This year the answer is not really a simple one.

San Jose REO properties are not going anywhere anytime soon as even more are expected in 2010 than in 2009. San Jose Real Estate is in a different real estate climate so don’t expect any drop bottom pricing and auction properties in the Silicon Valley. I have seen some condos last year get to the really low range of $120k or $140k but my clients were never able to win the bidding wars over these supposed low price San Jose condos. I also don’t feel that properties of any kind will drop below the $100k mark in the Silicon Valley as some had been predicting.

Foreclosures will increase in the near term, as many homeowners do not receive permanent mortgage modifications. With more foreclosures expeced to hit the marketplace we could see recent price increases drop back to early 2009 prices through 2010. I have a neighbor that has tried for the last 6 months to get a loan modification on his home and the banks seem to continue giving him the run around. First thing that he was told was that they could not help him till his loan was in default, why?

Prices have declined about 30% from their peak a few years ago and are expected to decline an additional 7% but the the worst declines should be over. Within 2009 Silicon Valley Single Family Homes saw a decline of 20.9% from the year before. Most of this decline was seen early on in the year with Oct. through Dec. of 2009 seeing an increase of 9.8% from 2008 average sale prices.

San Jose condos saw an even larger decline from 2008 prices at 22.8%. With a moderate increase of 2.6% in the last quarter of 2009 from the same quarter in 2008. Condos an average sold for 101.1% more than the listing price during this quarter meaning there was still a high enough demand to offer over asking to secure a condo transaction.

Stabalization in the San Jose housing market should be visable by the mid to end of the year with no significant gains expected till 2011.