csua.org/u/3a6 -> realestate.yahoo.com/re/story.html?s=n/realestate/real/20030618/20030618201
For example Mary Pope-Handy with Windermere Silicon Valley Properties in Los Gatos has seen homes with similar floorplans (in San Jose's Cambrian area five to seven miles south of central San Jose) rise steadily since 1995. The average price of the three bedroom 1,249 square foot floorplan home rose from $443,666 in 2002 to about $463,000 this year, she said. "I don't see a whole lot of slipping in value for a typical Cambrian house. I don't trust the median numbers to give a sense of what most homes are doing. I think a better measure is to find the same floorplan in a neighborhood, in approximately the same condition and track it," Pope-Handy said. In Fremont, a few cities north of San Jose, and in one county to the north, the market is split into two distinct pricing categories -- homes above $600,000 and homes below. Cheaper homes sell with seller credits for buyers' non-reoccurring closing costs and prices have been creeping up. Cheaper homes also sell twice as fast as more expensive homes which reflect prices that are not rising. "Condos and townhomes are doing very well with some complexes having no more units available for sale. Their prices have been creeping up and the units have been receiving multiple offers. A few of my buyers have been completely priced out of the complexes where they want to buy into," said MaryAnn Morrar, a broker associate with RE/MAX Eastbay Group in Fremont. That scenario plays out so vividly in many markets that for the first time in his career Santa Clara County tax assessor Larry Stone is lowering assessed values on some homes while raising values on others. "A method of tracking sales on a ZIP-code basis is far more accurate in what is happening in the market of a specific neighborhood," than looking at county-wide numbers, said taxation professional Sam Gilstrap, an enrolled agent. "When you look at Saratoga, Los Altos, Monte Sereno and Almaden Valley, along with other high end sales, you can see that homes from around $15 million and up have suffered a drop in value. However, in most desirable neighborhoods where the lower to middle income people live, the prices are steady or slightly increased from last year," Gilstrap.
"The loans I've been doing for home buyers are in areas where the prices appear to be up from a year ago. So perhaps the median price is adjusting downward due to the softness in higher priced areas. It's kind of like the affordability statistic, you know, only 28 percent can afford the median priced home and people take that to mean only 28 percent can afford a home in a given area," said Donohoe, also a mortgage broker and owner of Silver Creek Financial in San Jose. How home prices will perform depends a lot on the home's location, sometimes right down to the city block, experts say, and buyers must shop accordingly. At the same time buyers should not neglect their own personal household economic conditions. "Prospective buyers should compare the after-tax monthly cost to purchase a given home to the cost of renting that same home. Like the price-earnings ratio in the stock market, the cost of owning versus renting a home can tell you whether home prices may be overvalued (cost of owning is greatly more than renting) or a fair value (cost of owning is about the same)," said Eric Tyson, a New England financial advisor and author of "Dummies" guides on buying, selling, mortgages and investments. Most experts also agree on another point -- hesitate not. The longer the buyer waits, the more money he, she or they will have spent (wasted) on rent. It is better to get off that fence," said tax expert Marie Sternberger, an enrolled agent in Sunnyvale.
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