Francis' Silicon Valley Real Estate corner...

What is considered a bedroom?

2012-02-10T19:39:00.000-08:00

Little question, big answer...

The question often comes up in real estate as to what is considered a bedroom. In fact, sometimes the County records even have it wrong, and the answer lies in fact with local building codes, and health and safety requirements - which can usually be accessed at your City Hall's building department.

Without going into the details of exact dimensions, which of course make a big difference, we can say that the following characteristics have to be there, at the very least:

- there needs to be heat, and electricity

- natural light, and ventilation,

- a smoke (- and possibly a CO) detector,

- a sufficient way to exit directly to the outside of the house (door or window), also called ingress and egress --a little note here, think "firefighters".

- and a bedroom cannot have direct access to a garage (either a window or a door) because of possible toxic fumes.

There are a few more requirements, like the size of the windows, spacing of the electrical outlets, a minimum of heat, but among all these criteria, believe it or not, a closet is not a must, although it is often considered such by real estate agents ... A good source of info is always your local building department.
Have more input on the matter, or a story to share? Feel free to chime in, I love stories...

Francis

Silicon Valley Real Estate

Local market trends

useful links

PS: worthy cause: have you considered donating your extra fruits this season (if you have fruit bearing trees)?
contact: FullCircleSunnyvale.org

Facebook and the Silicon Valley Market....

2012-02-04T15:53:00.000-08:00

Everyone is speaking of the effect of the Facebook IPO on the real estate market around here. This is an interesting article that I wanted to share:
Coldwell Banker "Table Talk".

I have already experienced in all my activity in Palo Alto a definite "tightness" of the market. Several of the offers that I have placed recently met with many other offers, most of them very strong (like in: - cash! and very much over asking price).

Francis

Silicon Valley Real Estate

Local market trends

useful links

PS: worthy cause: have you considered donating your extra fruits this season (if you have fruit bearing trees)?
contact: FullCircleSunnyvale.org

Silicon Valley Luxury Home Prices Jump in December ...

2012-02-02T18:07:00.000-08:00

Silicon Valley Luxury Home Prices Jump in December, Coldwell Banker Residential Brokerage Reports.

Luxury home prices in Silicon Valley moved higher once again last month as the region’s high-end market continued to gain momentum, according to Coldwell Banker Residential Brokerage, the South Bay’s leading provider of luxury real estate services.

The median sale price for a million-dollar-plus home in Santa Clara County reached $1,471,000, up 8.9 percent from a year ago and 6 percent from November, when it stood at $1,387,000. ....

....Turley said the challenge for the South Bay’s real estate market continues to be a shortage of homes for sale, not lack of buyers.

“I think it’s important for sellers to get the message that the market is getting better in many areas and there are buyers willing to pay competitive prices for homes,” he said. “If you’ve been thinking about putting your home on the market, you shouldn’t wait any longer. It’s time to jump in.” .....

See the full article on this Coldwell Banker Residential Brokerage Report.

Francis

Silicon Valley Real Estate

Local market trends

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Mortgage rates

Voters place high value on homeownership !

2012-01-27T16:50:00.000-08:00

Voters place high value on homeownership.

By an overwhelming margin, American voters strongly value homeownership and would oppose efforts to weaken or eliminate the mortgage interest deduction or diminish a federal role to help qualified home buyers obtain affordable 30-year mortgages, according to a national survey conducted on behalf of the National Association of Home Builders. The survey gauged voters’ attitudes towards homeownership and housing policy issues.
The poll shows that three out of four voters – both owners and renters -- believe it is appropriate and reasonable for the federal government to provide tax incentives to promote homeownership. This sentiment cuts across regional and party line.

Highlights of the survey include:
Two-thirds of respondents say that the federal government should help home buyers to afford a long-term or 30-year, fixed-rate mortgage.

Nearly 75 percent of voters oppose eliminating the mortgage interest deduction.

Sixty-eight percent would be less likely to vote for a congressional candidate who proposed to abolish the deduction.

Ninety-six percent of homeowners are happy with their decision to own, and 84 percent who are “underwater” expressed the same sentiment.

Job uncertainty and saving for a downpayment and closing costs are the biggest barriers to buying a home.

More info on this article from the National Association of Home Builders.

Thanks for reading !
Francis

Silicon Valley Real Estate

Local market trends

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Current Mortgage rates

Housing Taxed to Pay for Extension of Benefits...

2012-01-17T17:41:00.000-08:00

Housing Taxed to Pay for Extension of Benefits .. things that go under the radar if you don't pay attention ...

The law signed by President Obama two weeks ago to extend the payroll tax cut and maintain Medicare payments and unemployment benefits uses increases in the fees charged by Fannie Mae and Freddie Mac to guarantee mortgages to help offset its costs. The law also uses funds from premiums charged for insurance on FHA loans. As a result, the Federal Housing Finance Agency has directed Fannie Mae and Freddie Mac to increase their guarantee fees effective April 1 and will remain in effect through September 30, 2021.

The National Association of REALTORS® (NAR) opposed the increase in fees to pay for non-housing-related purposes. Lenders who choose to pass this increase on to borrowers will likely increase the rate offered to a borrower by .1 percent sometime before April 1. Analysts estimate the increase in cost over 30 years to be between $4,000 and $5,400 on a $200,000 loan, or $11-15 per month.

Well, it's always better to be informed..

Francis

Silicon Valley Real Estate

Local market trends

useful links

Mortgage rates

Refinance Program for Underwater Borrowers - more info...

2012-01-11T15:28:00.000-08:00

To add more info to one of my previous blogs ( "Refinancing problems? Here is a suggestion" ) on the refinancing options for people owing more than the value of their home, I'd like to reproduce the information I just received from Joan Fischer from First American Home Buyers Protection (a home protection plan company), which originates from DSNews.com (Authors: Krista Franks and Carrie Bay).
A little long, but of great interest for some people.

Francis

Administration Announces Refinance Program for Underwater Borrowers
It’s official. The Federal Housing Finance Agency (FHFA) unveiled a new, revamped government mortgage refinancing program Monday.
The initiative involves a series of rule changes to the Home Affordable Refinance Program (HARP) to allow more underwater homeowners to reduce their mortgage debt by taking advantage of today’s rock-bottom interest rates.
Mortgages backed by Fannie Mae and Freddie Mac, and originally sold to the GSEs on or before May 31, 2009 are eligible for the program.

Under the revised HARP guidelines, the 125 percent loan-to-value (LTV) ceiling has been eliminated. Previously, only borrowers who owed up to 25 percent more than their home was worth could participate in HARP. That limitation has now been removed. The program will continue to be available to borrowers with LTV ratios above 80 percent.

The new program enhancements address several other key aspects of HARP that industry participants say have restricted its impact, including eliminating certain risk-based fees for borrowers who refinance into shorter-term mortgages and lowering fees for other borrowers, as well as allowing mortgage insurers to automatically transfer coverage from the original loan to the new loan.

In addition, Fannie Mae and Freddie Mac have done away with the requirement for a new property appraisal where there is a reliable AVM (automated valuation model) estimate already provided by the GSEs, and they’ve agreed to waive certain representations and warranties on loans refinanced through the program.

Not only are loans eligible for HARP considered “seasoned loans,” but a refinance helps borrowers strengthen their household finances, reducing the risk they pose to the GSEs. Thus, FHFA feels reps and warranties are not necessary for some of these loans.
With Monday’s announcement, the end date for HARP has been extended from June 30, 2012 to December 31, 2013.
The GSEs will release program instructions to lenders by the middle of next month, and FHFA expects some lenders will be ready to accept applications by December 1.

Since HARP was rolled out in early 2009, approximately 1 million homeowners have refinanced their mortgage loans through the program. FHFA estimates that with the revised guidelines, another 1 million will be able to take advantage of the program.
To qualify, borrowers must be current on their mortgage payments, but government officials believe by opening HARP up to more homeowners with higher thresholds of negative equity, it will help to prevent foreclosures by erasing the primary motivation behind strategic defaults.

Economists at the University of Chicago Booth School of Business estimate that roughly 35 percent of mortgage defaults are strategic. Numerous industry studies have found that homeowners who owe significantly more than their home is worth are more likely to throw in the towel and walk away from their mortgage debt even if they have the ability to continue making their payments.
“We anticipate that the package of improvements being made to HARP will reduce the Enterprises credit risk, bring greater stability to mortgage markets, and reduce foreclosure risks,” FHFA stated in its announcement Monday.
Fannie Mae and Freddie Mac also released statements in response to the announcement.

Michael J. Williams, Fannie Mae’s president and CEO, called the program a “welcome development.”
“By removing some of the impediments to refinance, lenders can more easily participate in the program allowing more eligible homeowners to take advantage of the low interest rates,” Williams stated.

Charles E. Haldeman, Jr., CEO of Freddie Mac said, “These changes mark another step on the road to recovery for the nation’s housing market.”

For more detailed information, please visit:
dsnews.com-program-for-underwater-borrowers-2011-10-24
Authors: Krista Franks and Carrie Bay
Source: DSNews.com

Rental market is tight here in the Silicon Valley

2012-01-08T15:03:00.000-08:00

I have been exposed to the rental market recently through 2 properties that I have put on the market for rent locally, one in Palo Alto, and one in Redwood City. (Not all agents deal with rentals BTW...).

I have experienced first hand what has been known for a while now: that the rental market is difficult in the Bay Area (for renters), and prices have gone up since last year - if I had to guess I would say by about 10% easily. In each instance these properties had several applications within a few days of being on MLS.

Several reasons can explain this increase:
- a better economic outlook in the Valley, leading more people to come here than people leaving the area, (which, incidentally, is also tied to registration in some schools such as the French-American schools and the German-American schools of the Bay)

- a significant number of people loosing their home (i.e. short sales and foreclosures) who find themselves renters suddenly,
- a relative lack of new construction - although there are some new projects being built around which will somewhat address this penury.

Although this is true in general nationwide, it is more accute in Cities like San Jose, as described in this recently published article in the Business Journal, which goes over a few of these figures and facts.

Thanks for reading !
Francis

Silicon Valley Real Estate

Local market trends

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Latest Mortgage rates

Appraisal problems in the real estate world ..

2012-01-02T18:26:00.000-08:00

Appraisals have always been a large part of the normal real estate transaction:

while a sales price is negotiated between the seller and the buyer, the bank has its say: they will lend to the buyer a percentage of the lower of the two figures: negotiated sales price, or appraised value.

If they do not think that the property is worth the negotiated price, they will lend less. But the thing is that real estate is not an exact science, and if you have 2 appraisals done on a property by two different appraisers, they will come up with 2 different values. With the crisis the way it has unfolded, appraisals have become very stringent, very conservative. Let's just say that the banks are a lot more careful with how they lend money.

It is apparently a big problems for builders too:

one out of three builders reported losing signed sales contracts during the preceding six months because appraisals on their homes were less than the contract sales price, according to a survey by the National Association of Home Builders (NAHB).

