Monthly Archives: January 2013

“Bad Appraisal Nets Seller Big Dollars!?”

Residential estate can create some UNreal events that can create UNexpected results.
Two months ago in November of 2012, a home in Emerald Hills of Redwood City was under contract to a buyer for the price of $700,000.  UNfortunately for this buyer, the appraised value came in at the UNbelievably low value of $650,000.  This was $50,000 less than the purchase contract price and despite the best efforts to provide the appraiser with valuable comparable information that would support the contract price, the appraised value remained the same. The buyer lost the property.
The property was placed back on the market just after Thanksgiving in the middle of the holidays.  In an UNcanny turn of events, the number of buyers had increased tremendously in just the last 2 months of 2012 and after one week on the market, 8 offers were received on the property.  It just closed escrow today for the price of $770,000.  This was a $120,000 turn around for the seller!
How is it possible for an appraisal to be this far off the market value for the property in just 2 months?
So how is it possible for an appraisal to be this far off the market value for the property in just 2 months?  Appraised value is mostly a look back at the price for which recent comparable sales have closed.   In an UNtimely way, though, these are sales that occurred 30 to 60 days before the actual closing,  This in turn reflects the market from 2 to 6 months prior to that when the property was first placed on the market.
In a year like 2012 which saw a big turn around in value in the San Mateo County and Santa Clara County residential markets, the market value continuously outpaced the appraised value all year long.
The results for this one seller was, thankfully, UNreal!

Crazy Bidding Wars! Back to the UN-Future, Again?

The Bay Area never ceases to amaze!  The residential real estate market over the past 12 months has been UNreal!  Never mind the Fiscal Cliff, never mind the Debt Ceiling, the numbers speak for themselves in 2012.  Median home prices in San Mateo and Santa Clara counties increased approximately 15% to 16% in just the past 12 months.  The increases were higher in popular towns such Palo Alto, Menlo Park, Los Altos and Mountain View where median home prices have exceeded the peak prices from mid 2008.

Reports are being heard multiple offers are being received on numerous properties.   In some cases 8 to as many as 30+ offers have been received on some properties.  Overbidding in the range of 5% to 20% over asking price has not been UNusual.  Many offers are All Cash!  The market is a real market without the benefit of the easy loans from the mid 2000′s.  Residential real estate along the Peninsula and Silicon Valley is alive and well.  But why?

Home inventory levels are UNbelievably low and have not been this low in over 7 years.  This is making it hard on home buyers to purchase a home.  Buyers are moving to the Bay Area from all over the globe. They are being greeted with only a handful of homes to view in the towns and prices ranges they are targeting.  When will new inventory of homes arrive on the market?  Usually the homes start arriving on the market just after Super Bowl Sunday.  It is UNknown, though, if there will be enough new inventory to satisfy the current demand.  Home sellers are taking note of this and have been considering that this might just be the right time to sell.

The Bay Area has seen this before and now its Back to the UN-Future Again!


jwking no hair
This blog is dedicated to the Unreal events that happen in everyday residential real estate.  Truth can be stranger than fiction and as you might say UNbelievable!  Enjoy.