Is 2013 a good time to buy a house in the Bay Area. What do the trends look like. I see the prices going up especially with rents.

Asked by Manasa Battula, Mountain View, CA Mon Dec 24, 2012

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Michael Cheng, Agent, San Jose, CA
Mon Dec 24, 2012
I see 2013 as a bad time to buy in the Bay Area as the supply-demand balance appears to be heavily skewed in the seller's favor. Unlike the uncertain days of 2010-2011, buyers are feeling much more confident about housing and that strong buyer interest will mean almost constant bidding wars and rapidly escalating prices. If the end of 2012 is any indication, we will likely see a double-digit percentage jump in prices in 2013.

For those who purchased a home in 2012, they'll be able to side-step the fray and enjoy the rapid and effortless increase in equity. Rising rents is a good proxy for the overall level of demand. As the population has continued to grow over the past 4 years of the housing bust, new home construction has been near historical lows, meaning very little new supply of housing. As housing prices go up, more rentals are being converted for sale, driving up rents further.

Still, if you're in the position to buy and plan to stay for 5-10 years, then I'd recommend buying early in 2013 before further price appreciation. Otherwise, you'll have plenty of company by spring.
Web Reference:  http://www.archershomes.com
2 votes
The Medford…, Agent, Fremont, CA
Mon Dec 31, 2012
I believe that those who DO NOT buy in 2013 will regret it. It won’t be easy, however. We’re in the grip of a perfect storm; real-estate style. Here are the factors:

1. The bottom has officially come and gone – especially in the Bay Area.
2. Home prices are moving up, removing the wheel chocks for serious buyers who are careening into the market to snag a home while prices are still moderately close to the bottom.
3. A substantial portion of buyers (over 30%) are well-heeled cash investors snapping up properties like a huge scrapyard electro-magnet harvesting scrap steel.
4. This rush-to-buy has drained local inventory - which has NOT been replaced by potential home-sellers, many of whom are holding on hoping prices will increase even more.
5. Consequently, in classic supply-and-demand fashion, any decent home that hits the market is visited by hordes of buyers, attracts multiple offers, and is off the market in mere days – typically garnering a higher selling price than its list price.
6. Lack of inventory is propelling values higher. As prices spike upwards, FHA and VA buyers are being blown out of the water by buyers with conventional loans or cash. Cash is once again King – not because it demands a lower price, but because a cash buyer can bid way over asking price and not have to worry about appraisals.
7. Banks are instituting additional layers to the loan process, adding tremendous frustration to an already overstressed market AND eliminating many potential buyers who might have qualified just a few short months ago.
8. Banks are maintaining pressure on appraisers to come in with low appraisals (every appraisal is scrutinized in underwriting and, if it doesn’t meet bank requirements, another appraisal is ordered.)

Mix in “fiscal cliff” uncertainties and it looks like we’re in for a rocky ride in 2013. One thing is certain –the market has become so littered with landmines, less and less are actually making it to the finish line. And, if things continue as they are, the only direction prices will be going it UP.
1 vote
Juliana Lee, Agent, Palo Alto, CA
Tue Dec 25, 2012
Interest rates are low. When interest rates are low not only do you have a lower monthly payment but you build equity quicker. Take a look at the loan information I have on my website at:
http://julianalee.com/reinfo/mortgage.htm
Nearly $900 lower monthly payment on a $500,000 loan at 3% vs 6% and also almost $21,000 more equity after 5 years.

Interest rates are expected to remain low, and the economy is expected to slowly improve. Yes 2013 should be a very good year to buy rather than rent.

I recommend that people do not try to time their home purchase by looking at a crystal ball to predict the economy but rather they look at what they are going to be doing. If they are likely to move or need a lot of cash soon, they might be better waiting to purchase a home. If their lives look like they will be stable for five years or so, then buying a home can be a very wise choice.

Juliana Lee, MBA LLB
Cell: 650-857-1000
Top 3 agent nationwide at Keller Williams Realty

Over 20 years experience
Over 1000 home sales completed in Santa Clara and San Mateo counties

Web Reference: http://JulianaLee.com
0 votes
John Juarez, Agent, Fremont, CA
Mon Dec 24, 2012
I think the answer to your question depends on what your expectations and plans are.

If you are looking for a “deal” that you will be able to resell for a profit in a short time, you will have a challenge as has already been pointed out by other contributors.

If you are looking for a place to “live” for years to come, I think 2013 will be a very good year to buy. Why? Interest rates remain very low so if you need a mortgage, this is a great time to lock up long term financing. Prices have tumbled from previous inflated levels. Even though prices are now moving up you can still get a home before they go up even more.

Every survey taken shows that most people would rather own then rent. Our population continues to grow both from additional immigrants and the natural birth rate. More families will form in the future and they will be looking for a place of their own to live. Continued demand from buyers will continue to push prices up.

If you buy in 2013, I think you will look back in future years and be very happy that you did so.
0 votes
Jin Chen, Agent, Cupertino, CA
Mon Dec 24, 2012
All stats indicate the housing is on the recovery. You want to ride with this tide. Plus interest rate is at its historical low records. 2013 should be the time to buy. However, be prepared for the "bidding war". You've heard that Santa Clara County has only one month inventory, whatever come into market, it is SOLD immediately and, with multiple offers. Have your financing, down payment source, pre-approval letter ready, because some sellers just don't want to deal with un-ready bids. The rents will probably go up a bit in 2013. If you are ready, actually it's cheaper to own than rent now.
0 votes
Terri Vellios, Agent, Campbell, CA
Mon Dec 24, 2012
Currently in Santa Clara County there are 752 properties for sale, 618 Homes, and 129 condos. This is less than 1/2 of what we had in August of this year, and in a balanced market we are closer to 3000. With that you can imagine the competition. Buyers are going in with all cash, or no appraisal contingency and still getting beat out. Those who are purchasing today are setting the price for the next sale. When people are bidding 5%, 10% or more above then expect that you will be paying more.

If interest rates stay the same then I expect this to continue for a while. As interest rates increase and homes increase buyers are going to be priced out of the market. When the market has increased in value more sellers will have equity and be able to put their homes on the market.

The right time to buy for a buyer is when you are ready and able to buy. As the other agents stated, be prepared.
Web Reference:  http://www.terrivellios.com
0 votes
Norman Aless…, Agent, San Jose, CA
Mon Dec 24, 2012
I agree with Marcy and Michael, If you buy now or in the first part of 2013 you should be fine.
At your service,
Allyson
0 votes
Marcy Moyer, Agent, Palo Alto, CA
Mon Dec 24, 2012
The inventory is almost non existent. When this happens in Dec historically the prices will increase in the following year. So, yes it is a good time to buy, especially early in the year, but you have to be aggressive, and not expect to get a house with your first offer, or to get "A deal", because they generally do not exist.

Marcy Moyer
Keller Williams Realty
marcy@marcymoyer.com
D.R.E 01191194
650-619-9285
Web Reference:  http://www.marcymoyer.com
0 votes
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