An article I've just read in the online version of The Mercury News has really intrigued me (click here to read it for yourself).
It looks at how Bay Area home prices have soared, with the single-family home median price having just jumped to a record $750,000. This new high was up 7.1 percent from the year before and bettered the previous nine-county region's July 2007 record of $738,500. The median price has actually risen by $50,000 in one year!
This is yet another sign of the incredible current demand among buyers, even though shortage of supply has tended to drive down the overall number of homes sold.
As I mentioned in last week's blog, this situation represents such an amazing opportunity for home sellers. Since then, however, there's suddenly a much greater chance that even more demand could hit the market, as last week's UK vote to leave the European Union - the so-called Brexit - has created huge turmoil in global financial markets and a consequentially strong retreat into safe haven investments, possibly favoring further falls in mortgage rates, which typically drop at times of risk aversion.
To find out more about this, I strongly recommend that you click here and read a very interesting article that appeared in the Washington Post earlier this week, entitled "How Brexit could push mortgage rates to historic lows."
Of course, the strength in the Bay Area market is not fueled by uncertainties in far off places, significant though they may be. The Mercury News article points out that the market here is informed by strong job growth and, of course, the irresistible attraction of ultra-low home loan rates. This has created an upward pressure on prices as supply trails demand.
The article also looked at the out of the box thinking some people are applying to the market, moving out of the highest value areas and buying larger properties in less expensive locations. It quotes a Sunnyvale family that sold a 1600 square foot Eichler home for $1.7 million (purchased 12 years ago for $750,000). They made the decision to move to Austin, Texas, where they now own a 5,000 square foot home on half an acre, with a swimming pool - all for $740,000.
There is also the example of a couple who sold their Sunnyvale house of 16 years last month for $2.25 million and bought a much larger house in Carmel Valley in a superb setting for $1.34 million.
These are great case studies of the sort of out of the box thinking I suggested in a recent email communication with clients. Many homeowners are literally sitting on a goldmine, especially long term owners, who may be at or approaching retirement. Should they so wish, they now have a fantastic nest egg to make their golden years so comfortable and enjoyable.
Accepting that to take full advantage of this investment might mean moving away from the immediate area, surely there is a balance to be struck here between sentiment for one's location and practical needs and other possibilities and ambitions.
Have you considered that you could own a sizeable and very well appointed property in other areas and still have enough money left over to invest and sustain yourself very adequately!
Why not contact us today and explore the myriad of great options that the current vibrant market conditions present.