It’s a relentless assault — and one that comes compliments of CNN, MSNBC, and Fox News. You don’t have to linger on any one of these channels for long to appreciate the fact that we are in the single worst financial crisis since the Great Depression. It’s hammy and cliched, but it’s true. You don’t have to look farther than the most recent California Association of Realtors (CAR) report on home sales. The bottom line? We’re in trouble. Big trouble
Don’t believe me? If you need a place to hole up and conduct a little research, then book a room in any hotel Los Gatos or San Francisco or LA has to offer and see for yourself. The CAR reports a drop in median home prices of up to 35%! That’s a staggering number — and one many homeowners are not going to be able to bounce back from. For folks who bought homes in 2006, 2007 and 2008, they may have paid the highest amounts for homes the market will see for the foreseeable future.
The real estate market is on its head. Long gone are the days of “buy low, sell high.” Now, the paradigm has shifted to the point where it’s upside-down. Like many adjustable rate mortgages, the market is now underwater and completely inverted. For the would-be homeowner, now is the time to troll through the wreckage of the market and find that gem for a steal. From bank foreclosures to desperate sellers, buyers can essentially name their price. For sellers, this is simply a terrible, terrible nightmare.
Putting the Bay Area under the proverbial microscope, we can see how devastating this market has been for owners and how wonderful it has been for buyers. While the City by the Bay has traditionally been resistant to market values, it has taken a 4% hit in home values. While this may not strike many would-be owners as a big deal, this is just the tip of the iceberg. Moving out to the neighboring city of Vallejo, the median value has dropped by a phenomenal 37%. When you consider the fact that Vallejo is a bedroom community to San Francisco, you can see why so many buyers are opting to pay $200,000 for a new home in proximity.
Why would you pay for the privilege of living in San Francisco when you could live fifteen minutes away for a fraction of the cost. Therein lies the rub. Sellers, who are saddled with a $1.2 million mortgage are trying to dump their homes and are having to to either stay put or sell for $100,000 or $200,000 less. They’re losing money and buyers, hungry for the best deals and able to have the pick of litter, have no incentive to pay more. These are strange days, indeed.
The thing about the Hotel Los Gatos is that its name conjures the sweet sensations of the Tollhouse cookies of your youth! Reserve your room online today!
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