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First, I need to define some terms, and that would be an “efficient” market versus an “inefficient” market. An efficient market is one where all information is readily apparent to all parties and the price of the item in question is easy to determine. An inefficient market is the opposite. So if you had a shopping mall that had a Target, Wal-Mart, Office Depot and Staples side by side, the price of a 12 pack of Ticonderoga #2 pencils would be pretty easy to figure out.

Our real estate market is a horribly inefficient market. Not only are no two houses exactly alike but not all information is available to everyone. We can look at the MLS data for guidance, but the Solds are by definition “old news,” the Actives haven’t sold yet, and we don’t know what price all the Pending homes are pending at, or if they’ll even close. There are many, many factors at play and no one, I repeat NO ONE, can tell you exactly what a home will sell for, not to even within a few thousand dollars.

So here is where I get all righteous and climb up on my soap box. Let me first put on my helmet and shield to get ready for the arrows...OK, I’m ready. Based on the above, it is my contention that the best way to really find out what is the most that a home will sell for is to expose it to the open market, allow all potential buyers in to see it, then wait at least a few days before the seller responds to any offers to find out what the market will bear. Otherwise, if you take an offer WITHOUT exposing it to the market, or if you take the first offer through the door, you’ll never know if you are leaving money on the table if you had only waited a few days for another offer. This is why I’m not a fan of “pocket listings” where only I or my office knows about the home being for sale. Sure, the seller may save a little on commission, but I think the odds are high that you could “net” more money on the open market. If you are doing a short sale, this actually DOES apply to you because I believe you have a legal duty to only accept and submit a market value offer on your home.

If you have questions on this or any other real estate topic, call me at (925) 240-MOVE (6683). To search theMLSfor free and view virtual tours of homes for sale, go to: www.SharpHomesOnline.com. Sharp Realty

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Inventory is low, rates are low and buyers are desperate. Homes that are in a good location, in good condition and priced appropriately will almost for sure get multiple offers within a few days of going on the market, and probably over the asking price. This is leading to rapid price escalation. It feels a lot like the early and mid 2000’s, when the last bubble formed. We all know how badly that ended. Are prices rising too rapidly? Are we forming another bubble that’s about to pop?

As of right now, I don’t think a bubble has formed. There is a BIG difference I see this time versus the last time we saw such a run-up in prices, and it’s that buyers are qualifying for their loan, or they are paying cash. Last time, buyers could “state” their income and also get a “toxic” loan on top of it in order to buy a home for MUCH more than they could really afford, all while putting almost nothing down. So the moment that the prices stopped appreciating or even headed down, the homeowner took a look at that payment they could never afford in the first place and many of them chose to stop paying, which lead to a foreclosure which dropped values even more and the whole thing imploded.

But this time (for the most part) buyers CAN afford their payment because most lenders are actually qualifying them based on their real income and based on the “real” payment, or the buyers are paying cash. So if prices stopped appreciating, or even were to drop some, these buyers may grumble a bit, but I don’t think they are going to walk away from their homes en masse like last time. Even with our recent price increases, home prices are still generally affordable based on the average income because mortgage rates are so low. Now this doesn’t mean that another bubble won’t form and then “pop” if prices keep escalating like they are and outpace the rate at which household income increases.

If you have questions on this or any other real estate topic, call me at (925) 240-MOVE (6683). To search theMLSfor free and view virtual tours of homes for sale, go to: www.SharpHomesOnline.com. Sharp Realty

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Inventory of homes for sale in most areas around here, around the state and even around the country is very low. In some areas it is at historic lows. So where are all the sellers? There are many reasons that are put forth as possible explanations, and it’s probably a combination of many factors. Some people still think the banks are holding onto homes and not releasing them to the market in an effort to push prices up. Banks have vehemently denied this, and some people are starting to think that maybe there ISN’T a huge backlog of homes somewhere hidden in the bowels of the megabanks.

Another reason is that many people that were upside-down by $100-200K the last year or two are looking at the recent price increases and are realizing that they are now only upside-down by maybe $25-50K. So they may be thinking if they just hold on for another year or two they may be able to avoid a short sale. I’ve also seen many, many people get “good” loan modifications approved, even with some people getting principal reductions, so they are also holding on, hoping that prices continue to increase.

