Palo Alto Online : Palo Alto housing could rebound by end of year
The slowdown in the Palo Alto-and-environs housing market has not been as severe as the national trend, according to Mark Duval, chief investment officer for Opes Advisors. But local trends tend to parallel the stock market, not the national housing market. He predicted a turnaround could impact the local housing market as early as the end of 2009.

Inventory is already starting to increase, and more than a hundred potential buyers have been turning up at recent open houses, noted Coldwell Banker Realtor Steve Bellumori.

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Gone are the days of slapping on a coat of fresh paint, setting out some potted plants and offering a home “as is.” Instead, sellers need to assess what work needs to be done and either fix problems before the house goes on the market or be prepared to fully disclose any issues, the panelists said.

“This is the most difficult real estate market I’ve ever seen,” said Bellumori, a Realtor with more than 30 years’ experience.

Although the economic fortunes of this area are heavily tied to the stock market, “up to this point we’ve been an island of resiliency,” he said.

Bellumori pointed to the lack of land, strong entrepreneurial business climate, good public schools and great weather as key selling points for real estate.

But much of his job today is serving as “a reality versus a realty broker,” he said.

Although plenty of money is available, the guidelines for lenders have firmed up, Tracie Southerland, financial and mortgage advisor for Opes Advisors, said. “It’s not much different than 15 years ago,” she added.

Southerland compared housing accessibility in 2003 versus 2009, using a $1.5 million house as an example. In 2003, with 10 percent down, a 4 percent loan on $1.2 million and a second 3.5 percent loan on a $150,000 line of credit, one would need a $143,000 income to qualify.

Today, with 25 percent down and higher rates on the jumbo loan, one would need to earn $228,000 a year to buy the same house.

“The buyer pool has shrunk,” she said.

Phew. Well you heard it. Palo Alto’s tiny dip will be restored by the end of this year. Now… 15% annual YoY appreciation in 2010 will be unlikely… but would a more modest 8% be really that hard to achieve?

Bring it on!