Builders claim that due to faulty appraisal practices, brand new homes with upgrades get compared to distressed properties that have been sitting vacant and in disrepair. The result, in many cases, has been that the new house gets appraised at less than the cost of construction.

According to the NAHB survey, 60 % of respondents reported they were experiencing appraisals coming in below their contract sales price. Of those reporting that they had encountered this problem, 53 % said the appraisal amount was actually less than the cost of building the home.

This has some very real consequences:

In normal times, housing accounts for more than 17 % of the nation’s GDP. Constructing 100 new homes generates more than 300 full-time jobs and $8.9 million in local, state and federal tax revenue that supports local schools and communities across the land.

More than half of the single-family builders and developers surveyed by NAHB indicated they had decided to put any new construction or land activity on hold until the financing climate improves.

One last word to buyers and sellers alike: unless the property sold is very desirable, and the buyer does not need a loan, this appraisal question may influence the outcome of the real estate transaction.

Francis Rolland

Silicon Valley Real Estate

Local market trends

useful links

Mortgage rates

Foreclosure Evictions Temporarily Suspended

2011-12-25T18:54:00.000-08:00

Foreclosure Evictions Temporarily Suspended

Both Freddie Mac and Fannie Mae are temporarily suspending all scheduled evictions involving foreclosed occupied single-family 1- to 4- unit residences with owned mortgages beginning December 19, 2011 through January 2, 2012.

The suspension will apply only to eviction lockouts related to Freddie Ma and Fannie Mae owned REO properties and will not affect other pre- or post-foreclosure processes. During this period, legal and administrative proceedings for evictions may continue, but families living in foreclosed properties will be permitted to remain in the home.

Francis

Silicon Valley Real Estate

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Mortgage rates

Silicon Valley Counties: real estate activity

2011-12-16T19:52:00.000-08:00

To keep in perspective: a lot is being said in the press about real estate in the Bay Area, including a lot of foreclosures and short sales happening all the time. But really, when you add all properties combined, (houses and condominiums, townhouses, PUD’s etc…), what really happened to the market in our area in the past 3 years? I think simple graphs can help us understand how we fare here in the Silicon Valley. In the Counties of San Mateo & Santa Clara, let us look at a simple measure: the average sales price:

Individual Cities can be very different. For instance Palo Alto has the following history in the same 3 years, showing here in blue the average time to sell a home:

the variations in sales prices are not as steep as the averages in the County.

Let me know and I will prepare a study of your own City/ neighborhood.
Thanks for reading !
Francis

Silicon Valley Real Estate

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Mortgage rates

On the local political front, a little note on Sunnyvale...

2011-12-09T17:45:00.000-08:00

The Silicon Valley Association of Realtors (SILVAR) Opposes Sunnyvale Plan to Regulate Real Estate Transactions

As part of the development of Sunnyvale's Climate Action Plan, the city is considering prohibiting the sale of property until an energy and water efficiency inspection is completed for owner occupied homes and energy efficiency retrofits are made to commercial property. The proposals were discussed as part of a city council study session this week.

SILVAR opposes this proposal because of the detrimental impact it will have on property owners and the ability to close transactions in Sunnyvale. Also, because the mandates would only impact properties at the time of sale, it would take decades before it would impact a significant amount of the housing stock.

SILVAR presented written testimony in opposition to the proposed mandate to the council, and SILVAR Past President Mark Burns had previously spoken at a meeting and asked the council to remove the recommendation from the draft report.

None of the council members spoke in favor of keeping the time of sale mandate in the draft. Council Member Chris Moylan made a strong statement in opposition to the recommendation. The draft climate action plan will be out for public comment and review over the next several months, so stay tuned for updates.
Thanks for reading.
Francis

Silicon Valley Real Estate

Local market trends

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Mortgage rates

The Marriage of Weddings and Real Estate...

2011-12-02T17:28:00.000-08:00

Many couples about to tie the knot are doing a different type of wedding registry nowadays, one that allows them to collect cash for a down payment on a home, according to a recent article in The Washington Times.

Dana Ostomel, founder of Deposit a Gift in New York City, says that about 15 % of their registries are to raise down-payment funds for a home and another 15 % are for home-improvement funds to pay for upgrades like a new roof or furniture. "Given that 75 % of today’s engaged couples already live together and are older, very often they are already established with the household basics that you find on a traditional registry," Ostomel said. "What they want is the gift of big-ticket items and longer term goals, like the gift of home ownership.”

The FHA permits gifts from a wedding to be used as a down payment, but lenders are required to document that the funds are gifts. About 27 % of first-time home buyers use gift money from relatives and friends for a down payment, according to a 2010 National Association of REALTORS® Profile of Home Buyers and Sellers survey. Source: The Washington Times

Francis Rolland

Silicon Valley Real Estate

Local market trends

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Mortgage rates

1st 10 Months, 2010 and 2011...

2011-11-29T17:12:00.000-08:00

Curious to see the evolution of average prices, from one year to the next?
It turns out it is pretty similar.

Here looking at the compared graphs of both the County of San Mateo, and Santa Clara, from one year to the next:

The one thing that appears at this point is a slight decrease in prices of single family residences in the County of Santa Clara. But this happened too at the end of 2010. Overall the curves are fairly similar.

What is also apparent in these graphs is that the average values are higher in the County of San Mateo than in the County of Santa Clara.
Finally, the end of the year is looking up for the San Mateo County so far.

Francis

Silicon Valley Real Estate

Local market trends

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Mortgage rates

Real Estate Eye Candy...

2011-11-22T16:56:00.000-08:00

The digital edition of the Previews Magazine winter issue has just been released. Click to see some of the most spectacular homes Northern California has to offer.

Francis Rolland

Silicon Valley Real Estate

Local market trends

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Mortgage rates

Bay Area Investors...

2011-11-17T15:48:00.000-08:00

Investors: the trend continues in the Bay Area with a lot of buyers investors:

- 17% in the County of Santa Clara,

- 21% in San Mateo County - 27.5% in Solano County
- 25% Contra Costa County.

Over 20% of all purchases are all cash, with no loan involved.

In fact, an interesting phenomenon occurs in some depressed areas:
in some condominium complexes, where over 15% of the units are delinquent, (typical) banks will not lend… So this leaves only cash buyers as potential buyers of these properties. Obviously these buyers purchase the units for the long term, hoping that the real estate market will improve enough that the complex will go up in value. The rents have increased so much in the past 2 years that the return on investment makes it a very viable deal.

An other problem can occur there though: if more than 50% of the units in a complex are non owner-occupied, loan are also almost impossible to obtain - or more expensive. One of the rules of most lenders is that this important percentage has to be over 50%. So that would leave future buyers and future homeowners in those complexes with a difficult situation: potential buyers who need a loan may not want to pay the extra fees and rates in order to get these loans.

Do not underestimate the need for good advice when you purchase a condominium. A seasoned agent is a must, to make sure you are informed. Here is a good informational page on this "condominium"subject.

Thanks for reading.
Francis

Silicon Valley Real Estate

Local market trends

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Mortgage rates

Silicon Valley: housing inventory

2011-11-09T23:27:00.000-08:00

To keep things in perspective, it is good to keep an eye on the inventory of homes for sale at a given point in time. Here is the inventory of all properties for sale (houses + PUD/condos) both in the whole County of Santa Clara, and in the area limited to the five Cities: Los Altos, Los Altos Hills, Palo Alto, Mountain View, and Menlo Park:

Lower inventory = tendency for prices to be sustained, or rise.
There are signifcantly fewer properties for sale now than last year. It is also interesting to note that the luxury market (over $1 million) has fewer homes on the market, which is reflecting the fact that the market has been more active in the past months.

Here in the Bay Area, as noted many times, demand is showing pretty strong fairly consistently.

As agents, we note that open houses are very busy, especially for houses, and certainly all the time for houses in the good school districts. In Palo Alto, multiple offers are the rule, as with all properties priced at market value, in good school districts.

It is worth noting again that about 30% of houses sell for over asking price in the County of Santa Clara.
A lot of them are foreclosures. - A foreclosure sale does not always mean that it is a fabulous deal, moneywise.

Interested in the same figures for only condominiums for instance? Let me know.
Francis Rolland

Silicon Valley Real Estate

Local market trends

useful links

Mortgage rates

Buy now with 3.5% down payment...

2011-11-04T16:02:00.000-07:00

If you have a stable income and if you are paying too much for rent, it can definitely make sense to buy with an FHA loan.
Many people believe that to even think of becoming a homeowner you must secure a 20% down payment. This is difficult to do for a lot of aspiring-to-be-homeowners. But there is another way:

think: " FHA loans ".

FHA facts to keep in mind:

- 3.5% down. Low down payment - less money out of pocket and 96.5% loan-to-value.

- 100% Gift allowed for down payment and closing costs,

- Any buyer can buy like this, not just first-time home buyers,

- minimum FICO 640,

- Long term financing: 30 year fixed, or adjustable,

- Loan limits up to $625,500, depending on the County,

- Non occupant co-borrowers are ok

- Purchase and "refis" are allowed,

Prior bankruptcies?: yes very possibly. See the specific rules, but on-time payments allow FHA borrowing fairly quickly afterwards.

There are some very nice homes that one can buy for less than $500,000 in Santa Clara for instance, and you'd only need ... about $20k. With an FHA loan you do pay what is called mortgage insurance, a way for the lender to be insured against potential future defaults. But even with this mortgage insurance, these loans can be pretty attractive when everything is said and done, because banks do not mind doing such loans: they have ... mortgage insurance. Hence the very attractive rates.

If this gives you food for thoughts, let me know: I can help! ...or for someone you know, pass it along!..

Francis

Silicon Valley Real Estate

Local market trends

useful links

PS: Mortgage rates: Week ending 11/3/2011

- 30-yr. fixed: 4.0 fees/points: 0.7%

- 15-yr. fixed: 3.31 fees/points: 0.7%

- 1-yr. adjustable: 2.88% Fees/points: 0.6%
(Source: Freddie Mac)

Who does not cringe at rejection?..

2011-10-28T16:41:00.000-07:00

Triggers for rejection. - Loan rejection that is.

Last year, more than two million people were turned down for homes, according to federal data, often because the applicants didn’t meet certain lender requirements or because their applications were incomplete or otherwise problematic. With lenders’ underwriting criteria becoming more rigorous in recent years, it’s important buyers know the most common triggers for mortgage-loan rejection.

• Insufficient income: well, this is straightforward… But also, lenders typically look for at least a two-year track record of income, which could hurt those who have changed jobs recently.

• Cloudy financial picture: Generally, total debt payments, including the mortgage, cannot exceed 45 to 50 percent of a borrower’s adjusted gross monthly income. Overtime and bonuses are included only if the borrower has worked for the same employer at least two years, and has a history of receiving them.

• Poor credit: Lenders typically reject applicants with FICO scores below 620.

• Low appraisal: One of the predominant reasons buyers are turned down for home loans is because the appraisal on the property is too low. If this is the case, the bank will often loan less, which can create a problem for the cash-tight buyers.

