than previous 3 years and, again, I believe attributable in most part to lender-related delays.  There also appears (not verified) to be a higher number of transactions falling apart.  From my experience and networking with other real estate agents and managers they stem from:

1.) Properties not appraising at purchase price (likely result of the new HVCC and out of area appraisers)

2.) Buyers trying to negotiate unrealistic repairs or credits based upon due dilligence inspections and believing the market is worse than it is

3.) Sellers, believing the market is better than it is,  not willing to accept realistic repairs or credits requested by Buyers

4.) Buyers not qualifying for loans due to last-minute requirements by lenders not related to appraisals

5.) Buyers remorse. Possibly influenced by the media or other sources that the market has not hit bottom and they possibly paid too much.

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