http://danvillesanramon.com/print/story/print/2009/07/03/alamo-real-estate-yesterday-today---tomorrow


Danville Express

Real Estate - July 3, 2009

Alamo Real Estate: Yesterday, today - tomorrow?

Last month's column evoked a tremendous reader response. We received a lot of questions about where the Alamo market is going. It's not a question answered lightly or simply. My view is unless you know where you have been, where you are now and which direction you are headed, it is impossible to predict where you are going to end up because even then unforeseen impediments and opportunities cannot be known. I've included some historical charts (4 bedroom, 2-3 bath homes) and some food for thought in hopes that you can better form your own personal view.

Fortunately, or unfortunately, events completely out of our control will impact our current market trends. These include such things as interest rates, lending standards and availability of money to borrow for home loans. If interest rates remain low and capital becomes plentiful again and loan qualifications ease, the Alamo market decline will slow and eventually move upward as it has historically. Employment loss and fear over possible loss of employment are key factors. Current job losses are at an all time high and are not good for the Alamo market but job gains and improving confidence in continued employment will improve the situation. Inventory of homes, if it goes up, will have a negative impact on price appreciation; if inventory contracts, prices will probably rise.

Foreclosures are extremely important because foreclosed homes generally sell below market and become comparatives for homes residing within a mile of the foreclosed homes. If foreclosures increase significantly, the market will continue to fall, perhaps even more rapidly than it has thus far. If foreclosures drop or go away completely there will be a positive influence on Alamo price appreciation.

In all of this the truly great unknown is government intervention. Whether positive or negative, the government can exert a tremendous influence on home price and location desirability. They can borrow or print money, modify taxes, which increases or decreases personal income, stimulate home buying with incentives, encourage or discourage new business, impact the quality of our schools, affect transportation and yes, they can in all their good intentions unleash inflation, which may inflate home prices short term while decreasing the home's relative value and affordability long term. So, you see the simple answer is, there are too many unknowns to give a simple answer.

We've started a Web Blog and we are including timely market data not elsewhere available on it. To access the blog, type thecombsteam.blogspot.com/ into your Web browser and become blogging buddies with me.

Data presented in this column is based in whole or in part on data supplied by the Contra Costa and Alameda Multiple Listing Service and other quoted sources. Joe and Nancy Combs, Remax and the MLS Service do not guarantee the accuracy of this information.

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