• Property problems: Sometimes issues turn up within a house, like a major repair or safety issue that needs to be addressed, before an application can be approved.

• Information mix-ups: Approximately 12 percent of new mortgage applications were denied because of unverifiable information or incomplete credit applications, according to the Federal Financial Institutions Examination Council.

The full story can be accessed here.

If you need any lender referrals, don't hesitate to contact me. When you buy a home or refinance, you rely a lot on your loan agent.
Thanks for reading!...
Francis

Silicon Valley Real Estate

Local market trends

useful links

PS: Mortgage rates: Week ending 10/27/2011
- 30-yr. fixed: 4.11 fees/points: 0.8%
- 15-yr. fixed: 3.38 fees/points: 0.8%-
- 1-yr. adjustable: 2.94% Fees/points: 0.6%
(Source: Freddie Mac)

Refinancing & the Economy .. A Missing Link ...

2011-10-25T10:01:00.000-07:00

There is a lot of noise right now about the “occupy wall street” movement. And the economy is giving ulcers to everyone. The world is full of catch 22’s in many important areas. Consider the following situation if you have a second with me, and tell me if this is not illogical:

Someone wants to refinance their property but the value has gone down so much that it is under the value of the loan. The rules of the banks, the way they are right now, are such that the bank will not allow the borrower to refinance the same amount of loan as before (because of the “loan-to-value ratios” rules). How does that make sense? The lender is taking a much bigger risk in most cases by leaving someone obligated to pay a high interest rate that will sink them, when they could pay a lower rate and have a better chance of affording their loan.

The borrower, in front of such an illogical catch 22, decides to stop paying and to go to foreclosure. If you look at my previous blog, it is clear to many analysts that a lot of these borrowers are not inherently a “bad risk”, just because they decided to default on a loan that they cannot change. When these borrowers have only one default on their record, and it is this kind of default, they are often ready to buy something else, at today’s value, with today’s interest rate. It is often cheaper than to rent. But they cannot do it because of their credit history (since they just defaulted on a loan).

The system is blocked. It is thought that many people, if they were allowed to buy a new property, would prefer that option to renting.

- 1/ the market would be a lot less depressed, as many properties would sell instead of sitting forever,

- 2/ because more properties would sell, the market values would be more sustained and in many cases would slightly go up. This in turn would help the banks, since the total market value of their distressed properties would be higher.

This blog does not go into judging anyone, or deciding if it would be fair to do this or that. But the difficulty to refinance falls under rules that are counter-intuitive in my opinion.

As I write this I learn that the HARP program (see one of my previous blogs on refinancing) has just been expanded to the end of 2013, and removed the 125% ceiling on “loan-to-value” cap for fixed rate mortgages backed by Fannie Mae and Freddie Mac. More on this PDF from the Federal Housing Finance Agency. However, I need to underline that it is for mortgages backed by FNMA and Freddie Mac only...

Still, it is estimated that between 1.5 and 2 million people may take advantage of these new rules. (just heard on NPR).

Couldn't all the banks think in the same manner, for their own ultimate good? And couldn't they waive some qualifying rules on a case-by-case basis? - It would make a lot of "cents" to them in the end.

Thanks for reading,

Francis

Silicon Valley Real Estate

Local market trends

useful links

The luxury market in the Silicon Valley….

2011-10-21T17:13:00.000-07:00

A total of 207 homes sold for more than $1 million in Santa Clara County in August, essentially flat from the previous month’s 208 transactions but down from the 221 sales recorded in August 2010.
However, the median sale price of a million-dollar home in the South Bay climbed to $1,387,000, up 2.7 percent from the $1.35 million median sale price recorded in July and August of last year.

Other metrics also showed the high-end market continues to recover: There were 41 multi-million-dollar sales last month, up from 34 in July and 36 in August 2010. And sellers received 100 percent of their asking price on average, up from 98 percent a year ago and 99 percent the previous month.

The figures were derived from Multiple Listing Service data of all homes sold in Santa Clara County for more than $1 million in August.

“The luxury segment of the Silicon Valley housing market continues to strengthen, along with the high-end markets in other parts of the Bay Area,” said Rick Turley, president of Coldwell Banker Residential Brokerage. “Both sales and prices are firming up in the South Bay, San Francisco, the Peninsula and Marin County. That could be a leading indicator of how the overall market will fare in the months ahead.”

Turley noted that the high-end market often recovers first following a downturn. Last month, DataQuick, the La Jolla-based real estate research firm, reported that overall sales in the Bay Area last month rose 12.2 percent, although the median price dipped 3.9 percent.

Some key findings from this month’s Coldwell Banker Residential Brokerage luxury report:

• The most expensive sale in Santa Clara County last month was a five-bedroom, nine-bath 6,400-square foot home in Los Gatos that sold for $5.2 million;

• Los Altos boasted the most million-dollar sales last month with 43, followed by Palo Alto with 33, San Jose with 32, Saratoga with 29, and Cupertino with 17;

• Homes closing last month stayed on the market an average of 38 days, the same as the previous month and up from 36 days a year ago.

The Silicon Valley Luxury Housing Market Report is a monthly report by Coldwell Banker Residential Brokerage, a specialist in high-end real estate sales.

Thanks for reading!
Francis Rolland

Silicon Valley Real Estate

Local market trends

useful links

Palo Alto, Mountain View, Los Altos …

2011-10-19T16:12:00.000-07:00

We know that the market is very localized, and that even within a City the market is markedly different from low-end to high-end, from an area to an other, and of course whether it is a house or a condominium.
How does it look all combined??

This is the way the market looks for these 3 Cities combined, houses and condominiums and townhouses, all together, over the past 2 and a half years.

Some will describe it as “definitely hesitant”,

Some will say it is “getting better”,

Others will say that the worse was in mid 09.

It is difficult to interpret such graphs because a low average price per square foot can just mean that more properties of a larger size sold that month, and the median and average price mean something different, - although the curves are fairly parallel. This is a summary of many individual stories.

But one thing is certain, the market is alive and kicking here, and in most of the Silicon Valley.

Also, let’s remember that about 35% of houses sell for over asking price in the County, and a good 30 to 35% of sales are cash sales, with no loan involved … We are fortunate.

Curious about your City, or your zip code? Let me know, I can help ;-)

Francis

Silicon Valley Real Estate

Local market trends

useful links

Remember: our Free E-Waste Collection and Shredding Event,
on: 10/22/11, Sat. 9 am to 4 pm for E-Waste Collection
10 am to 2 pm for Shredding.
address: 161 S. San Antonio Rd, Los Altos, CA 94022

KnowYourOptions.com ...

2011-10-14T22:10:00.000-07:00

Homeowners in difficulty: KnowYourOptions.com

For homeowners who are in difficulty to make their mortgage payments or cannot refinance, there are several options other than Short Sales or letting the property be sold through the foreclosure process.

Fannie Mae has set up a website: www.knowyouroptions.com/ . That site lists the five possible options that sellers should explore with their legal and financial advisors before deciding to list their property as a Short Sale or letting it go through a foreclosure action, if the loan is owned by Fannie Mae.

This web site is all about getting informed, knowing all the possibilities available to be able to stay in your home, the options if you do have to leave your home, and how to contact a help center – if the loan is owned by Fannie Mae.

In-person and telephone support for homeowners is available in the “Mortgage Help Centers”.

These Centers have been established to help homeowners with loans owned by Fannie Mae. At a Mortgage Help Center, one can meet directly with dedicated on-site staff and experienced housing advisors to discuss one’s mortgage situation. English and Spanish advisors are available, and all services offered by the Fannie Mae Mortgage Help Center are FREE.

Of course, hopefully this is not something that is needed...

Francis Rolland

Silicon Valley Real Estate

Local market trends

useful links

PS: Mortgage rates: Week ending 10/06/2011:
- 30-yr. fixed: 3.94 fees/points: 0.8%
- 15-yr. fixed: 3.26 fees/points: 0.8%
- 1-yr. adjustable: 2.95% Fees/points: 0.5%
(Source: Freddie Mac)

Worth noting: our Free E-Waste Collection and Shredding Event,
on: 10/22/11, Sat. 9 am to 4 pm for E-Waste Collection
10 am to 2 pm for Shredding.
address: 161 S. San Antonio Rd, Los Altos, CA 94022

Refinancing? Current loan limits expire this week...

2011-09-30T09:27:00.000-07:00

Current loan limits expire this week (today on Friday).

Current conforming loan limits are scheduled to expire Friday, Sept. 30. The maximum FHA, Fannie Mae, and Freddie Mac conforming loan limit will decline to $625,500 beginning Oct. 1, 2011, from the current $729,750 limit, though the majority of counties will fall far below the $625,500 maximum.

The conforming loan limit determines the maximum size of a mortgage that FHA, Fannie Mae, and Freddie Mac government-sponsored enterprises (GSEs) can buy or guarantee. Non-conforming or jumbo loans typically carry a higher mortgage interest rate than a conforming loan and require a higher down payment, increasing the monthly payment and negatively impacting housing affordability for California home buyers.

An estimated 30,000 people will be impacted in California by this new limit.
If you are thinking of refinancing, or a purchase, I can certainly help you choose a reliable, professional lender.

Francis Rolland
Silicon Valley real estate
Local real estate links.

►worthy to note: our next E-Waste collection and shredding event: 10/22/11
at: 161 S. San Antonio Rd, Los Altos, CA 94022.
It's easy, it's free, it's green! Stop by for free shredding service and bring your electronic recyclables with you! TV's, cell phones, batteries, computer stuff.... ;-)

Can you be an "accidental landlord" ?

2011-09-23T22:05:00.000-07:00

Reading this article from Rismedia called: “sign of the times, accidental landlords”, it reminded me of several situations I have seen recently here in the Bay Area, with clients who became exactly that: an accidental landlord.

What do you do indeed when you need to move, but your property would not sell for what you bought it for?

One solution is to sell it at a loss, and recuperate this loss in the new purchase, which is going to be less expensive too; but you cannot do this as easily nowadays. It used to be that you could purchase a home and get a “bridge loan” from the house you were moving from. The bridge loan was predicated on the house being sold within 2 or 3 months. Banks did not have any problem doing this because they were pretty sure your old house would sell fairly quickly. You cannot get such a bridge loan today, and therefore you have to sell your previous house first, and then move to temporary housing and start looking for your new house. Not very convenient…

Another solution is to buy subject to the sale of your current home. This is harder to do than to say; often it means you’d have to pay more, to compensate for a weak bargaining position. It is almost impossible to do if you are looking for a desirable property, and other people want it too.

The remaining option is to rent out your previous house and purchase your new home. But there again the banks are a lot tighter with their money (hum.., your money…), and the rules are much stricter. The ideal is when you have enough income to qualify for 2 loans easily. If you are not in this ideal case, you need to show that your previous house has a tenant in place before they will lend you on your purchase. And there you go, you are an “accidental landlord”.