But there is one more reason that is becoming readily apparent in surveys that are done, and in my own conversations with potential sellers. They aren’t selling because they know there isn’t much to buy and they are worried about not being able to find a suitable replacement home. Or that by the time they sell and are able to buy again, home prices will rise to the point that they will get priced out. So it’s becoming a self-fulfilling prophecy in that there isn’t much for sale, which is causing sellers to refrain from putting their homes on the market, which leads to even LESS for sale...

If you are in this situation, one possible solution is to buy your replacement home FIRST, and then sell your old home later. Of course, you have to qualify with your lender to do that, and you run the risk of having two loan payments and/or that the market will crater AFTER you buy the replacement home.

If you have questions on this or any other real estate topic, call me at (925) 240-MOVE (6683). To search theMLSfor free and view virtual tours of homes for sale, go to: www.SharpHomesOnline.com. Sharp Realty

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If you drive around town at all this weekend, you are going to see a lot of purple on buildings and even on people. What is going on? Well, it’s the annual “Paint Our Town Purple Weekend!” This purple-fest is a celebration to get the word out about the upcoming American Cancer Society’s Relay For Life to be held June 1^st and 2^nd at Liberty High School in Brentwood.

You’ll see flags flying, business store fronts decorated, personal residences decorated and lots of purple t-shirts. Feel free to join in! For more ideas about how you can join in, go to www.relayforlife.org/brentwoodca. The website lists creative ways you can display the color purple in support of Relay For Life.

While you are on that website, be sure to poke around to learn more about Relay. While raising funds for cancer research is a big part of Relay, it is also an important way for us to support those who are currently fighting cancer, have survived cancer, or to honor those we have lost due to cancer. I’ll bet that everyone reading this has been touched by cancer in some way in your life through a close friend or relative, or even yourself.

If you’d like to donate money to support this event, you can also do so at the website link I’ve given you above. You can even take it up a step and form your own team to be a part of this great day. Or just plan on coming out toLibertyHigh Schoolin June to see what all the fuss is about! There were be events happening nearly every hour of the day for 24 hours including vendors, bands, family-friendly movies and more! Some families even camp out overnight. Check the website or contact me if you have any questions.

If you have questions on this or any other real estate topic, call me at (925) 240-MOVE (6683). To search theMLSfor free and view virtual tours of homes for sale, go to: www.SharpHomesOnline.com. Sharp Realty

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The sweeping Dodd-Frank legislation of 2010 is resulting in some new rule changes that are supposed to go into effect this year for certain lenders. Among them is a requirement that the lender HAS to verify that the borrower has the financial ability to repay the loan (gasp!). I know this sounds like a radical idea, and actually, it kind of is.

During the “go-go” years when the real estate bubble was forming, lenders were more concerned about making loans than making “good” loans. The more loans they could make, and the faster they could make them, the more they were rewarded. And on the flip-side, if they didn’t make enough loans, they were penalized and vilified publicly by politicians for” holding people back” from buying homes. They would verify almost NOTHING and let the borrower “state” what income they made. And when that wasn’t enough, they’d get “creative” with the loan by using adjustable-rates, interest-only payments, negative-amortization payments (where your balance goes UP each month), etc. and who cares if the borrower can’t afford the payments? The lender was just going to sell the loan to an investor on Wall Street, so they didn’t care if the borrower could pay or not. I’ve come across several people who got loans where the mortgage payment was as much as their monthly gross income!

Well, all that has changed and now most lenders have to verify everything, and they can only make the loan if the borrower can indeed handle making the principal and interest payments. This means that even if you could find a lender that wanted to give you one of those “toxic” loans (interest-only ARM with neg-am), they would STILL have to calculate your debt ratio based on the plain-vanilla 30 year fixed-rate, principal-reducing payment. This is a good move for the long-term stability of our market, but it could put a cap on what buyers can buy if prices increase but income doesn’t rise to meet it and/or if interest rates rise.

