College Debt is Postponing Homeownership

This is not new news, and I already wrote about this earlier on this blog, but it is worth noting it again: college debt is a factor in postponing homeownership and a lot of other life decisions.

I just read this article from RISMedia, written by Suzanne De Vita (online news editor) which reiterates with fresh figures this pressing problem facing our youngest generation.  The National Association of Realtors is actively supporting efforts to find solutions and educate students as they take on new debt.  See the following NAR report on student debt.  As a result a majority of millenials are postponing several significant aspects of their life, such as marriage, starting a family, or starting any retirement savings.

Do you think getting a loan for your education should be more expensive than getting a loan for a car or a house?

Thank you for reading,
Francis

Trends: Local prices and graphs.
Check your Home Value
A worthy local non-profit to remember: Community Services Agency in Mountain View

Bay Area Real Estate Continues to Demand Top-Dollar

Market Watch | Bay Area Real Estate Continues to Demand Top-Dollar

November 13, 2017    Coldwell Banker  Market News  by Marketing Department

In September, the Bay Area maintained its position as California’s most in-demand region for real estate. According to the September California Association of REALTORS^® report, six of nine Bay Area counties had less than three months’ supply of inventory, and of the six – two had less than a two months’ supply. The report indicated that San Mateo took the No. 1 spot with the highest price per square foot at $883/sq. ft., followed by San Francisco ($875/sq. ft.), and Santa Clara ($687/sq. ft.). Read more about what’s happening from our Silicon Valley offices.

SF Peninsula – Half Moon Bay reported an all-time low in inventory supply. Although this makes the housing market tough for prospective buyers, many were still encouraged by low interest rates. Palo Alto downtown also saw low inventory that led to multiple offers on most, if not all properties.
Redwood City experienced a healthy demand and saw many sales exceeding asking prices. One instance was an uninhabitable house in southern San Francisco that listed for $550,000 and received 29 offers, selling well above the listing price. The luxury market remained active, although properties did not move as quickly.
San Mateo saw an increase in both inventory and prices. The luxury market was active, but slower with properties priced above $2.5 million. 

Silicon Valley 
Cupertino saw an active market, at times with more pending sales than active listings.  Buyers are encouraged to start house hunting as Silicon Valley is a uniquely strong region with exceptional demand. The luxury market remains active with several sales exceeding $6 million.
Gilroy and Morgan Hill saw low inventory and over 65 percent of the 54 available homes sold for over $1 million. Entry-level homes can be challenging to find, although the average list price of Gilroy is slightly lower. Overall, the area remains a sellers’ market with multiple offers and homes selling for above asking.
Los Altos experienced a continued sellers’ market with low inventory and multiple offers on most listings. The average days-on-market remained low, ranging from 13 days in Sunnyvale to 35 in Los Altos Hills. Sellers need to ensure their homes are priced and primed for a competitive sale. And buyers must be prepared with financing and a knowledgeable, trusted agent to represent their best interests. Buyers must also be aggressive as the market is highly competitive and sellers are more responsive to solid offers. The luxury market priced above
$4.5 million in Los Altos is steady and flat. On average, time on market is 44 days. Inventory is steadily increasing and the number of sales in the high-end market is down slightly.
Los Gatos saw a sustained sellers’ market, and luxury activity remains strong and active.
San Jose saw inventory at a record low. That coupled with low interest rates has created an increasingly competitive market for buyers. Even with the strong demand, sellers are encouraged to price their home competitively – at or slightly below market price – to avoid pushback from buyers. Because of the current competitive landscape, buyers should be ready to make an offer quickly because hesitation may cost them a great opportunity.
Saratoga saw multiple offers on most of its listings and a continued sellers’ market.  Buyers who are ready to make a move should have all financing in order. The high-end luxury market experienced an increase in listings with 24 properties for sale in September, a 9.1 percent increase from August 2017, and a 71.4 percent increase from September 2016.

Any questions about your real estate situation? Let me know!
Thanks for reading!

Francis Rolland

Your Home Value?

Trends: Local prices and graphs.

Real Estate Ownership: how to hold title to your real estate

The question of how to hold title to your property comes up every time as you get ready to finalize the process of buying a home, "sign off", and tell the escrow/title company how to register that new home that you purchase.
This is not something that a Realtor can advise you on (nor the escrow officer BTW), because it is definitely a legal matter, and it does also have tax implications.  The various ways to hold title can be in good part summarized as indicated below:

-  Sole ownership –In this scenario, property is owned entirely by one person, who can do whatever he or she wishes with it without permission from another party. If the sole owner dies without a will, the property passes according to the state law where it is located. In some cases, the court that has jurisdiction will appoint an executor to oversee disposition of the estate.
-  Joint tenancy – As joint tenants, each person who has a share of ownership owns an equal share of the property. If one owner dies, that share passes automatically to the remaining owner(s).
-  Tenants in Common – In this case, a property is owned by two or more people at the same time, but the proportionate interests and right to possess and enjoy the property need not be equal. The owners can sell their share of the property if they wish and, upon death, the decedent’s interest passes to his/her heirs who then become new tenants in common with the surviving owners. (None of the tenants in common automatically receive, by default, the share of the decedent.)
-  Community Property – In the nine states that recognize community property, including California, any property you acquire while married is considered community property, and is equally owned between you and your spouse. This becomes especially relevant in the event of divorce.

