Why are the home prices in Lafayette, Walnut Creek and Alamo so unreasonably high even in the current state of the economy and jobs?

Asked by Really?, Alamo, CA Mon Jan 31, 2011

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Jonas, , Houston, TX
Tue Feb 1, 2011
Hi there,

As stated below, prices are a direct result of what someone will pay. Home prices are set by "comps" When a home is "sold" it creates a comp to which the next home in the area of equal stats is measured by. If homes are in the $600K range, and say Mr & Mrs buyer are looking to buy a new home. They really want to live in that area, their Realtor will pull the comps and find out that the last home that sold within the last 6 months like the one they are looking at sold for $625K. The home they are looking at is listed at $625K. But lets say their are two offers on the home, so their Realtor says, "If you want this one guys you are going to need to come in a bit higher." So they offer $635K. This creates a new comp. You can see how the market can rise...

But lets say the home is offered at $625 and the comp shows $625 but the buyers say...NO WAY! Not in this market. Not with the current state of the economy and jobs! Well, Mr homeowner really needs to get out of this house so he/or she accepts their crazy offer of $575K thus creating a new comp for the area. You can see now how prices fall.

It's a vicious cycle and takes time to realize patterns.

Hope this helps!

Jonas Mancuso
Remax / Lakeland
1 vote
Dallas Texas, Agent, Dallas, TN
Wed Feb 23, 2011
Compared to what? If homes are selling then lenders are approving the value of those homes. Perhaps search in another area which will accommodate your budget.

Many myths are out there for purchasing real estate

Lynn911 Dallas Realtor & Consultant, Loan Officer, Credit Repair Advisor
The Michael Group - Dallas Business Journal Top Ranked Realtors
0 votes
Gilbert Rich…, , Santa Clara County, CA
Wed Feb 23, 2011
Supply and Demand. Even though prices are much lower than 5 years ago, the inventory in the market is much smaller than the demand.

From someone who has worked in both markets, the pricing is great from a historical view.
0 votes
Bob Georgiou, Agent, Danville, CA
Tue Feb 1, 2011

Unreasonable is a matter of expectation. Most people who live in this area take for granted the expense needed to do so. That said, people who believe that homes are so pricey forget we live in "Green" no sprawl not in my backyard California where developers who attempt to build homes are years behind the demand curve. This recession has balaced supply and demand out a bit but the reality is there is a structural housing shortage (at the bubble the actual shortage number was in the hundreds of thousands of homes according to ABAG) that this area will never recover from. When the jobs and easier money comes back expect prices to lunge ahead as they always do.
Web Reference:  http://bob2sell.com
0 votes
Steve Dawson, , Walnut Creek, CA
Mon Jan 31, 2011
I guess the question is what are you comparing it to? Values and prices coincide with desirable areas because of schools, locations, weather, proximity to work and so forth. The areas mentioned above have the best schools, weather and so forth, so that is the reason why the prices are higher than Pleasant Hill or Concord or even San Ramon, which are the neighboring cities in your question. If you look at the stats, even those areas have come down a lot since the crest of the market, but will always be desired areas to live. If people did not want to live in those areas, then the prices would come down drastically, like Antioch and other areas similar have.
Web Reference:  http://www.BrokerDawson.com
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