San Jose Real Estate Prices? (San Francisco, Sacramento: sales, insurance, condo)

[islandsunshine]

Hi,
I am trying to find a site to track San Jose real estate prices. Does anyone know any accurate sites? I want to watch trends because I am thinking of investing in a couple of years and want to see what is happening.

How are the prices looking now? Any hope for them dropping in the near future?

Thanks!

[Luke9686]

I use homeinsight.com to track comps. They are pretty decent. I believe it's pretty acurate. A Realtor will be your best bet. Home prices are holding pretty strong. I think home prices are up 3-4% since last year, but inventory is high and time on the market is also pretty high. I currently invest in the San Jose area, so if you PM me we can talk a little more about it.

When I first moved here a little over a year ago, there was virtually no home on the market for under $600,000, but now there are several. I think that's because of all the talk about a market crash has people rushing to get out of their home. They are mostly in the more undesirable parts of town too, which tells you something.

I doubt prices will drop much in San Jose. They have been dropping in the east bay I believe. I read somewhere that the San Jose area is planning on adding 15,000 jobs in the next couple of years. They've added like 13,000 in the last couple years. If you do the math and use basic supply and demand principles, that will tell you prices probably won't come down much. Same amount of available land, due to us being surrounded by mountains, more jobs equals more people=more demand for available housing (prices go up).

We won't see the appreciation like a few years ago, but I doubt prices will go down.

What kind of investing are you planning?? You can PM me and we can talk further.

Luke

[aguamarina4u]

The best free site to look at homes on the market is the multiple lisiting website. It is not owned by a pushy real estate company neither so no one will contact you.

www.mlslistings.com

[aguamarina4u]

And for comps you can use another free website:

www.zillow.com

you will need to get the address.

[Luke9686]

Zillow.com is not even remotely accurate. That is the tax assessment on the property, not comps. Use actual comps (homes sold in same neighborhood within the last 6 months) to make your assumption. One and only one thing matters, and that is comps. Not list price or the tax assessment.

To look at properties, the best method is the MLS like previously mentioned.

[islandsunshine]

Actually zillow does show the comps. It shows surrounding house recent sales as well as allowing a person to see what the features of the other house was.

On their home page you can see their error margin and it shows the accuracy. Here is an example:

Within 10%/Selling Price: This is the percentage of homes in a location for which the Zestimate was within 10% of the transaction price. For example, in the Sacramento area, 73% of the time the Zestimate was within 10% of the selling price.
********************************************
Here is the figures for San Jose area:

San Francisco-Oakland-San Jose, CA CMSA percentage homes on Zillow 81%persentage of homes with Zestimates 81% Zestimate accuracy Four Stars 4.3%Median Error within 10% of selling price 76%. So they don't mention that this is for tax assessments only.

The comps are listed.

[Luke9686]

I don't want to get into a whole thing here about Zillow, but I am experienced in Real Estate and my experience has told me Zillow doesn't provide accurate comps. 76% of the time it is within 10% of the selling price in S.J. Well, when the average home here costs around $800,000, that is not a very accurate comp. It just means it's within +/- $80,000. I could look at any house in San Jose and guess that without going online.

The best comps come from realtors, or a website like the Bank of America webisite, which shows actaul sales. If Zillow shows actual sales why would there be any error margin at all?? I don't mean to be critical, but I am confused by the legitimacy of there "comps".

[aguamarina4u]

Islandsunshine...thanks for your input...you are spot on!

[Luke9686]

I'm just curious as to what type of investing you want to do?? Buy and hold, buy fix and flip, wholesaling, etc??

I would recommend you finding a local San Jose real estate investing club and going to some meetings to get network and gather info as to what other ivestors are doing. That way you also get your name out there so if another investor has a property that doesn't fit their criteria but is still a good deal, they will remember you. There are several good ones in San Jose. One charges like $40 per meeting. I have never been to that one but would not recommend going to one that charges that much. From their website I get the impression that they just have speakers that probably sell some sort of pipe dream.