If you have questions on this or any other real estate topic, call me at (925) 240-MOVE (6683). To search theMLSfor free and view virtual tours of homes for sale, go to: www.SharpHomesOnline.com. Sharp Realty

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I just found something “new” that is really cool.... I put “new” in quotes because this may actually be several years old, but I just stumbled across it! One of the drawbacks to being in this industry as long as I have is that I get used to doing something the “old” way so I have ingrained habits that are hard to break. When I first started in real estate and someone used to ask me what school boundary a particular home was in, I struggled to answer their question. At that time, the school boundary maps were closely-guarded secrets (at least, that’s what it felt like...) Eventually I was able to obtain some black and white copies of the maps smuggled out of the District office, and my clients and I would do our best to figure out the boundaries. Most of the maps just had the major streets on them, so when a home was near the boundary, it was tough to find out exactly which school it fed. I would need to update my maps from time to time because the school boundaries would change from time to time. Then a few years ago the District started posted color maps on their website, so that was a big step forward.

But I just found out that the Brentwood elementary and the Liberty Union high school districts have tools on their websites where you can actually plug in an address, and it will spit out what schools are assigned to that address! Go to www.brentwood.k12.ca.us or www.libertyunion.schoolwires.net then look for the links that say, “Find my school.

By the way, just because a home is in a certain school boundary does NOT guarantee that a resident child will attend that school. That class may be over-crowded so they may go to another school until the crowding issue is resolved. So if attending a certain school is of paramount importance to you, be sure to contact the District office, and/or the school itself.

If you have questions on this or any other real estate topic, call me at (925) 240-MOVE (6683). To search theMLSfor free and view virtual tours of homes for sale, go to: www.SharpHomesOnline.com. Sharp Realty

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In one of my kids’ Winnie the Pooh books, Pooh is encouraged to “try, try again” when faced with an obstacle. That is sage advice, and I’m going to urge some of you to “try, try again” with the “Keep Your Home California” program.

This is a program that the State of California created in response to a large amount of money they received from the Federal Government as part of the “Hardest Hit Fund.” When it was first released, only a few lenders were participating, and the qualifications were strict. Since then, more and more lenders have come on board, to where there are now roughly 100 lenders and loan servicers participating. This means that if you called before and were disappointed that your lender wasn’t participating, you should call back, because the odds are VERY good now that they now ARE!

And on top of all that, there have been some recent changes to the PRINCIPAL REDUCTION program that are very interesting. In the past, Keep Your Home California would match $1 for every $1 that your lender dropped your balance. That appears to be changing now, to where nearly all of the principal reduction money is coming from Keep Your Home California and not your lender, so lenders are obviously much more interested in that program all of a sudden! It’s basically free money to them (thanks, taxpayers!).

They have several programs to choose from: from money to help you catch up on your payments, principal reductions, relocation assistance, etc. So check in with them if you need some help with your mortgage. For more info, call 888-954-KEEP(5337) from 7 A.M. and 7 P.M. Mon-Friday, and 9 A.M. to 3 P.M. on Saturdays. Or check out their website at www.KeepYourHomeCalifornia.org. Their website is now interactive so you can find out online instantly if you may qualify for any of their programs.

If you have questions on this or any other real estate topic, call me at (925) 240-MOVE (6683). To search theMLSfor free and view virtual tours of homes for sale, go to: www.SharpHomesOnline.com. Sharp Realty

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For years the main question I would get was, “What’s my home worth?” People were buying homes they couldn’t afford banking on the hope that the home was going to keep going up in value, and they did, for a while. Then the meltdown happened, and people stopped asking me what their home was worth but instead asked about loan mods and short sales.

Now, they are back asking about how much their home is worth again. Prices have recovered to the point where a LOT of people that were upside-down just a year or two ago now have hope that they actually get out of their home without having to do a short sale. Some of them even get surprised when I tell them they’ll actually get some money out of the deal!

The challenge we face now is that there is a lot of “noise” in our data. There are still a few trashed bank-owned homes out there dragging the comps down, and then there will be the pristine, super-upgraded home that will sell WAY high. And then there are the “suspicious” ones where I’ll see a home sell before it gets exposed to the market and sometimes it’s $50-75K less than what you’d expect it to sell for. On top of that, due to low inventory, low rates and high buyer demand, buyers are sometimes bidding homes up in a bidding war once they hit the market. So what I’m saying is that it is hard right now to really set an exact price for ANY home in our market!