People do not intend to remain a landlord for long, just the time for the market to improve enough that it will make sense to sell. But actually, if you are going to have savings, it makes sense to spread them over several investment vehicles: the usual suspects are “real estate”, CD’s, bonds, stocks and cash. Over the long term, a real estate investment can be a good retirement account. But remember to check with your tax advisor: depending on your specific situation, the tax implications will not be the same.

If you think you may find yourself in such a situation, call me to discuss your options.
Thanks for reading!
Francis
http://www.frolland.com/
http://www.francisrolland.com/

Fix Ups for Property Resale

2011-09-16T15:59:00.000-07:00

Are you a homeowner preparing your home for sale? If you are, you may want to consider these 6 real estate fix up tips. They will help you increase your chances of getting the most return at the time of sale, for a modest cost. We can often overlook the simplest things but these 6 tips will ensure that you optimize for the maximum payout.

"Money wisely spent is money wisely earned."

Cleaning and de-cluttering - costs $290 but yields a $1,990 Return (put things in boxes, since they will end up in boxes anyway)
Brightening - costs $375 but yields a $1,550 Return (clean and clear windows, update light fixtures)...
Smart staging - costs $550 but yields a $2,194 Return
Landscaping enhancements - costs $540 but yields a $1,932 return (new flowers, nice colors, clean up...)
Repairing electrical or plumbing - costs $535 but yields a $1,505 Return - time to repair these little things that have been left alone...

Replacing or shampooing dirty carpets - costs $647 but yields a $1,739 Return

The yields are estimates of course, but a good indication of the results.

The ROI (return on investment) on performing these property fix ups is pretty good, so consider them closely. The time spent performing the tasks are plainly worth the effort.

The 6 home fix up tips were the result of a Home Sale Maximizer Survey released by HomeGain.com. - the result of a survey of nearly 600 real estate professionals to try to find out what pays the most. The survey was to aid home sellers in determining what to consider to prepare their homes for sale time.

Let me know, as always, how I can help!

Francis,

Silicon Valley Specialist

Local Real Estate resources

Silicon Valley Market Trends

Buyer beware! lenders need to know everything!

2011-09-08T09:37:00.000-07:00

Buyers beware... When applying for a loan: lenders need to know everything!

1- All funds used for the down payment and closing costs are going to be very carefully scrutinized by the lender:

you must provide detailed and accurate information to show which accounts the funds are in and where the funds are coming from,
you must document the source of any funds that have been in your accounts for less than 2 months,
any changes that occur to your financial condition will need to be explained to the lender,
changes to your assets, employment, income or credit scores during the escrow could jeopardize your ability to qualify,
provide complete documents, - all pages!
provide documents with names, addresses and account numbers.

2- The lender is going to require a letter of explanation and/or support documentation for:

recent inquiries or derogatory items on your credit report,
recent deposits, transfers of money etc... in your accounts,
evidence earnest money deposit has cleared your account. ... hum, they don't trust much...

3- If you are receiving Gift Funds the lender will require:

a gift letter signed by you and the gift donor,
evidence of the donors ability to gift the funds (bank statement),
evidence of the receipt of the gift funds, in your account.

4- Things not to do during an escrow:

do not transfer funds between accounts, nor make large deposits into your bank accounts,
do not buy a car!... or spend large amounts of money on stuff..
do not change jobs,
do not close or open credit card accounts.

Yes, it is a real experience, to get a loan nowadays! ;-)

For lenders referrals, do not hesitate to contact me.

Francis

Silicon Valley Real Estate

Local market trends

useful links

Why it is a good time to buy real estate...

2011-08-19T07:52:00.000-07:00

Real estate is positioned well for the future...

From our Coldwell Banker blog...
* "Baby boomers are in their prime real estate buying years and are 78 million strong.

* The Pew Research Center reports minority homeownership levels still have room for improvement. The gaps between white and minority households remain significant with homeownership rates for Asians (59.1 percent), African-Americans (47.5 percent) and Latinos (48.9 percent) well below the 74.9 percent among whites.

* Immigrants are moving to the U.S. by the tune of 1.1-1.5 million a year depending on the source. These are legal immigrants who add value to our country and society. They need housing.

* Echo boomers will likely have similar economic impact in coming years that their baby boomers parents have had through their lives. Echo boomers are born between 1977 and 1994 and are 73 million strong and according to the Joint Center for Housing Studies at Harvard University, 4 million turn 21 each year.

* Household formation is also an important statistic. The Joint Center for Housing Studies at Harvard University projects at least 1.25 million households will be created annually from 2010-2020 and will be led by the echo boomers.

* Between 2010 and 2020, the Census Bureau projects U.S. household growth to be in the range of 1.25 to 1.5 million per year, which will create an additional demand for housing. This should equate to a demand for 12.5 -15 million total new households during this decade.

* People move for lifestyle. There have been 4 million marriages and a record more than 8 million babies born in the last two years indicating there is demand for housing. Many of these growing families have not bought a home and are either renting or living with family as they save for a down payment. We know there is pent up demand." ....

Why is now a smart time to buy?

"I.I.I.P. Inventory, interest rates, incentives and price. In most markets around the nation, home inventory has increased giving buyers a greater choice. At the same time, mortgage rates remain at near historic lows and home prices have seemingly stabilized. 2010 saw median prices increase slightly by 0.2% to $172,900. This has made home affordability the best since at least 1973 and maybe ever."

Thanks for reading, and let me know how I can help, always!
Francis
Silicon Valley Real Estate
Los Altos Specialist

Rates:
Mortgage rates: Week ending 8/4/2011 30-yr. fixed: 4.39 fees/points: 0.8% 15-yr. fixed: 3.54 fees/points: 0.7% 1-yr. adjustable: 3.02% Fees/points: 0.5% (Source: Freddie Mac)

Valuable Appliance Longevity Report Every Home Owner Must Have

2011-07-20T17:57:00.000-07:00

Have you ever thought about the life expectancy of your household appliances? How about the materials used to build your home? Well, if you are like many home owners today, you probably haven't given it much thought at all. I mean, who really needs to know how long the shingles on the roof are going to last, anyway, right? But, that is just the point; there are some things, you, the home owner, need to know.

Whether you are buying a home or thinking of selling your home, it is important to understand the estimated life expectancy of all your appliances and other home materials. Buying or selling a house without factoring in the cost to fix aging materials can cost you in the long run.

There are many factors involved that can age a household appliance like a refrigerator or building material such as siding.

• Weather
• Maintenance
• How an item is used.

Here are some examples depending on above factors:
• A refrigerator may last up to 13 years.
• Cooks, - your kitchen cabinets have a life expectancy of 50 years.
• Outdoor lovers, your outside deck has only a life span of 20 years.
• Vinyl Siding will last for the lifetime of the house, and
• Your wood floor will endure for 100 years. Of course, all under ideal circumstances.

The NAHB, National Association of Home Builders released a report in 2007 entitled, "Study of Life Expectancy of Home Components." They list appliances, building materials, as well as other components you may never have thought about. The comprehensive report is only 19 pages long yet boasts as a worthy read of any home owner or potential buyer.

Let me know, as always, how I can help!

Francis

Silicon Valley Specialist
Local Real Estate resources
Silicon Valley Market Trends

Do you rent out one of your properties?

2011-07-14T17:33:00.000-07:00

Reporting is now easier for mom-and-pop landlords.

I had send earlier in the year an email to all my clients who rented out a property, to alert them about a new IRS reporting requirement.

Good news: this has changed, for the better. Here is how:

Households that find renters for a second property but are not in the business of real estate don’t have to send an IRS Form 1099 to vendors if the vendors do more than $600 worth of work in a year. Landlords have faced the 1099 reporting requirement for a while, and that requirement continues to apply to them, but last year the requirement was extended to households and entities that rent out property as a sideline but are not in the rental housing trade.

The National Association of Realtors and others strongly opposed that expansion and succeeded in persuading lawmakers to repeal it, which Congress did.

President Obama signed the repeal into law in late April, so, now the requirement applies as it always has: just to those in the business of real estate.

Francis Rolland

Silicon Valley real estate

Study: Homeowners Who Default on Mortgage Alone Not a Credit Risk

2011-07-12T12:43:00.000-07:00

Today, many homeowners who defaulted on their mortgage payments have asked the question, "Will my mortgage delinquencies make me a higher credit risk to lenders?"

Good question.

On the surface, it is obvious that falling behind and becoming consistently delinquent on any bill is not a financially sound thing to do. However, your credit rating may not be as tarnished as some would leave you to believe.

A homeowner needs to consider what establishes poor credit and good credit in the eyes of the lender. Surprisingly enough, if you have other debt that you are in good standing with, such as credit cards or an auto loan, you will be less likely deemed as a credit risk. Those who have defaulted on their mortgage payment as well as other accounts are higher risks to a lending institution. The study below reveals why.

Mortgage-Only Defaulters

Transunion. , a global leader in credit and information management, released a study which stated, "...consumers who only defaulted on their mortgage during the economic recession were far better risks than those consumers who went delinquent on multiple credit accounts." This particular study explained that consumers, who were only default with their mortgage payment, displayed stronger ability to stay current with other loans.
"There appears to be a pocket of opportunity among mortgage-only defaulters that is not the result of excess liquidity, but rather the unique circumstances of the recent recession," said Steve Chaouki, group vice president in TransUnion's financial services business unit. "This new market segment that the recession created is an important one for lenders to understand. They have the potential, today, to be stronger and more reliable customers."

Breaking it down…
• The lack of cash flow that resulted in defaulted mortgage payments does not by itself make the consumer “high risk” to a lender.
• You are a risk if you have multiple delinquencies on other accounts including the mortgage.
• You are not a risk if you have mortgage-only defaults but are current with other debt, such as a car loan or credit card.

In conclusion, if you are a mortgage-only defaulter you have more hope than those who are not and should not consider yourself a high risk. For more information, here is the link again to the Transunion study Mortgage-only Defaulters.

Let me know, as always, how I can help!
Francis

Silicon Valley Specialist
Local _Real Estate resources
Silicon Valley Market Trends

Refinancing problems? here is a suggestion...

2011-07-07T16:58:00.000-07:00

Are you trying to refinance but you cannot because your equity is too low?

This is the classic catch 22 in which you cannot take advantage of great rates because the bank’s appraisal is too low.

The HARP refinancing program is addressing precisely this need. HARP: Home Affordable Refinance Program, administered by Fannie Mae and Freddie Mac.

Good News !!

Set to expire June 30, 2011, this program has been extended one year. In 2010, Fannie Mae and Freddie Mac purchased or guaranteed more than 6.8 million refinanced mortgages. Of this total, 621,800 were HARP refinances with Loan-To-Values between 80 percent and 125 percent !! This is more than 3 times the number in 2009.
Some limitations apply of course, but fairly reasonable. One of them, for instance, is that you need to spend more than 31% of your pre-tax income on your mortgage payment. (thank you Nicolas! ;-) for the input). Check out the details on the Freddie Mac web site, or the Fannie Mae web site: Fannie Mae web site.

