The Bay Area’s current home buying market is a witches’ brew of market forces is making this spring one of the toughest times in memory to purchase a home.Arrayed against average buyers are fiercely competitive investors and others paying cash on the barrelhead, a scarcity of homes for sale, bidding wars that have run up prices and even problematic appraisals.
“The banks — they want all cash and they don’t really care,” said a frustrated buyer , who is searching for a home.
The 34-year-old designer, who is soon to be an architect, said she and her husband Peter began house hunting a year and a half ago.
it’s the ultimate sellers’ market — very few sellers and hordes of buyers.
Many homes that would be purchased in a normal market by average buyers are ending up in the hands of cash-paying absentee owners, typically investors, according to the real estate information company DataQuick. That’s especially true of foreclosures and lower-priced homes and condos.
In February, 1,044 houses and condos — 28 percent of the sales — in the counties of Santa Clara, San Mateo, Alameda and Contra Costa were bought by absentee buyers. That is the highest percentage since DataQuick began tracking them in 2000. In Contra Costa County, absentee buyers were 35 percent of the sales..
Appraisals — which in the current fast-paced market sometimes have lagged actual sales prices by a month or more — are one more problem confronting buyers who are borrowing to buy a home because banks won’t lend above the appraised price.
Another obstacle for some would-be buyers: Those who are paid by commission or who are self-employed may fall outside the credit guidelines of Fannie Mae or Freddie Mac, two government-owned companies that purchase mortgages from banks.
But just because you have cash doesn’t mean you can buy a home. First you have to find one for sale, and inventory in the Bay Area remains low.
Your Best Bet for Success is and always will be deferring to the Knowledge, Guidance and Skills your Realtor has accumulated.
Until Next Time…Happy House Hunting
Nino M. Gaetano