All reports point to Bay Area real estate getting back on its feet and recovering quickly compared to other parts of the state and nation. One real estate advisor claims even with its shortage of inventory, the Bay Area market's future is rosy.
Speaking to members of the Silicon Valley Association of REALTORS® in Palo Alto, Bay Area real estate expert Carole Rodoni said the region has all positives going for it. The San Francisco Bay Area is the gateway to the Pacific Rim, a vibrant financial center with excellent higher-learning institutions, diversity, a healthy international environment, and will always have an appeal because it "breeds the creators." She expects a slew of companies to go public this year.
"Silicon Valley is an entrepreneurial creative environment. Half of every job created is in this area," said Rodoni.
Rodoni reported all housing market indicators for the region did extremely well across the board in December 2012. Home sales were up 4.5 percent from the prior year. The median price was up 32 percent from December 2011. Rents have increased by as much as 9.9 percent, outpacing the nation. The average year-over-year rent increase in the Bay Area was about 7.8 percent in December.
"No matter how you look at it, real estate is alive and doing extremely well," said the former president of Fox and Carskadon Realtors, COO of Cornish & Carey Real Estate, President & COO of Alain Pinel Realtors, who is now president of her own consulting firm Bamboo Consulting.
The lack of inventory has resulted in many multiple offer situations, and in many instances "price is whatever the buyer is willing to buy and the seller is willing to sell." In some areas, potential buyers are not even allowed to tour a unit unless their starting offer is in a seller's price range.
Rodoni dismissed the notion that the market is experiencing a bubble. A bubble is anything artificially inflated in value and size. She said buyers are buying today because of the great affordability due to the historic low mortgage interest rates and reasonable home prices. It's why many foreign buyers are coming to the area and buying property.
Today's market has different players, said Rodoni. Buyers today are qualified and plan to stay in homes they purchase longer, at least five to seven years. She expects investors to hold on longer to properties, as well.
Rodoni told REALTORS®, "Real estate is about building wealth." This is how it should be sold to today's buyers. She explained with record low interest rates, more of a monthly payment goes to principal, so homeowners are able to build wealth sooner.
The real estate guru described the Bay Area housing market as "a rolling wave of real estate markets with currents underneath." The market has different neighborhoods, each having its own identity and character. It is important for REALTORS® to know their local market and show buyers how they can build wealth by buying property today, she said.
The Silicon Valley Association of REALTORS® (SILVAR) is a professional trade organization representing over 4,000 REALTORS® and Affiliate members engaged in the real estate business on the Peninsula and in the South Bay. SILVAR promotes the highest ethical standards of real estate practice, serves as an advocate for homeownership and homeowners, and represents the interests of property owners in Silicon Valley.
The term "REALTOR®" is a registered collective membership mark which identifies a real estate professional who is a member of the National Association of REALTORS® and who subscribes to its strict Code of Ethics.
Variations of this article have appeared in local area newspapers.
For further information, please contact Rose Meily at SILVAR Public Affairs, email , or phone (408) 200-0109.