Another program worthy of noting if you have financial problems: the "Making Home Affordable" Program.

Thanks for reading!
Francis

Silicon Valley real estate
Search the MLS

Some perspective on the Silicon Valley market....

2011-07-02T14:25:00.000-07:00

Some recent headlines turned heads and generated a lot of questions among my clients recently, headlines such as: “Case-Schiller Down 5.1%; What Will Stop It?” and “The Depressing State of Housing”.

What is really going on in the Valley? I find that chosen graphs speak much better than headlines. Comparison of the first 5 months of last year, with the same months this year, for the Counties of Santa Clara and San Mateo:

This graph shows roughly the same movement as last year. If anything, it shows a better situation, since we do not have in 2011 the government incentives for 1st time homebuyers that we had in 2010 (Calif. 1st time homebuyers credits, and federal incentives). These created last year a rush to buy before June, which does not exist in 2011.

Comparison charts for Sunnyvale and Mountain View:

Comparison charts for Los Altos and Palo Alto:

Average prices can vary a lot from month to month. These charts just show that overall the market is fairly the same as last year, at the very least.
Thanks for reading!
Francis

Mortgage rates: Week ending 6/23/2011: - 30-yr. fixed: 4.50 fees/points: 0.8% - 15-yr. fixed: 3.69 fees/points: 0.7% - 1-yr. adjustable: 2.99% Fees/points: 0.5% (Source: Freddie Mac)

Silicon Valley real estate resource
Real estate links of interest

Monoxide detectors: don't forget: it's the law...

2011-06-24T19:27:00.000-07:00

If you have a rental property, and if you receive my monthly e-newsletter, you have probably already received about 6 months ago a note about this new law that has passed: you need a monoxide detector in the house as of the 1st of July.

Whereas in your own house, there is little chance to have an inspector come and check you out, you must remember if you rent a property out that it is mandatory.
Typically you would put a CO detector on each level of your house, near appliances that emit carbon monoxide (furnace, wall heater, stoves, etc... although other sources of carbon monoxide include cars - in a garage for instance, and fireplaces). Where exactly should it go? it is advised to "follow the manufacturer's instructions".

Also, it is good to check with your City: some Cities have special requirements. Here is the link to the City of Palo Alto smoke and Co detector requirements.

Carbon monoxide is particularly dangerous: it has no color and no odor.
If you have an old furnace in your home, or a wall heater, you have a risk of having a source of CO leakage.
Detectors seemed to cost at least $45 or $50 about 6 months ago, but it is possible nowadays to find the units below $30.

Do you find this note useful? Forward it to someone you know who might need to read it.
- or "like" it on FB

Thank you, have a great week-end!
Francis

Silicon Valley Real Estate
local resources (schools, Cities, etc...)

In the Valley: sell or become a landlord?

2011-06-17T09:44:00.000-07:00

Sell or become a landlord? That is the question. A study by Zillow recently showed that more than 1/4 of homeowners considering a move in the next 3 years were considering renting out their home.

This question is being asked more often right now as people either are moving away from the Valley, or want to move up or down to change something to their present lifestyle.
It is asked more often now that values have gone down from, may be, a high purchase price 3 or 4 years ago.
It is asked more often now that banks do not grant "bridge loans" like they used to, and now that rental prices go up (Nationwide, but also locally), and that it seems like just a matter of time until prices go up from where they stand now (even if it is not doing so like it was in the past 15 years).

To keep a property for ever makes a lot of sense to diversify one's portfolio. It can and should be, long-term, a part of a retirement account if you already have a lot of money in the banking system. Down the line, in 20 years, it will seem like impossible to afford to rent the house that today seems so high in price.

Today, as many people loose their property to short sale or foreclosure, they need to find a place to live, and this explains in part why there is pressure on rental prices.

If you are faced with this dilemna, consider the following factors:
- your confidence in the future of home values in the Valley,
- the tax implications, which could be positive or neutral for you depending on your tax situation and income, and the way the property would be managed,
- how comfortable you are with 2 mortgages,
- appeal of that kind of diversification of your retirement assets,
- who will manage the property?
- are you cut out to be a landlord?

Note: if you are moving up or down in lifestyle, the money that you may "lose" in the sale of your real estate asset might be quite equivalent to what you will gain by buying a cheaper replacement property. So then it is a question of strategizing such a move. If you are in this situation, contact me and we will review all the options together.

Thanks for reading,
Francis

Silicon Valley real estate news
Smart Market Trends

Time to appeal that tax bill?

2011-06-10T22:21:00.000-07:00

Is it time to appeal your tax bill?

It is that time of the year again when the Tax Assessor's Office of the County of Santa Clara sends to all homeowners a notice of the assessed value of their property.

If you think it is too high for your home (it always seems too high doesn't it, since you pay a yearly percentage of the assessed value) you have between July 2 and September 15 to file a review, or an appeal - depending on when you want to contest it. The specific rules, and the specific dates to check for are on this page of the Santa Clara County official web site.

Where I can help is by providing you with MLS sales data that happened around the turn of the year of assessment. This is information that you can send to the County in support of your request, along with any other data you may have (that would not be in the Realtors' MLS for instance).

One thing to remember though, as they point out on the web site - and I quote: "IMPORTANT NOTE: It is very important to understand that filing an assessment appeal does not relieve an owner of the responsibility for paying any outstanding tax bill no matter how unfair the owner may feel a bill might be."
.. no surprise there I guess :-\

For the County of San Mateo, the dates when one can appeal the assessed home value are different. Details can be found on this page: County of San Mateo Treasurer Tax Collector.

Let me know, as always, how I can help!
Francis

Silicon Valley Realtor
Local Real Estate resources

A link worthy of interest: http://www.ourbrothershome.org/

Real Estate Investors Compete Against First-Time Homebuyers.

2011-06-05T22:16:00.000-07:00

With regards to this recent blog about investors competing against would-be homebuyers, it has definitely been my experience that this is taking place - in a large percentage of the offers I have seen recenty, especially in the low price ranges. One sure sign: in about 30 to 50% of the cases, the winning offer was all cash.

This is absolutely prevalent where a condominium is offered for sale, and more than 15% of the units in the complex are deficient in their dues payments to the association. In that case, I do not know of a bank that will lend money to buy the property. Only a cash buyer can puchase. Why buy in such a complex, with a fair risk that for lack of funds there will be deferred maintenance all around? Because the rental income is worth it. And later on, when the real estate market improves, valuations will bring in more gains. It is clear to me that many (real estate) investors have confidence in the Valley.

But I have also seen it in regular sales, where the dues problem does not exist. With prices very low now in the Valley, investors have been moving in; this has been taking place for at least a year in my experience, - and a little more for houses. Lowest prices were mid-2009.

Francis

Silicon Valley real estate

Sunnyvale prices, since 2006....

2011-06-01T13:21:00.000-07:00

Following up on a few of my last blogs on the surrounding Cities, what happened in Sunnyvale in the past 3 or 4 years?

A picture is worth a thousand words. Here is the graph of average prices since 2006, both for houses, and for the group "townhouses and condominiums".

Click to see larger

In Sunnyvale it turns out that values as an average are still down about 11% from 2006 for houses, and about -15% for class 2 - condominiums.

These are averages, for the whole town of Sunnyvale, and a study of specific neighborhoods to see how they fared through the crisis is called for: not all areas went up or down in the same manner. I am thinking that the areas that have good schools probably did better, as is usual in other Cities.

As far as the price per square foot, here is the evolution, for houses:

and for class 2:

The trend is pretty consistent with the average prices of the first graph - though these graphs are only from 2008 on.

For specific areas let me know and I will try to find meaningful graphs and figures.

Thanks for reading! --Francis

Silicon Valley real estate
Silicon Valley trends
Selected schools page

The real price of buying..

2011-05-19T15:06:00.000-07:00

The real price of buying is the cost of buying.
Will prices continue to fall? Should I buy now?

While price is always one of the major concerns when buying a property, cost and affordability should be at the forefront of your considerations as a buyer.

That means you have to take into account what your monthly payment will be, considering not only the price of the home but also the interest rate of your mortgage. Waiting for prices to bottom out while rates are increasing can wind up costing a lot more.

So the price of the property is, in a way, not the thing to focus on: if interest rates are low enough, the home that will make you happy could be a lot lower in price than you'd think. - I know, I know, no one wants to over pay for a property; but this is an other matter - and so "relative".

We cannot control what the market will be doing, but we can control how we address our housing expenses.

So I say, look at what is comfortable to own, without breaking the bank, and see if something fits the bill.

On the subject of interest rates: all lending and financing institutions, like Fannie Mae (FNMA – the Federal National Mortgage Association), Freddie Mac (Federal Home Loan Mortgage Corporation), the National Assocation of Realtors, PMI (Private Mortgage Insurance) and the Mortgage Bankers Association are all projecting rising interest rates over the next several quarters.

Although I have to say, personally, that I did not expect rates to stay so low so long. So who knows. If you have an opinion, chime in!

Francis

Silicon Valley real estate
Silicon Valley Smart graphs

Market trend in Mountain View - price/sq.ft

2011-05-13T16:58:00.000-07:00

Market trends - Mountain View:
Following some of my last blogs on average prices in Mountain View and Los Altos, someone asked me to show the evolution of $ price per square foot.

So, how is “Google’s” City doing in that respect?

As always with figures and statistics one has to take the information with a grain of salt, or a good dose of caution. The figures can be deceiving.
The price per square foot is a good measure of the activity, as part of a combination of measures. It is shown below for the market of condominiums and townhouses, for the past 3 years; it is showing a lower value as we go into 2011:

…and for the house market, it shows a very healthy trend:

But this is one element of a big picture. In this case it is good to remember that as a property is larger, the price per square foot is lower. So the figures may also partly reflect a difference in average size of the properties sold.

Curious about another City? Do let me know at francis@frolland.com

Silicon Valley real estate
Search the MLS

A link of interest: recycling event in Los Altos next week.

Los Altos prices: condos vs houses.

2011-05-06T09:08:00.000-07:00

In the category: condominiums vs houses, I was curious to see how Los Altos fared, in plain simple terms.

Does it vary a lot from one City to another? Not much: it turns out that it is fairly similar between Los Altos and Mountain View.
The following graph shows how condominiums and houses evolved in the past 5 years:

In Los Altos the condominium market started to be soft earlier than houses, and is a little slower to recover; - but overall is doing very well.

Los Altos townhall

From the average price in 2006 to the average price in 2010, condominiums lost 4.3% in value, while houses lost 5.3% . This is about the same as what the market did in Mountain View.

I think what is important to note is the general direction these figures point to, and the general idea that the peak was in 2007 - 2008, and the low 2009.

Again, it mirrors fairly closely what the County of Santa Clara experienced. --Are you curious about your area? Let me know I am curious too. I'll run the figures for you.
Francis
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Silicon Valley real estate

Silicon Valley and FHA loans..

