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REALTOR®: Cooling Market, but Silicon Valley Alive and Well


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Wednesday, September 26, 2007

"Silicon Valley is alive and well," Carole Rodoni, a highly regarded speaker, author and advisor in the Bay Area real estate industry announced at a Silicon Valley Association of REALTORS® tour meeting last week. The former president of Fox & Carskadon Realtors, COO of Cornish and Carey Real Estate, president and COO of Alain Pinel Realtors, who is now president of her own consulting firm, Bamboo Consulting, said unlike other areas in the state, Silicon Valley has everything going for it.

"There's great diversity of employment, this area is financially stable, and our economic numbers look best in the nation," Rodoni said. "We are the gateway to the Pacific Rim for emerging markets like China. Economic-wise, we are looking at a very positive picture, which will help, despite the cooling housing picture we are facing."

Rodoni told Silicon Valley Realtors to expect a cooling housing picture and noted, price corrections will come, but it is just part of the real estate process. "We are in a housing correction, with a cooling market that will most likely continue through 2008," said Rodoni. "It's a normal real estate process. We've seen real estate go up and down. This time, it will last longer because we've seen a seller's market, which normally lasts 18 months, extend to over five years."

As appreciation rose by double-digit figures during the recent housing boom, Rodoni explained property values rose too quickly, but not at their true value, and now, the market is due for a correction. Rodoni said a market correction will not spell disaster for Silicon Valley because the area's share of subprime lending is small. She indicated there are other places that are "really suffering," like parts of Florida, Detroit, Las Vegas, and California's Central Valley.

It's a good time for buyers, but buyers should be prepared to face more conservative mortgages lenders, said Rodoni. "Some are demanding 700 to 800 FICA scores. Forget the zero down - 10 to 25 percent down, maybe. Expect conservative appraisals and lots of verification and documentation."

However, in the long-run, the conservative demand of banks may be best for buyers. "You (the buyer) are still in a safer area with your money in the deal now … Land is a limited reservoir and we know actual value appreciates," she said.

Sellers should, in turn, be realistic and realize today is not yesterday's market. Rodoni told Realtors, "Get smart about how you price homes. Sellers love to live in a rear view mirror. Tell sellers they need to associate pricing with timing."

She said sellers also need to be flexible, unless they want to face a variety of inspections, loan contingencies and more concessions. In this type of market, sellers need to crate an opportunity for buyers. If sellers choose to wait it out, they need to assume that the price of their property will decline.

Rodoni predicted, at least for the near future, the Valley will most likely have "a flat market that's holding decent, with a lot of uncertainty. … It's not a disaster. We will get through this because it's God's earth, and everyone wants to live here."


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.

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