It's a confusing time with the economy in disarray and an unstable real estate market. To get the proper perspective on the value of real estate, you have to go right to the source, and that means talking to a REALTOR®? in your local market.
"Perceptions about real estate have been skewed in recent months because of much focus on the national housing market. While average sales and prices help us identify trends, the fact is all real estate is local – conditions vary greatly from one city to the next," said Julia Keady, president of the Silicon Valley Association of REALTORS® (SILVAR). "There are some challenges in the market, but overall there are many more opportunities in local markets today. Real estate continues to be a solid long-term investment."
Keady, who is a REALTOR® with Alain Pinel Realtors in Palo Alto, said some homeowners who have seen gains over the long term may perceive losses because of short-term market fluctuations, but statistics from MLSListings Inc., SILVAR's Multiple Listing Service, shows there is, indeed, long-term value in homeownership. For example, for homes purchased in 2003, the median price shot up in 2007, and then dropped in 2008, but homeowners were still left a healthy gain from 2003. A number of Silicon Valley neighborhoods show long-term gains. Between 2003 and 2008, the median price of a single family home in Palo Alto increased 72 percent, from $900,000 to $1,550,000; Cupertino, 52 percent, from $780,000 to $1,187,500; Los Altos, 53 percent, from $1,172,000 to $1,797,500; and Mountain View, 45 percent, from $678,750 to $982,000.
Houses are not like stocks. Homeownership is designed to build wealth over the long term. Studies also show homeowners have an average net worth of $184,000, compared to just $4,000 for renters.
Also, times of crisis often turn out to be times of opportunity. "In many areas, this may be the best time in years to buy a home," Keady said. "Smart and serious investors look at the long term. Those investing in a home and keeping it for a typical holding period of six to 10 years will likely see their investment pay off financially. At the same time, they will enjoy all of the non-tangible benefits of homeownership."
Keady urges prospective buyers and sellers to contact a knowledgeable and experienced REALTOR® in their area, in order to obtain the correct information about their local market, so they can make the right decision.
Keady said members of the Silicon Valley Association of REALTORS® are working in several ways to help you understand conditions in your local market and take advantage of the opportunities to invest in real estate:
• SILVAR provides consumers with the latest information on home sales and prices and what factors are likely to drive the market in the months and years ahead;
• SILVAR members can help educate prospective homebuyers about the various loan products available to them; and
• SILVAR is working with lawmakers to provide more affordable financing options that will enable homebuyers and homeowners to keep their homes for the long term.
For more information on the opportunities here Silicon valley neighborhoods of Menlo Park/Atherton, Palo Alto, Los Gatos/Mountain View, Cupertino/Sunnyvale and Los Gatos/Saratoga, and how you can build wealth through homeownership, contact a REALTOR®?in your community, or visit www.silvar.org
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 email or call the SILVAR office at (408) 200-0100.