2011-05-02T14:59:00.000-07:00

Home prices are pretty high in the Silicon Valley. Here, where sometimes wages are comfortable and disposable income or savings pretty low, it is good to remember that it is still possible to purchase a home with as little as 3.5% downpayment.

How is it possible? with an FHA loan, which is an (almost) normal loan, guaranteed by the Federal Housing Administration.

How does it work? Well it is fairly easy in fact - there are few limitations: the buyer does not have to be a first-time home buyer, there is no limitation of income for the buyer, and the property purchased can be pretty much any price. The loan amount is limited to about $730,000.

So I like to remind my clients of this option if they have little savings or family help for the downpayment, or if their salary is modest: they can still think in terms of homeownership while prices and interest rates are low. It is quite a good loan, with an attractive interest rate (at or slightly lower rate than a normal conventional loan). It is a little more expensive to get: there is a 1% upfront fee for the mortgage insurance and a fee of about 1% every year on the amount of the loan. Note: If it is used to purchase a condominium, the complex has to be FHA approved.

If you know someone who wants to take advantage of such a loan program let me know: I will share names of lenders who know FHA loans well. Time is also important: the loan limit will go down on October 1st to $625,500.

Thanks for reading, and sharing!
Francis Rolland
- Since 1985

Silicon Valley real estate
Search for homes in Los Altos

A link of interest: American Legion Santa Clara Post 419

Mountain View prices: condos vs houses

2011-04-25T23:12:00.000-07:00

To piggy back on my last blog, it is definitely interesting to research and compare how different areas within Mountain View (or any City for that matter) may have fared in the past 4 years, whether in the condominium market or the house market. But how did houses fare vs condominiums?

It turns out that they did about the same: from the average price in 2006 to the average price in 2010, condominiums lost 4.4% in value, while houses lost 3.4% - a close contest. The only thing one can see is that the condominium market went down faster than the house market in 2008 - in average figures... not in median figures.

It mirrors fairly closely what the County of Santa Clara experienced. Are you curious about your area? Let me know I am curious too.

Francis

Silicon Valley real estate

A link worthy of interest: Community Services Agency

How do you search for a home in Mountain View ?...

2011-04-21T15:01:00.000-07:00

How do you search for a home in Mountain View ?...

There are plenty of search engines that will help you search for a home online, (i.e. see at the end of this post), but the first step is often to know where in town you would like to be ideally. Most areas in Mountain View are associated with a name, and there is an app for that – I mean a map for that, in the “Neighborhoods” publication of the Mountain View Voice. It looks like this:

Just click on it to see it in more details.

MLS areas, used by real estate agents, function somewhat in the same manner, so that for instance it is easy to look for properties, say, on the North of Central expressway, or downtown, or in “Cuesta Park”… you can mix that with other criteria like: schools, age, size, etc… there are more than 300 criteria to search by in the MLS. So, when the time comes to really look for your dream house, it makes sense to work with a professional who knows his (MLS) tools and areas.

I love it when asked questions like “which area appreciates most” or “lost most value”. It is absolutely possible to check this out, but it just takes time, and you need to know exactly what type of property you are researching. Curious about a specific neighborhood? Let me know.

Thanks for reading.

MLS search in Mountain View, CA
Home statistics – Silicon Valley

A link worthy of interest: http://www.ourbrothershome.org/

Median prices: a perspective - California vs local. Mountain View

2011-04-15T13:29:00.000-07:00

Single family residences:

California median home price: February 2011: $271,320 (Source: C.A.R.)

California highest median home price by region/county February 2011: Marin $632,580 (Source: C.A.R.)

California lowest median home price by region/county February 2011: Merced $117,270 (Source: C.A.R.)

Santa Clara County median home price in March: $ 567,500,
Mountain View median home price in March:       $ 880,000
Los Altos median home price in March:                $ 1,595,500
Palo Alto median home price in March:                $ 1,564,000
(A lot) More Cities and details at:   Santa Clara County and San Mateo County

Thanks for your interest!
Francis

Silicon Valley real estate.
Search the MLS from the comfort of your home.

Santa Clara County real estate pulse... + notable fundraising event

2011-04-07T15:53:00.000-07:00

The average price for a house in the Silicon Valley (Santa Clara County to be more precise) went up a whopping 14% when compared with the month of February (to ~ $767K), and about 3.6% over what it was a year ago. (note: this is "average", not "median").

There is a graph, published every week in the San Jose Mercury News real estate section, that shows that about 34% of houses sell for more than list price in the County. How can it be, one wonders?

Some of it is, for instance, in what happened to one of my clients recently when placing an offer of an REO (= real estate owned; or in other words, a foreclosure): there were 7 offers, and of course the sales price is going to be higher than the asking price. We have a very enviable situation in our area, in that investors and homeowners alike see value in the Valley, and when prices are low enough, they buy. Also, there is quite a bit of money in the Valley. As a consequence, property values are quite sustained, and in the best areas the market is competitive - a sellers' market.

For single family homes - 3-month moving average.

Coming soon near you: Craft Faire: an exciting fundraising event for our veterans programs. The event will have about 40 crafters indoors and outside at the American Legion Hall, 958 Homestead Road, Santa Clara. The hall is located just a few blocks from El Camino and is near the corner of Lafayette & Homestead. The event will be held on April 9th from 9 a.m. to 4 p.m.

Thank you for reading!
Francis

Silicon Valley real estate.

A few "fast facts" - on local real estate

2011-03-22T17:45:00.000-07:00

The inventory of available homes in the area is a sure sign of where prices are going. Lack of inventory = trends up in prices for the most part.
For the County of Santa Clara, available homes and condominiums combined are as follows, as of March 21, 2011:
2008 = 6899 homes. 2009 = 5979. 2010 = 3467. 2011= 3501.
For the area comprised of Menlo Park, Palo Alto, Mountain View, Los Altos and Los Altos Hills, the figures are as follow:
2008 = 392 homes. 2009 = 685. 2010 = 483. 2011 = 369
This latter figure explains why, currently, about half of the homes offered in Palo Alto receive multiple offers and prices are going up as a consequence. What I experience is that the best products for sale right now are very much in demand, and based on the number of offers on some of these properties for sale, there are a lot of people in a position to buy "right now". On the other hand, those properties that are not particularly attractive for some reason or another can linger a long time on the market. Now more than ever quality & desirability rule.

On an other front, according to C.A.R.’s February sales and price report, the median price of an existing single family residence declined about 2.5 percent year over year (California Association of Realtors). Go figure...
Calif. median home price:
Calif. median home price: February 2011: $271,320 (Source: C.A.R.)
Calif. highest median home price by region/county February 2011: Marin $632,580 (Source: C.A.R.)
Calif. lowest median home price by region/county February 2011: Merced $117,270 (Source: C.A.R.)
- Mortgage rates: Week ending 3/10/2011 30-yr. fixed: 4.88 Fees/points: 0.7% 15-yr. fixed: 4.15% Fees/points: 0.7% 1-yr. adjustable: 3.21% Fees/points: 0.5% (Source: Freddie Mac)

Thank you for reading. Let me know if you need specific statistics on your neighborhood.
Francis Rolland
Dir: 650-947-2259

MLS search
Local trends and statistics
Silicon Valley real estate resource

Short sales in California: fewer than 3/5 close ...

2011-03-18T18:03:00.000-07:00

I find it difficult to explain to potential buyers the difficulties that short sale situations pose. A lot of the time, I give a copy of an article or two describing the problems involved. - and there are many, many different types of problems.

The California Association of Realtors (C.A.R.) released the results of a statewide survey on short sales and the challenges we as REALTORS® face in working with lenders and servicers.

The most vexing problem is the unresponsiveness of the parties involved in the banks, and the length of time it takes to get anything done. But let's not put all the blame in one place: it is true that the sheer quantity of files that one given person in a bank has to deal with is a challenge, whoever is there to do the work. But the differences between banks, departments, locations, makes it really difficult to have a standard approach. When a second or 3rd loan is involved, which is very often the case, then all bets are off...
“The lack of standardization, long approval process, and lack of lender approvals are hampering what should be a 45-day short sale process,” said C.A.R. President Beth L. Peerce. “Instead we’re hearing the typical response time for lenders is at least 60 days, and in many instances, their response time exceeds 6 months.”

Bottom line, these transactions are not for everyone. You have to be very patient and go with the flow. You cannot put your heart in the property you want to buy. You should not expect the succession of events to be logical, nor to make sense necessarily. And you have to know that it may not go through, even if you, on your end, have done all you could and should do: fewer than 3 in 5...
Francis
http://www.francisrolland.com/
Silicon Valley Realtor, - since 1985.

All cash buyers... a follow up...

2011-03-13T22:17:00.000-07:00

To piggy back on my previous post, the number of homes purchased with cash in California jumped to a record 30.9% in January, per DataQuick. According to the same source, 52% of the homes purchased with cash in Jaunary were being foreclosed on in the prior 18 months - which points to buyers-investors in large part.
Francis
Silicon Valley real estate.
Silicon Valley stats

Silicon Valley: all cash buyers.

2011-03-08T16:31:00.000-08:00

Confirming what the studies were showing at the end of 2010, figures came out (DataQuick information services) showing that 26.3% of homes were purchased with cash in Jan. 2011 in the County of Santa Clara, compared with 12.6% in Jan. of 2007.
In the County of San Mateo, it is roughly the same, at 25.4%
Prices adjusted so much that a lot of investors put their (cash) money where they believe the market will do well in the future.
In February 2011, the median house price is $530,000 in the County of Santa Clara, and higher in the County of San Mateo: $634,000. - there are as many houses that sold over this number as under.

Francis

Silicon Valley real estate
search the MLS directly
Smart statistics, locally.

Silicon Valley: Los Altos Hills real estate market

2011-02-20T12:03:00.000-08:00

Los Altos Hills ranks 4th on the list of the richest small towns nationwide according to Bloomberg Businessweek: Businessweek, which tallied the 50 most expensive small towns with populations of less than 10,000, indicate that Los Altos Hills notched a median home value of $2.16 million, a 13% decline since last year. The U.S. Census Bureau estimated that Los Altos Hills residents maintain a median income of $218,922.
Los Altos Hills is part of the Silicon Valley in California. It had 81 properties sold in 2010, 5 of which show reo's or short sales according to the MLS.
Thanks for reading,

Francis

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Relevant statistics in the Silicon Valley
Silicon Valley real estate

Current market in Los Altos (Silicon Valley) 2-11

2011-02-15T16:51:00.000-08:00

The number of homes over a million dollars dropped a bit in December 2010, but the median sale price of luxury properties inched higher, according to Coldwell Banker Residential Brokerage.
A total of 158 homes sold for more than $1 million in Santa Clara County in Dec., down 8.1 % from Dec. 09. However, the median sale price of million-dollar properties rose to $1.35 million, up 2.5 % from the previous month and 3.6 % from the year before.

Los Altos had the highest number of luxury sales in the county at 35, up from 30 a year ago, and the most expensive sale last month at $3.61 million.

