SILVAR  :  Newsroom  : Real Estate Articles

Real Estate Articles

Mild Recovery in 2010, but Better Market than Last Year, Rodoni Tells Silicon Valley REALTORS®

Image about Mild Recovery in 2010, but Better Market than Last Year, Rodoni Tells Silicon Valley REALTORS®
Wednesday, January 20, 2010

2010 will be a better year for real estate, Carole Rodoni, guest speaker at the Silicon Valley Association of REALTORS® first-of-the-year Palo Alto and Los Gatos/Saratoga district tour meetings, assured SILVAR members.

"Last year, it felt like we were falling off a cliff; now, we're hanging on to the ledge and starting to climb out of it," said the former president of Fox & Carskadon Realtors, former COO of Cornish and Carey Real Estate and Alain Pinel Realtors, who now owns Bamboo Consulting Inc.

Here's proof: after having downsized and controlled expenses, businesses are now making a profit; the stock market has come alive again - in fact, Rodoni says those who lost as much as 60 percent of their wealth last year have been able to regain 30 to 40 percent; surveys show positive retail sales of 2.6 percent at the end of last year; and interest rates are still the lowest they've been in over 50 years.

Buyers need to take advantage of the opportunity now because interest rates are certain to tick upward, according to Rodoni. She says buyers have a "window until the end of the year, as they are essentially getting free money right now."

Rodoni says we are bound to see some inflation, which will prompt the federal government to wind down the mortgage-backed securities program by the end of March. She predicts the 5.1 percent interest rate will edge up to 6.1 percent by the end of the year; 6.1 percent rates will climb to 7 percent.

Recovery will be mild because unemployment and the deficit will continue to be major problems. Pegged at 10 percent in December, Rodoni believes the unemployment rate will continue to rise and remain with us longer. If you count the underemployed, she notes, it is most likely at 17 percent, especially in California, which has an unemployment rate of 12.2 percent. Also, many employees have cut the work week to 33.2 hours. Employers will bring back their employees to the regular 40-hour work week before they begin to hire more people. In addition, it's taking those unemployed six to eight months to find a job and, when they do find work, it's in a different industry and they are receiving 20 percent less than they did in their previous jobs.

The deficit needs to be corrected; if not, "it will impact our ability to do things," Rodoni flatly states. She is also certain we will see higher taxes, more regulation, and tighter lending and appraisal guidelines this year. As a result, borrowers are at the mercy of lenders, there will no longer be any "quick closings," it will now take 50 to 90 days to get funding, and that's only if the paperwork is flawless.

"It's a different market now," Rodoni emphasizes. "There is no 'national market.' What only matters is the local market, and in it there could be as many as 50 sub-set markets, depending on inventory, assets, profiles, appraisals. It's for sale to the highest bidder. Cash is king and almost guarantees a 10-day close."

Also, buyers are more savvy. "We have more educated buyers who expect a reasonably good deal," explains Rodoni. "They can pay all cash and don't need to buy a house."

Sellers need to understand it's a negotiable market. They need to price their home aggressively because the buyer pool, particularly in the high-end, has shrunk about 30 percent due to job losses, loss of bonuses, stock options and wealth in the stock market.

"Tell your sellers just because their home is different doesn't make it valuable. Banks, on the other hand, look at value," Rodoni stresses. "Use specific comps, preferably as recent as one to three months, look at the inventory, buyer profile, days on market, number of times and percentage discounted – then you arrive at valuation."

Will it all be worth it in the end? The government realizes getting the housing market back on a firm footing is key to a lasting recovery. Rodoni also reminds everyone, "Real estate is all about land, which will continue to have value. At the end of the day, you can say this piece of land is my piece of the earth - to take care of, to cherish, and to preserve."


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.

» Back to Real Estate Articles

Site Navigation