We all are hoping for a Happy New Year, Happy 2010, the first two-digit year of the 21st Century.
The Palo Alto real estate market in 2009 faced a difficult environment in the aftermath of the financial crisis and during a deep recession. In early 2009, home building and house prices had fallen more sharply than at any time since World War II. Over the course of the year, the Palo Alto market showed no clear trends and no smooth upward or downward movement. Uncertainty was the major driving force behind overall market behavior.
We clearly see two spikes in local housing prices – one in May, one in October. The May spike was justified by government incentives for buying real estate, super-low interest rates and the seasonal real estate activities. The spike of the sale prices in October was hard to explain, the school year started already, so there were no “seasonal” reason in it, and no major events that could impact the local market very positively.
The situation changed daily – the market was literally “pulsating”. Look at the median sale price in Palo Alto over the course of 2009:
March - $1,205,000
May - $1,500,500
September - $1,262,000
October - $1,506,500
What should we expect in 2010? Here is what we hear from different sources:
In “2010 California Housing Market Forecast”, the California Association of Realtors Vice President and Chief Economist Leslie-Appleton-Young projected the median home price in California will rise 3.3 percent to 280,000 in 2010; sales for 2010 are projected to decrease 2.3 percent to 527,500 units -
According to First American CoreLogic’s LoanPerformance Home Price Index, “12-month appreciation for national home prices will be 4.6 percent and that home prices in two of the most depressed markets, California and Florida, will show gains in excess of 7 percent.”
The Wall Street Journal does not share the optimism and points out that possible increase in mortgage interest rates will depress the home sales even more: “… the underpinnings of the positive trends are fragile. The Fed brought down mortgage rates by committing to purchase up to $1.25 trillion in mortgage-backed securities. That program, already extended once, is set to expire in March. …The outlook for 2010 is uncertain, at best.”
Well, let’s be open-minded, positive and optimistic. Let’s watch closely what is happening and respond to the changes fully equipped with professional knowledge and expertise. Home sellers should be well prepared for the market and have confidence in their Palo Alto houses – there is a big demand for properties like yours. Call us for a current evaluation of your house, and to discuss the most effective selling strategies.
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