Two other key market indicators were higher as well in December: the “days on average” of million-dollar properties (on the market until they were under contract) came down, and sellers received 97% of their asking price, up from 93 % last year.

Some other titbits from the Coldwell Banker luxury report:

- The most expensive sale in Santa Clara County in Dec. was in Los Altos for $3.6 million

- Los Altos boasted the most million-dollar sales with 35, then San Jose: 30, Palo Alto: 29, Los Gatos: 18, Cupertino: 16. – this is the Silicon Valley…
Francis
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Silicon Valley real estate

How is the market now, locally (around Palo Alto)?

2011-02-02T19:39:00.000-08:00

How does the activity compare with the previous years, in the 5 combined Cities of: Menlo Park, Los Altos, Palo Alto, Mountain View, & Los Altos Hills?

The inventory of all homes for sale stands at 330, with 181 homes over $1 million, and 78 over $2 million.
Exactly a year ago, there were 370 homes for sale, with 231 homes over $1 million, and 118 over $2million.
Exactly 2 years ago, there were 485 homes for sale, with 292 homes over $1 million, and 118 over $2 million.

Clearly there are fewer homes for sale, which traditionally fosters a rise in home prices.

Week-end open houses see a lot of traffic, with many pre-approved buyers ready to buy “right now”. There are also a lot of people who are just starting their search. (I would say about 50%).

The best properties (showing well and/or upgraded) sell with multiple offers, often with all cash offers. This indicates a lot of potential buyers who have been looking for a long while.

However, I also notice that buyers are very selective, and cautious.

Out of 109 properties for sale in Palo Alto, 50 are pending sale (in contract) with an average number of days on the market of 88 day, before entering in contract. This figure however includes 6 properties which have been on the market for over 200 days… (even one with 644 days on the market). One can say that the market is pretty active, but not unreasonable. It is also unforgiving...

Do you have any experience or input on the subject?

Thanks for reading,
Francis

Direct MLS search
Relevant statistics in the Silicon Valley
Smart real estate resources

Nationwide: home prices decline, rental prices increase in 2010

2011-01-24T15:50:00.000-08:00

A new study shows home prices declined 9.8 percent last year, while rental prices nationwide increased 11.6 percent during the same period, according to Hotpads.com. The rental price increase is a factor of uncertainty in the U.S. economic climate, which has forced a transition from a home-buying mentality to one more in favor of renting. The growing number of homes lost to foreclosure in 2010 expanded the number of people seeking to rent, creating a renter surplus, according to the study.
The impact on a State-by-State study gives us an idea of the impact on our local Silicon Valley real estate landscape.
With the U.S. unemployment rate at more than 9 percent throughout 2010, low-risk housing options became more desirable, a trend which may continue in the coming months, according to this Hotpads.com report.

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Useful school web sites, around Los Altos, Palo Alto, Mountain View etc...

2011-01-21T16:33:00.000-08:00

Questions always abound when it comes to schools around here in the Silicon Valley.
This is a collection of web links that, I have found, answers a lot of them:
- Silicon Valley schools.

This includes for instance an incredibly useful map of the boundaries for the various Los Altos schools. (It has ten layers of information!).
Of course, one should always call the school to double check attendance for a given year.

Thanks for reading. Francis

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Remodeling: national - and local - "Cost Vs Value Report"

2011-01-19T18:08:00.000-08:00

This most recent report compares construction costs with resale values for 35 midrange and upscale remodeling projects comprising additions, remodels and replacements in 80 markets across the country. Data are grouped in nine U.S. regions, following the divisions established by the U.S. Census Bureau.

The top interior projects for resale value included an attic bedroom and a basement remodel. Both add living space without extending the footprint of the house. An attic bedroom addition costs more than $51,000 and recoups an estimated 72.2 percent, nationally, upon resale; a basement remodel costs more than $64,000 and recoups an estimated 70 percent. Improvement projects that are expected to return the least are a midrange home office remodel, recouping an estimated 45.8 percent; a backup power generator, recouping 48.5 percent; and a sunroom addition, recouping 48.6 percent of costs.

Replacement projects usually outperform remodel and addition projects in resale value because they are among the least expensive and contribute to curb appeal.

For more information on the subject of remodeling and how much one can recoup, follow this page, which also allows you to download the report for your area of interest (most probably close to San Francisco).

http://www.realtor.org/press_room/news_releases/2010/12/home_owners_recoup

To read the full project descriptions, access national and regional project data, and download a free PDF containing data for any of the 80 cities covered by the report, visit http://www.costvsvalue.com/ . “Cost vs. Value” is a registered trademark of Hanley Wood, LLC.

Francis
Search the MLS now.
Local statistics, trends etc..
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Los Altos: Home Is Still a Good Investment.

2011-01-10T17:03:00.000-08:00

To keep in perspective: nationwide.

Even with several years of price declines, the typical seller who purchased a home eight years ago experienced a median equity gain of $33,000 - a 24% increase - while sellers who were in their homes for 11 to 15 years saw a median gain of 40%. That's according to the latest survey of home buyers and sellers conducted by the National Association of Realtors. (available at: www.realtor.org/research )

"85 % of recent home buyers see their home as a good investment, and nearly half think that investment is better than stocks", says Paul Bishop, NAR vice president of research. "This indicates the long-term view of home ownership as a fundamental goal and value remains sound."

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California real estate market – a few facts of interest…

2011-01-05T18:24:00.000-08:00

As I meet clients, I like to sometimes touch on a few little known facts of the real estate market in our state – which I have experienced myself first-hand in several cases in our local Cities of Mountain View, Los Altos and Palo Alto.
One of these facts is that buyers continue to face in many instances a competitive market, as evidenced by the following graph, showing that nearly half of properties sold attracted multiple offers:In 2010 the percentage is expected to still be over 50%.

Also, the number of all cash sales typically is around 8 to 10%, year after year. It is now around 20%. (a preference for real estate investment, over other types of investments, which may be perceived as too volatile?)
However, it is also true that the net cash to sellers has seen big changes:

This information is available from the California Association of Realtors, in a study that I will be glad to send you upon request.

Thank you for reading.
Francis

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Silicon Valley real estate resource.

Buy, or rent in the Valley?

2010-12-30T15:26:00.000-08:00

Nationwide an interesting study by Fannie Mae (link below) indicates that most Americans still aspire to be homeowners. More than half (51 percent) of current homeowners and renters say that the housing crisis has not affected their overall willingness to buy a home, according to the study. However, while homeownership aspirations are high for the long-term, Americans have near-term doubts about buying. For the shorter terms, 59 percent of renters said they would continue to rent in their next move, compared with 54 percent in January 2010.

In our area, the Silicon Valley, and more particularly around Palo Alto, Los Altos and Mountain View, but of course including Sunnyvale, Menlo Park and surrounding areas, the activity that I see at week-end open houses and what is reported in my weekly office meetings indicate that there is a strong demand for homes of all types. This area is doing a lot better than most due to the economic landscape and the high number of hiring companies. It is very common to see many, many visitors at the open houses that agents hold (even under heavy rain) and people are pre-approved and ready to buy the right property.

What I do see too is that the demand is more selective and there is pressure on prices.
The whole study on American homeownership aspirations.

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Condominium / Townhouse in the Silicon Valley – Any good?

2010-12-15T18:27:00.000-08:00

In the Silicon Valley where there is a limited amount of land to build on, a condominium or a townhouse is often a good alternative to a house. In general, for the same amount of money, one gets a larger and newer property in a PUD or CID (Planned unit development – Common interest development) than in a house. In our local towns (Los Altos, Palo Alto or Mountain View) a lot of the house value is in the land. Consider that an average piece of land ~ 6,500 sq.ft. would easily fetch in Mountain View between $400k and $500k, and this would not be in a prime location. Therefore, when one considers a purchase around $600k to $800k, a PUD is often more appealing to live in.
Some other reasons to prefer a PUD could be safety, or lower maintenance, as various parts of the property are maintained by the HOA (homeowners’ association). For people who travel or work a lot, with little time for yard or house maintenance, a condominium or townhouse can be a good option - also, it is less isolated than a house. Older people may also like the PUD arrangement: less involvement in the maintenance. The “maintenance” is where the “association dues” come into play: depending on the complex the monthly dues can cover some utilities, outside painting, roof, fences or decks, ground maintenance, some insurance, and various amenities included in the complex like: exercise room, pool, spa, kids’ play structure, etc…

It is easy to rate complexes depending on the amount of monthly dues. But it is not that simple. It depends a lot on:
1/ what they cover and
2/ the reserves of the association. More on this on the following condominium page because it would make a very long document on this blog...

Finally, what is the difference? In a condominium one owns only “from the paint on”. The walls belong to the association, and all own a percentage of the whole. In a true townhouse, one owns the land on which it sits, and the building itself. However, it must be noted that in the Bay Area a lot of PUD’s offer a mix of the two, and it is only by the legal definition (on the preliminary title report) that one can be sure of the nature of the unit. Many condominiums are “townhouse style” with two levels, no one above or under, and a 2-car garage.

Let me know if you have any specific questions!...
Thanks for reading! - Francis

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The Housing Trust of Santa Clara County Offers Help to First-time Home Buyers

2010-12-05T18:00:00.000-08:00

“We have money to help your first-time home buyers,” Dan Lachman, program manager of The Housing Trust of Santa Clara County told REALTORS®.
Lachman said The Housing Trust offers three main financial assistance programs for first-time home buyers - the Closing Cost Assistance Program (CCAP), the Mortgage Assistance Program (MAP) and Equity Share Co-Investment (ESCO).
Under the CCAP, The Housing Trust will provide up to $6,500 to help pay for closing costs and other transaction expenses associated with purchasing a first home. This program provides a deferred loan of 3 percent of the purchase price up to $15,000 for down payment and/or closing costs. The loan is not repaid until the house is sold or the owner refinances. No interest or principal payments are due during the term of the loan.

The MAP is a second mortgage of up to $35,000 available to first-time home buyers in Santa Clara County. The Housing Trust MAP loan is a conventional second mortgage, with interest and principal payments due monthly and compatible with most banks and credit unions. It is a 30-year amortizing loan with the interest rate at 1.5 percent above the rate of the first loan.
To qualify for the CCAP and MAP, the income of a single-member household cannot exceed $86,950, or household income for a four-member household cannot exceed $124,200.

Under the “equity share co-investment” or ESCO program, the Housing Trust will advance as much as $75,000 to first-time home buyers. The money will be used to match a buyer’s down payment. Payments on the ESCO loan will not be due until 15 years later or until the house is sold or the borrower refinances. The borrower repays the loan based on the appreciation of the home in equal proportions to the amount of the original down payments. To qualify for the program, the income of a single-member household cannot exceed $103,390, or the household income of a four-member household cannot exceed $147,700.
Lachman said since 2001, the Housing Trust has provided 2,100 down payment assistance loans. He urged REALTORS® to consider the loans for their clients. The Housing Trust considers a person who has not owned a home in Santa Clara County during the last three years a first-time home buyer.

