Bubble? What Bubble?

If you bought a home 10 years ago you've seen its value increase approximately 130%. In the past two years, the market moved the other direction and the value dropped about 30%. After that decline, the home's value remains nearly twice what you paid for it. That's not exactly a bust. The good news is the abnormal feeding frenzy is over. The balloon has deflated a little but nothing burst. Housing values are stabilizing and lenders have even adopted a novel idea - perhaps people who borrow money should actually be qualified.

Now is the time smart shoppers are making their money. The not-so-smart will wait until the prices have gone back up. They may not have a long wait. Why?

Supply: It's no news that construction of new homes came to a screeching halt two years ago. The valley is still growing. People are still leaving the bay area and southern California to move here, partially because they can still buy twice as much home here for less dollars. Here's an eye opener — the MLS inventory of homes that was going up every month for three years has been going down.

Affordability: With low interest rates and lower prices, more people than ever can afford to buy. Sales have been down. Buyers are waiting in the wings. There is becoming a pent-up demand and the gates are about to bust open.

Momentum: After over two years of retraction the market is changing direction.

Interest: For a short time we are continuing to enjoy abnormally wonderfully low interest rates. It won't last. Never has, never will. Interest has always been cyclical. We were selling houses when mortgages were at 12-15%. I expect before long we will again. As sure as valley temperatures will increase in August, when inflation sets in our Federal Government it will raise rates faster than the thermometer.

Ok, you say now may be the perfect time to buy, but if I sell my current home I'll take a "big loss." I can't afford it. Oh contraire, home values are like the tide in the harbor. When the tide goes out, the level of all the boats drop. In simple terms, that means you can't possibly lose money by selling your home. In fact, it's the opposite. Remember you make money in real estate when you buy it, not when you sell. After your home is sold (at whatever value) you become a cash buyer. If you shop thoughtfully, you'll buy the next bigger, better home for even less.

This market is a chance of a lifetime for sellers. Not only can you now move up, you can lock in lower interest rates and lower taxes for the next 30 years. If you are new to the market and don't already own a home, here is a tip... Buy Now.