The Federal Reserve, in an emergency meeting on Tuesday, slashed the key rate to 3.5 percent, citing a weakening economic outlook. The move marks the Fed’s biggest rate cut — three quarters of a point — in more than 20 years.

As fears of a recession looms, the Fed said the rate-cut was to help restore confidence in the U.S. economy.

“While strains in short-term funding markets have eased somewhat, broader financial market conditions have continued to deteriorate and credit has tightened further for some businesses and households,” the Fed said in a public statement. “Moreover, incoming information indicates a deepening of the housing contraction as well as some softening in labor markets.”

NATIONAL ASSOCIATION OF REALTORS® Chief Economist Lawrence Yun says the 75-basis-point cut in the Fed funds was a good step in giving the economy the boost and sending a clear message to both the market and to consumers.

“This strong rate cut will help lower mortgage interest rates and lessen the burden of adjustable-rate loans that are resetting in the current environment,” Yun says. “It also could help stimulate business investment in the wake of market uncertainties. We commend the Federal Reserve Board on its bold action, but at the same time we urge it to keep a close watch to see if additional action is needed.”

The Fed also approved a decrease in the discount rate — which, among other things, impacts how consumers pay home equity lines of credit — to 4 percent.

The Fed’s next scheduled meeting is on Jan. 30, where analysts say another rate-cut may be likely.

Source: REALTOR® magazine online and Dow Jones Newswire (1/22/08)

Median Home Price

The median home price divides the real estate market into two equal halves. One half of all homes in the market were sold above the median home price, while the other half were sold below the median home price. For example, the median home price in Willow Glen for 2007 was $850,000, meaning that half of all homes sold in Willow Glen were priced above $850,000, and half were priced below $850,000. According to the California Association of Realtors the 2007 median home price in California was $488,640.

The median home price is one of the most common measurements used to compare real estate prices in different markets, areas, and periods. It is said to be less biased than the average since it is not as influenced by the top 2% of homes sold. For example, the average home sale price in Willow Glen was $939,318 in 2007, compared with a median home price of $850,000 for the same time period.

Mean (Average) Home Price

The average home price is the sum of prices of all homes sold in a certain area in a certain period, divided by the number of properties sold in the same area in that period. For example in the area of Willow Glen there were 49 single family homes sold in the month of January of 2007. The sum of these properties totaled $42,342,664. This number is then divided by 49, which equals $864,136. Which makes the average home price for a single family residence in Willow Glenn was $864,136 in January 2007.

Sales Price Per Square Foot

Real estate prices are also by the price of each square foot. This allows for a better comparison between differently priced homes as well as homes of different sizes. In this pricing measurement method, the median or average home price is divided by its square footage. For example, a 1,700 sq. ft. home was for sale for $650,000. To find the price per square foot, the price of $650,000 is divided by the square footage of 1,700. The result, $382.35, is the price per square foot for this particular home.

For additional information or help with the free market data reports that your receiving please give me a call and we can go through the data together.

Currently I listed an great Downtown San Jose Condo. This is a great 1 bedroom unit in the new Brickyard complex. This complex is a modern building with many amenities. These amenities include heated outdoor pool, fitness center, billiards, and business center. I could go on with the many more great features this complex has however; this is not what I am writing about today.When this unit came on the market there was a tenant living in the property. Needless to say he was not excited that sometime in the near future he was going to have to move. He had been in the property for a year and had enjoyed the complex and the amenities this building provided. The tenant also happens to be a very private person and the thought of people coming in and out of his home was upsetting to him. Personally, I try to not upset many people in this business. Being a Realtor you come in and out of many people lives. Word of mouth is how a good portion of my business is received. I had explained to him the law says that with 24 hour notice you can legally enter the property. This is also stated in the rental contract that he signed with the property management company. I have worked with San Jose investment properties in the past and at times it can be an easy working with tenants and at some time it is a bit difficult to work with tenants. This situation seemed as it was starting on the later of the two. From the beginning we made arrangements for the tenant to be present during showings. Doing this provided him with some comfort but unfortunately he was only willing to do showings after he got off work in the evening and early in the morning on weekends. This proved some difficult for other Realtors and their clients. My clients understood about the need to be flexible with the current tenant as having a rental property vacant is not an ideal situation for any real estate investor. I had to come up with a solution for my clients as they were missing out on some of the many showings that could have been scheduled. Then it came to me!I had recently gone to a Realtor conference in San Jose and came across a 3-D imagery solution. They make exact replicas of the property in spectacular 3-D image. While this is not the same as going into the property itself it would be a visual delight to see what the unit would look like with furniture and other household items inside. Potential buyers can view the layout of this unit in fine detail and they can determine is they are serious about viewing this unit. People seem to be more flexible on time when they are serious. This was a win-win for both parties involved. It is also a great eye catcher on the MLS!