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Have Campbell Home Prices Hit Bottom?

August 27, 2008

Time to Get In The Game?

Over the weekend someone asked me if we’ve hit bottom – and I paused.

The challenge of playing the real estate market, like the stock market, is that it’s only after the price goes back up that we can look back and ogle at “the bottom”. My listings are getting more activity, there’s less negativity in the market, financing is becoming available [more difficult than before but possible], we’re happy to have gas under $4 [isn’t that crazy!] It “feels” like we’ve already hit bottom and are coming out of it. I have a couple statistical reasons for you to ponder;

1) Sales per month have more than quadrupled. The number of sales per day dwindled to 338 completed sales in January contrasted with 1184 for the month as of 8/22.

California Realtors report homes selling more quickly – Pacific Business News (Honolulu):
In Santa Clara County the median price was $706,500, compared to the year-ago period’s $852,500. Sales were up 2.8 percent in the year-to-year period.

2) OFHEO numbers show the national decline to be slowing with the San Jose Metro declining 8.33% since the second quarter of last year.

RATE OF HOUSE PRICE DECLINES SLOWS IN
SECOND QUARTER

WASHINGTON, DC – U.S. home prices fell in the second quarter of 2008
according to OFHEO’s seasonally-adjusted purchase-only house price index.
The index, which is based on data from home sales, was 1.4 percent lower on
a seasonally-adjusted basis in the second quarter than in the first quarter.
This decline was less steep than the 1.7 percent decline in the prior quarter.
Over the past year, prices fell 4.8 percent between the second quarter of 2007
and the second quarter of 2008.

For my last bit of non-empirical evidence; my investors are buying! When an investor can buy San Jose real estate with 25% down and break even, they come out in hordes! And they are! We’ve gotten some great bank owned property, foreclosure inquiries are on the rise and we’ve been out bid on a couple properties as other investors are beating us to the punch.

There’s only one way to make money in real estate. You gotta get in the game!

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