There is a good website to find the investing clubs, it is: http://www.creonline.com/real-estate-clubs/ca.html

Also, I wouldn't recommend buying into any of the late night tv gurus. Most of that stuff is full of it. I do recommend a guy by the name of Steve Cook out of Baltimore. His course is modestly priced, and you don't have to keep paying more for the "next" level like the other guys. His is to the point, only what you need to know info. Also, if you email him he will personally respond. Good Guy. On his website there is also a forum where people post questions and more experienced investors answer and give tips. Sites like those are 100 times better than any Guru. The site is: http://reiplace.com/newsgroup/list.php?1,ng=REI

There is another one at reiclub.com. That is also a good one. Go to the forum portion and read the tons of info that previous people have posted.

I didn't mean to critisize your opinion of Zillow, it's just I don't think it is a good resource and I'll tell you why. On Zillow they say their "comps" are within 10% right. An actual comp is where a realtor, website, whatever gives you actual homes SOLD within the last 6 months a few blocks away from a particular address. There should be no error margin at all if they are actual comps.

Now say you want to do a buy, fix and flip. You have found a home for $585,000 from a motivated seller and the realtor pulls comps and they show FMV to be $700,000 for similar houses in the same area. You have a contractor look at the house and it needs $25,000 in work and will be completed in eight weeks.

Now in R.E. investing, the one and only thing that matters is numbers, and accurate comps are essential in calculating profit.

Ok, lets do some math. If you get a IO loan on the $585,000, the holding costs will be around $3410 per month, plus taxes and insurance. So that's about $6820 for eight weeks, not including taxes and insurance. To sell the house, you are going to pay the realtor 6%. So that equals $42,000 assuming a selling price of $700,000.

Lets say everything goes perfect. You close on time, finish work 1 week under schedule on exactly on budget, and sell the home for $700,000 exactly eight weeks from the date you originally bought it. You paid $585,000, put $25,000 into it, and had $6820 in holding costs (thats not counting taxes and insurance), plus the $42,000 you paid your realtor for selling it right on time. That equals $658,820. You stand to make a profit of $41180 in just eight weeks. Not bad for 2 months pay. Thats assuming you got accurate comps.

Now lets say you got the comps from Zillow, and they in this case were off by the 10%, on the low end. In this case the actaul value of the home would be $630,000, which don't look so good now. That great deal on the home you thought you had, in fact was not.

This is why actual recent home sales (comps) are essential in successful real estate investing. I don't want to discredit Zillow, but their "comps" from what I have seen are completely inaccurate a lot of the time. The best place to pull comps is from a realtor.

In fact, I just checked for my neighborhood and it says the house up the street sold for $1.2 Million. I know for a fact that it sold for $838,000. Now imagine that was a comp you pulled for a deal you were looking into.

Luke

[islandsunshine]

Hi Again,

OK look at this house and you can see it is in the middle of the zillow estimate. http://www.zillow.com/HomeDetails.htm?zprop=19790247 So I would think that is a pretty good tool to use in most cases. Now in the same area there is another house that is the size of a shack and it is coming up at 750K. It is forsale. It used to be listed on Zillow forsale and then they took it off zillow probably because it looked ridiculous to see the price from zillow showing at 750K and they were asking 1.4 No estimate could be off that much. Anyway, they were asking 1.4 and now they dropped it to 1.2 So is this house just way over priced or are the comps off that much? I think it is just way over priced.

I am not planning on taking a TV infomercial course. Don't worry about that.

I will be selling a condo in 2-3 years and wanted to pick up a piece of property in CA for a 7 yr investment. I was told this area is the hotest area in CA to buy in but I am not so sure about that. I am thinking Vegas might be a good shot when all the investors have to bail out because of the market turning on them. Also, Texas I believe is a sleeper and it is going to explode in prices soon. Austin area will be the new Silcon Valley.