Good News and Bad News for San Jose Home Sales

Loren Burks, a Realtor with Century 21 M&M and Associates in San Jose, has bad news and good news about area realty sales this year.

The bad: “It’s slow.  Without any governmental incentives, the market is somewhat stagnant,” said Burks, a 13-year industry veteran.  “I have seven listings, but I don’t have any offers yet.”

The good: “I’m having my best year ever,” she said.  “A lot of agents that were in this business have now left.  That leaves the business for more serious agents.”

Homes sales in Santa Clara County in July were down 18.5 percent from the same period in 2009.  Sales also were down 8.4 percent in July from June, according to the California Association of Realtors.

Burks said sellers listing their properties too high are a reason for slow sales.  “I’m having problems with people listing properties realistically,” said Burks.

She said one of her clients is “stuck in 2005,” when it comes to pricing her San Jose rental home.  The property is worth $520,000, but the client insisted on initially listing it for over $600,000 and just recently dropped the price to below the $600,000.

Homes in the $500,000 to $600,000 range are slow moving, while investors are snapping up homes priced in the $300,000 range, said Burks.

The median-priced home sold in Santa Clara County, meaning half sold for more and half sold for less, in July was $630,000, compared to $587,000 in July 2009, according to the California Association of Realtors.

Formerly employed in Silicon Valley’s high-tech industry, Burks has maintain those contacts and has clients working at such firms as Cisco, Google, Yahoo, and Oracle.

“They’re high-end buyers, but they’re looking at investment properties and renting them,” she said.  “They have a lot of cash.”

Burks, who had 12 to 13 transactions last year, could double her sales this year.  “I’m going to close the year with 20 or 25 units.”

While Burks singled out sellers pricing properties too high, Realtor Angie Cocke said buyers are looking for the deal of the century.

“The buyers are just not getting it,” said Cocke, an associate at Century 21 M&M in San Jose.  “We have the best interest rates historically and they’re waiting for the prices to go down.  They’re going to miss the boat.”

As the inventory of homes for sale increases, Cocke said it was possible home prices could drop.

Cocke, who said her sales this year are keeping pace with 2009, said banks have been accelerating short sales.  “The banks have figured out that they get more for short sales than going with a foreclosure,” she said.

Sam Habib, an eight-year realty veteran at Century 21 M&M in San Jose, said he can’t complain about how his year is going.

His niche is selling REO —Real Estate Owned — homes for Bank of America.  He said the homes range in price from $350,000 to $700,000.

Some of the homes are in acceptable condition and others need a lot of work. Habib said Bank of America would spend money to repair the homes.

“They spent $11,000 on one house — paint, new kitchen, granite and floors,” he said.  “Bank of America spends money on houses.”

As an approved real estate agent for Bank of America, Habib goes through a process that can include evicting the residents and offering “cash for keys.”  The cash is traded for the residents leaving the property undamaged.  He said it is not hard to do $10,000 in damage to a home.

Typical cash offers range from $2,000 for a homeowner to $7,000 to break a lease with a tenant.

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