That is the first question I get asked by almost everyone I see.

The last couple of years have been quite a ride.  The fall all started in the low end (under about $700,000) where most of the subprime lending was done...primarily the southern parts of San Jose(Evergreen, Alum Rock and Blossom Valley), South County (Gilroy, Hollister, Morgan Hill), and the East Bay.  Those markets have been absolutely crushed over the last couple of years and seen as much as a 30 to 50 percent price adjustment to the downside...in some of the farther out areas it has been even worse than that. 

The good news is with historically low interest rates (under 5%) and great prices, the low-end markets recently caught fire and we are seeing not only first time home buyers, but investors gobbling up properties...most things are selling with multiple offers. 

The low end definitely appears to have hit a bottom.  Probably a once in a lifetime opportunity to purchase a house in the Bay Area as investment property that will actually positively cash flow with 25% down.  I honestly believe now is probably a once in a generation opportunity to create massive wealth in real estate.  It just takes a lot of courage when most people around you are still freaking out.

Now let's address the high-end; as the low end was tanking over the last couple of years, the $900,000 plus in the Bay Area continued to be bullet proof...primarily Los Gatos, Saratoga, Los Altos, Sunnyvale, Cupertino and to the North up the Peninsula. Then September/October 2008 hit and the high-end came to a screeching halt.  As the stock market crashed, everyone ducked for cover...it was the eye of the storm.  Based on what I am seeing, those core Bay Area markets dropped by 15 to 25 percent overnight...literally less than 60 days.  The good news is it seemed to happen all at once and then hit a hard floor in December...prices seem to have held at that.  There are however quite a few properties on the market in the higher end because most sellers have not come to grips with it yet...they are only pricing their homes 5% to 10% off the peak and consequently they are just sitting, or if they sell, they are selling significantly under the list price. 

So, if you owned a house worth $2 million last summer, it is probably safe to say if you went to sell today, you should figure it is worth about $1.6 million.  The sooner sellers get realistic with pricing the better it is going to be for these markets.  Because if too much inventory builds up on the market, it is going to start to scare buyers and this market may still pull back a bit more...time will tell.

There is a silver lining however...this is one of the best buy up markets ever.  Last summer, if your house was worth $1.5 million and you sold it to purchase a home worth $2.5 million, you'd be making a million dollar jump.  TODAY your house would only be worth $1.2 million, but the good news is that $2.5 million house is now only worth $2 million...only an $800K difference.  Couple this value savings with low interest rates and it creates a great opportunity to move up.  Don't wait though...who knows how long it will last.  In some of the high end markets we have seen 3 to 5 times as many homes sold in March as any month going back to October of last year.  The high end appears to be gaining some traction.

Remember, if you or anyone you know is thinking about doing anything with regard to real estate feel free to give be a buzz before you start for some input and advice...whether it is buying, selling, investing, refinancing, needing a loan modification, REO's, short sales, etc...I have seen it all and am dealing with it everyday.   

If you need to refinance or are purchasing a home give me a call or ping me an email as well...especially if you are looking for a Jumbo loan.  A couple of years ago at Intero we started a mortgage company and we have some of the best loan programs in the industry.  As you are probably painfully aware, there has been very little jumbo loan product this last year or two.  Our mortgage company has been working diligently to procure jumbo money and has recently finalized a portfolio jumbo loan product. 

This product is available and exclusive to Intero Real Estate Services clients.  Contact me and I will set you up with one of my best loan officers.

Features include:

• 5/1 ARM available TODAY!
• Rates starting at 5.125 for 5/1 ARM
• 80% Loan to Value up to $1 million
• 80% Cumulative Loan to Value and 75% Loan to Value up to $1.5 million
• 80% Cumulative Loan to Value and 70% Loan to Value up to $2 million
• No adjustments for cash out, investment properties
• Up to 50% Debt to Income Ratio
• Unlimited cash out up to 50% Loan to Value

Let me know what followup topics or specific areas I can look into for you.