Welcome back readers to my San Jose Real Estate blog!
I thought I would entertain you today with a new heads up trend that I have been noticing while conducting comparables and looking for homes for sale in San Jose for my customers.
You are by now probably familiar with the notion of the "Double Dip" of the US housing market.
In simple terms, the economic recession (following Wall St. collapse in particular) and the mortgage crisis back in early 2008 caused home prices to dip severely and triggered in particular the first wave of short sales and foreclosures in San Jose and the Bay area. The housing market recovered and somewhat stabilized as federal help kicked in through the enactment of the Housing and Economic Recovery Act (Housing Assistance Tax Programs, FHA Act, HOPE, etc).
However, as most government-funded tax breaks expired in 2010, the housing market went through a second dip, amplified by the large inventory of short sales and foreclosed homes driving prices down. The distressed property market then stabilized at the end of 2010 as a result of the federal investigation into banks' 'Robo-Signing' practices.
The current trend I am now observing is that REOs homes are back for sale on the real estate market of San Jose. Short sales still account for the largest proportion of homes for sale in certain neighborhoods of San Jose, but the second wave of REOs is now coming on the market. As you may have read in my latest tweets
, only 40% of short sales are approved overall, which leaves many home owners unfortunately in foreclosure.
What this trend means for the San Jose Real Estate market is:
1. the economic recovery in the Bay area is acknowledged by lenders who are seeing an increase in mortgage requests (also thanks to historically low interest rates), thus potentially a higher demand for homes in the Bay Area
2. lenders have restarted processing both short sales requests and foreclosures and are unloading bank-owned homes they held on to to avoid depressing prices even further.
What this trend means for you as a potential home buyer in San Jose:
1. higher supply and selection of homes for sale in many areas of San Jose and the Bay Area
2. higher probability to grab homes at floor prices, including many TLC homes ideal for real estate investors in Silicon Valley, one of the safest real estate havens in the US.
Comments and feedback from Real Estate folks welcome!
© Sophia Delacotte CDPE, SFR, CHS
San Jose Realtor
Cell: (408) 717-2575