If you’d like an “estimate” of your home’s value, I’ll be happy to run the actives, pendings and solds for you and do my best to give you my best guess on the value. Just call me or send an email to Brian@SharpHomesOnline.com and give me the address and some basic info about the home and I’ll send you back a report.

If you have questions on this or any other real estate topic, call me at (925) 240-MOVE (6683). To search theMLSfor free and view virtual tours of homes for sale, go to: www.SharpHomesOnline.com. Sharp Realty

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Renters have had it hard the last few years. There has been more “renters” than “rentals” for a while. Many potential homebuyers were scared of jumping into the housing market when prices were collapsing and at the same time former homeowners were becoming renters after losing their homes to short sale or foreclosure. This means landlords could be fairly picky about who they’d rent their properties to and rental prices were increasing.

We may be seeing this situation thaw a little bit. We are seeing an increase in the number of properties for rent and that’s leading to a flattening out of rental prices. We are even seeing some rental price reductions as it takes longer to get a property rented out. Smart landlords know that it’s better to take $100-200 less a month but get it rented than to have it sit vacant for 2-3 months. [For the record, I’ve been predicting that rents would fall the last few years, and I’ve been dead-wrong!]

The situation that was causing rents to go up may be reversing itself. Potential homebuyers have gone from being scared of buying a home to being scared of getting “priced out” of the market if they don’t buy soon. And many of the people that lost homes due to foreclosure or short sale over the past 2-5 years can now potentially qualify to buy homes. So many tenants are really “wanna-be” homeowners right now who would rather buy than rent, and over the past year or two the number of investors buying homes to rent out has skyrocketed. So at the same time that demand for rentals is slowing, supply is increasing.

So if you are a tenant, just know that you may be gaining a little bit more leverage within the next few years to negotiate on rent. And if you are a potential landlord thinking of buying a home to rent, it would be wise to factor in a little “cushion” to your numbers. So if the property rents at $1,700 a month now, make sure you can handle it if rents drop to $1,500.

If you have questions on this or any other real estate topic, call me at (925) 240-MOVE (6683). To search theMLSfor free and view virtual tours of homes for sale, go to: www.SharpHomesOnline.com. Sharp Realty

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Wow, what a turnaround! It feels like I’ve been writing doom and gloom articles for forever. But now I finally get to report on some POSITIVE things for a change! (Well, everything depends on your perspective. Rising prices are NOT great news for buyers...)

Our market definitely hit the proverbial “bottom” last year and it’s been appreciating rapidly since then. The average sales price for homes in our area is up a little more than 30% the past 12 months

You always have to take housing numbers with a grain of salt. It’s often not as bad as it looks, or not as good as it looks, either. Back when average prices were collapsing, it was partly because the higher-end homes just weren’t selling AT ALL and a lot of the lower-priced homes DID sell, which brings the average down. Now it may be the reverse, in that we are seeing a lot of new builders re-enter the marketplace and they are putting their homes on the MLS to get more exposure, which can shift the average price higher.

But the bottom line is that all the band-aids on top of band-aids for the real estate market are starting to work. Yes, the banks and the Federal government have found ways to keep homes off the market that really should be on the market. Yes, the Fed is driving interest rates artificially low. Will we look back on this in 20 years as a big mistake? Probably. But for right now, the market is hot, prices are up, buyers are desperate, and it looks like it’s going to continue that way for a while. If this keeps up, pretty soon we’ll be talking about another “bubble” forming that is unsustainable. I don’t think we are there yet. I think this has some more steam left in the run before it gets to that point. But the basic math says if we go up another 20-30%, then we may be approaching “bubble” territory again because the average person will no longer be able to afford the average home.

If you have questions on this or any other real estate topic, call me at (925) 240-MOVE (6683). To search theMLSfor free and view virtual tours of homes for sale, go to: www.SharpHomesOnline.com. Sharp Realty