Regarding a recent sale in Cupertino, if this is not a real-estate bubble, what is?

Asked by Taza Guru, Sunnyvale, CA Thu Jan 16, 2014

See the sale details for 1074 BELVEDERE Ln San Jose, CA 95129 - it is a San jose address home, Lynbrook school with 1300 sqft, 9000 lot and there was a bidding war.

We all know that interest rate is not going up considerably higher instantly and I am just wondering if we are fueling and endangering local market into a real-estate bubble (in Cupertino).

Although there is a lot of money waiting to change hands out there (Stock market, Baby boomers to name a few), as a real-estate investor, I feel it is good to grow organically and not aggressively to bust soon. Although this is going good for me, I still feel that it is not healthy for the local market.

Real-estate professionals or not, please chime in your thoughts. I am specifically interested to find out what are buyers thinking. My unsolicited advise to buyers: If you slow down and save more, you pay down more and your interest rate per month is compensated with the rise in interest rate.
Thoughts? Insight?

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Mon Feb 3, 2014
One of the greatest falsehoods parading around as fact is the question of market timing. Certainly the stock market has an abundance of signals which tell an investor when to buy and sell. They no not necessarily signal a crash. Real estate is very similar if you are an investor. The answer will differ greatly from one area to another, because of the impact of local economics. When a buyer is looking for a place to live, they may not be willing to purchase the worst looking dump in the best neighborhood or something similar which would represent a great deal. What won't work is simply saying these CA prices are too high compated with FL, and I'm waiting for the next crash. When the last crash came here,it was the first big crash since WWII - too long to wait! And then the best deals were in CCC, which is perfect if that's where you want to live and/or invest. It doesn't work for me. Knowledge is power !
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Elena Talis, Broker, Palo Alto, CA
Thu Jan 16, 2014
No it is not a bubble. It is simple supply and demand situation. And my advice to the the buyers - don't wait. Your saving rate will never match the rate of real estate appreciation.
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I agree that savings will never catch up to real inflation, but if the last bubble was a bubble, why isn't this next one a bubble? Supply and demand is always the governing rule. Within micro markets, the ability to get into a school district, or close to your job would cause a person to "over pay" compared with another buying who does not have those same interests.
Flag Mon Feb 3, 2014
Juliana Lee, Agent, Palo Alto, CA
Thu Jan 16, 2014
One home sale does not mean there is a real estate bubble. If you look for homes sold since 1/1/2013 with Lynbrook specifically called out, 33 show in the MLS listings with this one having the third lowest price.

Zip 95129 home values posted at show a fairly steady price increase since the beginning of 2012. (I'm looking at price per sq ft to somewhat compensate for different house sizes)

Saratoga zip code 95070 which has the most homes sold with Lynbrook listed, shows the more common rapid increase in 2012 followed by relatively flat prices through 2013. The 1,000 sf larger average size makes the cost of a house in zip 95070 more expensive than zip 95129. The average price per sq ft is comparable.

The real estate bubble in 2000 showed a very rapid price rise at the end of 1999 followed by a slightly slower fall in price at the beginning of 2001. The price fell to roughly where it would have been had prices kept a steady increase.…

The crash in prices in 2008 followed a steady price increase that began about 2002, rather than a sharp increase. The crash in prices was a result of failed economic policies rather than a dramatic shift in the desire to own a home.

Juliana Lee
Top 2 agent nationwide at Keller Williams Realty, the nations largest
Cell 650.857.1000

Over 20 years experience
Over 1,000 homes sold in Santa Clara County and San Mateo County
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0 votes
Juliana - Well said. Bottom lines are demand for home ownership will not drop,
unless something causes potential buyers to choose renting instead, and/or owners decide to sell at an unusually high rate - like when they can't pay their mortgages.

Also wouldn't it be appropriate to call failed economic policies politics as usual? For all the Congressional hearings and new rules made etc., it seems not enough of the people responsible for the problems created by Wall St. have been locked up!

We consumers were stuck paying the check for everyone else's party, and we'd all be well advised to remember that.
Flag Thu Apr 10, 2014
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