John W. Durbin, Broker, MBA

Silicon Valley Real Estate News - August, 2010

VALLEY REAL ESTATE SNAPSHOT:

July sales of multiple-listed residential real estate in Santa Clara County totaled $930,882,498 vs. $997,304,660 for June 2010 and $1,018,796,713 for July 2009. The average price of single-family homes closed in June was $802,511, up 13.7 percent from $705,718 in December 2009 and up 12.5 percent from the July 2009 level of $713,423. The average price of condo/townhomes closed in July was $403,946, up 0.5 percent from $401,876 at year end 2009 and up 9.9 percent from $367,306 in July 2009. The average sold price was 99.4 percent of list price. Listed homes total 6,660 units vs. 6,480 last month.

SILICON VALLEY ADDS MORE JOBS:

Silicon Valley recorded a net gain of 3,300 jobs in June that marks the sixth straight month of job growth for the Santa Clara/San Benito county region. The valley is still down 6,700 jobs from the level of June 2009. By contrast, California lost 27,000 jobs in June and the U. S. lost 125,000 jobs. Local manufacturing jobs grew by 1,200 of which half came in the computer and electronics sectors. Nonfarm jobs in the Santa Clara/ San Benito county region now total 851,700, down substantially from the June 2008 figure of 921,400. Unemployment totals 103,100 currently. The valley unemployment rate now stands at 11.3 percent vs. 12.3 percent for California and 9.5 percent for the U. S.

GOVERNMENT EXTENDS HOME BUYER TAX CREDIT DEADLINE:

President Obama recently signed into law a bill extending the closing date for transactions eligible for the homebuyer federal tax credit from June 30, 2010 to September 30, 2010. Buyers must have already entered into a contract to purchase their home by May 1, 2010 to qualify for this extension. Without this extension it is estimated that approximately 180,000 homebuyers across the U. S. and 17,700 hombuyers in California would have missed out on the tax credit.

HOME AFFORDABLE FORECLOSURE ALTERNATIVES PROGRAM:

The U.S. Treasury has released guidelines and forms for its new Home Affordable Foreclosure Alternatives Program (HAFA), which provides incentives for short sales or deed-in-lieu of foreclosures on loans eligible for modification under the Home Affordable Modification Program (HAMP). HAFA compliments HAMP by providing a viable alternative for mortgage holders who are HAMP eligible but are still not able to keep their homes. Among the various provisions of HAMP are that it: 1) allows borrowers to receive pre-approval of short sale terms before listing the property on the market, 2) uses borrower financial and hardship information already gathered for a loan modification, 3) prohibits a reduction in agreed upon real estate commissions, 4) requires full release of borrowers from future financial liability and 5) provides cash financial incentives for borrowers and servicers to smooth the transaction.

IMPROVING CONSUMER CREDIT SCORES:

Fair Isaac Corporation has developed the “FICO” credit scoring system used by many mortgage lenders to rate a borrower’s ability to make their loan payments on time. A borrower’s score is made up from: 1) payment history (35 percent), 2) revolving debt ratio (30 percent), 3) length of credit history (15 percent), 4) new credit and credit inquiries (10 percent) and 5) type of credit used (10 percent). The following guidelines are given for improving one’s credit score: 1) Most importantly, pay bills on time. 2) Lower the total debt load. Avoid maxing out credit cards. 3) Keep old accounts open and in good standing. Keep balances well down from credit limits. 4) Open new accounts sparingly. Don’t open accounts that aren’t intended to be used.

EFFECT OF MORTGAGE PROBLEMS ON CREDIT SCORES:

The way that homeowners react to mortgage problems can greatly affect the impact of those problems on their credit scores. Loan modifications that fold late payments and penalties into the principal amount actually can improve a borrower’s scores slightly. Short sales have the opposite effect with credit score declines of 120-130 points often being the result of a short sale. Stopping payments entirely and walking away from the home can result in a loss of 150 points and a negative impact on the person’s credit file for 7 years. Filing for bankruptcy covering all debts may result in a loss of over 350 points off a credit score and can remain on the credit file for 10 years.

RECENT AREA SALES:

4 BR-Pool, Miravalle Av., Los Altos,	-	$1,750,000 Conv. Loan.
5 Bedroom, Afton Av., Saratoga,	-	$1,440,000 Conv. Loan.
3 Bedroom, Loma Alta Av., Los Gatos,	-	$1,240,000 Conv. Loan.
5 BR-Pool, Oakville Av., Cupertino,	-	$1,168,500 Conv. Loan.
3 Bedroom, Sunnylake Ct., Campbell,	-	$ 745,000 Conv. Loan.
3 Bedroom, Cameo Dr., San Jose,	-	$ 756,000 Conv. Loan.

CURRENTLY FOR SALE:

BEAUTIFUL RANCHER - CUPERTINO AREA:

Spacious 3 BR, 2 BA with remodeled kitchen and baths complete with new floors, new kitchen cabinets and countertops, dual-pane windows and new paint. Lovely, quiet neighborhood. Desirable Cupertino schools.- $799,000.

GORGEOUS REMODEL - CAMPBELL:

Beautiful 3 BR, 2 BA ranch style home with extensive remodeling. Features include dual-pane windows, wood-burning fireplace, central A/C and 2-car attached garage. Large lot with attractive landscaping. Price reduced to sell now. - $729,000.

TERRIFIC DUPLEX VALUE - SUNNYVALE:

Attractive 2-unit building located in desirable Sunnyvale area. Both living units are 2 BR, 1 BA with spacious rooms, private patios and separate garages. Building is well-maintained and rents easily. Property is a super investment value at current price. - $599,900.

"HELPING YOUR REAL ESTATE DREAMS COME TRUE!"

FOR PROFESSIONAL SERVICE WHEN BUYING OR SELLING. . .

JOHN W. DURBIN Broker, MBA Phone: (408) 725-0660, Toll free: (800) 980-9544, e-mail: jdurbin1@peoplespc.com CA DRE Lic. No. 00448671