For more details about PAL and other financial assistance programs offered by The Housing Trust of Santa Clara County, visit http://www.housingtrustscc.org/ .

These programs can help some people live much closer to where they work, in cases where they work in expensive areas (Los Altos, Palo Alto, Mountain View?). Among others, I am thinking about teachers, policemen, firefighters, clerks...

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2011 California housing market forecast – what does it mean for the Silicon Valley?

2010-12-01T13:32:00.000-08:00

The California Association of Realtors, in its “2011 California Housing Market Forecast” has projected a decline in California home sales for 2010, although home sales are expected to edge up slightly in 2011.

California home sales for 2010 are forecast to decline 10 percent from the 2009 sales figure of 546,500 homes sold. Sales in 2011 are projected to increase a lackluster 2 percent to 502,000 units compared with 492,000 units (projected) in 2010. After two consecutive years of record-setting price declines, the median home price in California will climb 11.5 percent in 2010 to $306,500 and increase another 2 percent in 2011 to $312,500, according to the forecast.

The real estate market has always been privileged in the Silicon Valley in comparison to the rest of the state. This tends to indicate a healthy market in the year to come in our area, and by our area I include Los Altos, Mountain View, Palo Alto and Menlo Park, and of course the Cities nearby.

Almost no one expects prices to rise as they have been doing “pre-crisis”, but based on the hiring done by local companies like Google, Apple and Facebook, to name a few, I would not bet on prices going down next year. What do you think?
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To keep in perspective: a nationwide point of view.

2010-11-17T17:27:00.000-08:00

Lawrence Yun is chief economist of the National Association of Realtors. I reproduce below a piece that he has written recently, which I associate with.
"Why Some Buyers Are Still Waiting."

Amid all the news coverage about how the housing market is still in the tank, there’s one piece of news that seems to have escaped most commentators: Housing is at its most affordable level in decades.

Because of record-low mortgage rates (~ 4.3% currently, +/-), the monthly mortgage payment for a median-priced home purchased with FHA-backed financing is $1,150, down from $1,658 in 2006, at the height of the boom.

Of course, like all things real estate, affordability is local. On a national basis, though, now is clearly a good time to buy for those who are willing to stay within their budget. But the extent to which households take advantage of today’s conditions is influenced by a number of factors.

The fist factor is the availability of credit

Second is market confidence. Although home values have largely stabilized in the past 18 months, some buyers believe prices are going to fall further. Unfortunately, as they hold off on purchases, their prophecy will become reality – inventories will grow and we’ll see downward pressure on prices.

The third factor is confidence in the overall economy. Slow economic growth leads to economic insecurity, even among those who have jobs.

Once consumers regain confidence and banks increase lending to sound individuals, buying activity should start to pick up. After July’s 27% drop in sales, the market has shown signs of healing; August existing-home sales were up almost 8%, and pending contracts suggest further gains.
It will take time before we can say the economy is back to normal, but in the meantime, high affordability and low mortgage rates will benefit those who are willing and able to purchase.

My graphical perspective on values, comparing National and more local values over 30 years:

For local information, in the Silicon Valley, don't hesitate to contact me.
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A tale of two Counties... Santa Clara Cty and San Mateo Cty

2010-11-10T13:44:00.000-08:00

Comparing the two Counties, for October 2010:

San Mateo County and Santa Clara County:
Av. price: ............................$ 974k ...............…… $816.3 K
Median: ...............................$ 675 K ..............…… $639 K
SP/LP ratio: ...........................98.2% ................……. 99%
Days on Market: ...................58 days .................…. 54 days
Days of inventory: ...............117 days ..............…. 103 days.
Pumpkin production total .... ;-) .......below:
..........................................2,723 tons .................... 1,399 tons

For complete information on a particular neighborhood or property, contact me.

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smart graphs...

Thanks for reading. Francis

Homes in Mountain View – with Los Altos Schools...?

2010-10-18T22:29:00.000-07:00

Many people ask for the best schools, and it often means higher prices. There are a few complexes which are less expensive than Los Altos proper, or Palo Alto, - in the more affordable Mountain View community. I have updated the information I keep on two of these complexes, as an example of what one can get for, for what kind of price:

The Old Mill complex, With both townhouse-style homes and condominiums, and current dues of $320 per month. Web tour and price history available at:
http://www.oldmillcomplex.com/

The Parc Crossings complex, with the 3 types of homes: single-family residences, townhouses (or “row-houses”), and condominiums (flats). Dues vary depending on the home. Web tour & price history available at:
http://www.theparccrossings.com/

These types of homes can also be attractive for rental purposes, until they are used later for personal use, even though of course in the Bay Area it is hard to have a good return on investment when renting a property. But they have enjoyed a good reputation over all these years. Price evolution over time is noted on these web sites.
Note: there is also a small area of Palo Alto which is served by Los Altos schools (South of the Adobe Creek, West of Alma).

For complete information on a particular neighborhood or property, contact me.
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Real estate market: good but slower...

2010-09-24T16:14:00.000-07:00

Home sales remained stagnant after tax credits expired.

The market has been much slower since the beginning of July. It is typically the case in a normal year (which is seldom the case in the Valley), but it has been brutal this year, as it probably was compounded with the end of the tax credits.

(the number of) Sales of existing single-family homes in California fell by more than 10% in July, from their June level, and hit the lowest level since June 2008 when sales were at 428,000. Although this was the first back-to-back double-digit monthly decrease since early 2007, monthly sales remained well above the cyclical trough of 254,650 sales that occurred in October 2007.

However, remember that the real estate market is a very local matter. No two areas, houses, are the same.
Indeed, in the County of Santa Clara for instance, prices are UP, year-over-year.

Prices for single-family, re-sale homes were up in August, year-over-year, for the eleventh month in a row. The median price rose 13.7%, while the average price was up 15.4%, reflecting a higher share of $1 million + home sales.

However, the number of sales of single-family, re-sale homes continued to slide and were lower than the year before for the third straight month: -13.1%.
Inventory was higher than last year for the second month in a row: 18.4%. This should translate into softer sales prices.
... A little known fact, showing that the market in this County is pretty good: the sales price to list price ratio for homes dropped below 100% for the first time since June 2009: 99.6%.
– many places envy the Silicon Valley situation…

The median price for condominiums was up 5.3% year-over-year. This is the tenth month in a row the median price has been higher than the year before. After nine straight months of year-over-year gains, the average prices for condos dropped 1.7%.

For complete information on a particular neighborhood or property, don't hesitate to contact me. And remember, real estate is not a short-term proposition. Timing the market is impossible.

Thank you for reading !
www.TrendsbyFrancis.com

Market Has Hit Bottom? hmmm.. yes.

2009-09-16T11:41:00.000-07:00

A very good indication of where the market is heading in a given area is the level of inventory of homes available at a given time, and compare this to the past.

In the County of Santa Clara, where we have been hit hard by the downturn in the past year or so, the inventory of available homes (SFR's and condo/townhouses combined) as of 9/11/09 stands at 3,315; a year ago at the same time, it was 6,844, and in 2007, it was 6,542.

This level of inventory has not been that low since January of 2007.I believe this sets the stage for a very healthy market.We have seen in the past months an impressive number of foreclosures being bought from investors and home buyers alike, often in multiple offers situations.

It is important to remember too that the percentage of houses which sold for more than the listing price, in the County of Santa Clara, has been consistently above 30% for the past year, and stands now at 40.6%. (Sunday real estate section in the SJ Merc.). Who would think based on the news articles in the papers?

For instant insight and smart graphs on the market, County-wide, and area by area within the Cities, go to:
www.TrendsByFrancis.com

If you like this article, share it! Thank you for your time.
Francis

Francis' Real Estate corner...: How is the market doing these days?... (2)...

2009-02-27T15:33:00.000-08:00

Francis' Real Estate corner...: How is the market doing these days?... (2)...

How is the market doing these days?... (2)...

2009-02-25T17:02:00.000-08:00

...or: another way to ask the question may be: “how are the mortgage rates these days?”

How much home you can afford is affected by mortgage interest rates. Where the interest rates are right now, for each additional percentage point, the payment on a $600k loan would be an additional $381 per month, which is roughly equivalent to a purchase amount of $64,000. Interest rates are at an historical low as shown below, and the consensus among the financial specialists is that it will not continue that way for ever. … The fear of inflation is real.

During the last downturn, a lot of people started to get in the market as soon as it was evident that interest rates were increasing. The same phenomenon might occur again, reducing the comfort and purchasing power for those waiting to “time the market”.

As written recently in an article in Realtytimes®, “the average homeowner is worth 35 times more than the average renter”.

Owning a home becomes part of your investment portfolio, provides tax benefits, allows you build equity (yes, it still exists), and … if you buy now, you may get an excellent deal. Of course, you need to consider how long you would be in the home. You need to plan on staying at least 3 to 5 years in a house. Although even if you have an unexpected move, a valid strategy is to keep the property and rent it out.

Finally, with the last changes from the administration, new home buyers will receive substantial subsidies, just to make the step to homeownership. Definitely something to consider… For more information on this subject, do not hesitate to contact me.

As always, I advise buyers to find the place they love, and buy it for many years to come in a safe, affordable way.

Francis C. Rolland

How is the market doing these days?

2009-01-21T15:33:00.000-08:00

.. The million dollar question...
The answer locally is very specific to the town, and within a town very specific to the area, and the price range. There is no immediate “cover-it-all” qualification. One thing for sure: the good schools are at an all-high premium.
Only a full-time agent can tell you ahead of the News how the market is faring, by feeling the pulse of the market. One way I “feel” the market is by sharing with my colleagues their open house experience. Right now, it is very positive, in that we see a lot of pre-approved buyers going to open houses in large numbers. The clientele is picky, looking for a bargain, but is there to buy.
Based on that, I do not think the market is going to “crash” like some news articles report. Prices will continue to adjust quickly as they always do in the Valley, but I would not try to “time” the market: what counts is to buy a house you love, at a price you know you can afford comfortably.
Francis C. ROLLAND
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Invest in the Bay Area?

2008-09-26T18:33:00.000-07:00

Some of my clients have been interested over the years in placing some money in a modest investment, in the Bay Area. The reasons may vary, but often it is to use the property later for themselves, or for their kids, and to benefit from the good appreciation that we enjoy here - or the good value that it holds over time.

A rule of thumb in the world of real estate is that whereever there is appreciation, the return on investment (ROI) is pretty small, and where the ROI is good, appreciation is much less.

In the Bay Area, I have often counselled my clients to look into areas moderately priced, but with excellent schools. I submit as examples the following two complexes in Mountain View (which as a City is a good middle ground between the very expensive and the cheapest areas of the Bay):

- The Old Mill Complex: http://www.oldmillcomplex.com/

- the Parc Crossings: http://www.theparccrossings.com/

These links, besides giving a history of prices in the complexes, also give detailed resources as to the schools.

I hope you find this of interest.

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