-  Community Property with Right of Survivorship - this (more recent) method is very often used nowadays around here in California, as it combines some of the advantages of owning from both Joint Tenancy and Community Property.
-  and there are many other ways of holding title, among others in an LLC, or an LLP, or also, very common around our areas where properties are so high in value, in a Trust.

This is why it you are not certain how you want to hold title to your real estate asset, it is best to inquire ahead of time, ideally with a licensed California real estate attorney. 

I have found that even people who've owned a property for a long time should revisit this important matter, as needs and life situations change over time.
Contact me if you need some resources, and do not just base your decision on the information above ;-)

As always, thank you for reading!

Francis

Your Home Value?

Trends: Local prices and graphs.
A worthy local non-profit to remember: Community Services Agency in Mountain View
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Local Market Update - Silicon Valley Real Estate

Market Watch

Low Inventory Still Impacting Northern California

September 11, 2017

Sparse housing inventory continues to affect the Northern California market. The California Association of Realtors’ latest report indicates that the San Francisco Bay Area endured a large drop in pending sales due to the lack of available housing. In fact, it dipped 11.5 percent since last July. The report also indicates that San Francisco and San Mateo counties were both down double-digits, 11.0 percent and 21.4 percent, respectively. For homeowners on the fence about selling, the lack of inventory makes it a great time to list because many patient home buyers are prepared to come in with solid offers. Read more about what’s happening, coming directly from our Northern California Coldwell Banker offices:

From the trenches...:

SF Peninsula – Half Moon Bay’s market remained competitive. The luxury market continued with strong demand. Average days on the market was just 17, with a median sales price of $2 million.
Menlo Park experienced a fast-paced market with no slowing. Sellers were encouraged to list their homes instead of trying to time the market or wait for a more optimal time.
Redwood City had a lack of inventory. Homes priced under $1 million brought in multiple offers. In the $1 million-plus market, homes sat on the market longer before closing.

Santa Cruz County- Offices in Santa Cruz saw a strong month. Average sales prices have been increasing steadily for the last five years by $30,000 to $90,000. This year is no different, with the average sales price of $950,000 and an average list price of $1,050,000. Buyers have been more aggressive in their offers. The luxury market in Santa Cruz peaked in comparison to the last few months with an average of just 50 days on the market (instead of 54 days), and experienced significantly more sales above the $1 million mark over past months.

Silicon Valley – Cupertino continues to experience a lack of inventory. However, the luxury market is still active up to $4 million. Low inventory was also a key factor in Los Gatos’ market, creating a similar dynamic as in Cupertino.
Gilroy and Morgan Hill also endured a lack of inventory causing multiple offers and high closing prices. Even in those markets favoring the supply-side, sellers should be prepared to choose quickly when presented with multiple offers. To submit a winning offer, buyers must put their highest offers first and make the transaction easier for the sellers.
San Jose remained active even with declining inventory. Because of the decreased supply, prices have slightly increased. Sellers can take advantage of the high demand. Buyers should think long term and be prepared to make a strong offer. Factors such as multiple offers or slightly higher asking prices should not deter them from putting in offers.
Saratoga’s market saw an increase of 21 percent in the average sales price year-over-year. The luxury market remained active with five listings and four sales.

My personal current market report allows you to check in for your own City, and area within your City.

Thank you for reading,
Francis

Your Home Value?

Trends: Local prices and graphs.
A worthy local non-profit to remember: Community Services Agency in Mountain View

Home purchases by foreigners in the US

What is the profile of the international home purchase activity in the US?

About a year ago I mentioned some of the characteristics of the types of properties foreign buyers were buying, depending on where they are from.  This blog here is more general in nature and shows how much, globally, each country participated in the buying binge in the US.

An image is worth 1000 words...  the National Association of Realtors put out a study and infographic that says it all, entitled:  Where are most international buyers from?
Please check out the NAR's  2016 International Profile.

.. which translates in the following figures:

Thank you for reading,
Francis

Silicon Valley real estate specialist
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Seasonality of real estate sales prices - Silicon Valley

To piggy-back on one of my earlier blogs on the evolution of prices in the Silicon Valley, here is an updated graph showing the median price of a residential piece of property in the County of Santa Clara, between a bit before Jan 1, 2015, and right now: July of 2017.





















Click on the graph to see it larger.

The green arrows point to a seasonal low in Aug./ September (corresponding to August sales) and a movement downwards in january, which corresponds to sales in November and December.
As mentioned in my previous blog, it does not mean necessarily that the same property will sell for less in December than in January, but it does mean that more properties of a lower value sold in November / December than in January.  One can see that in February the median price starts going higher (these are the January sales).

Will the same property sell for less during those times?  It is open to question, but my experience is that a prime piece of real estate, with good location, very good condition etc... will sell for about the same price.  By experience, if a property is not top notch, it may suffer somewhat from the timing.   Otherwise, these ups and downs relate to the fact that:
- many people are away during the months of July and August,
- many people wait for right after Labor Day to put a property on the market (feeling that fewer people will be in the market to buy a home, because away on vacation),
- fewer people are looking to buy in November and December because of the holidays and the weather.
- statistically, more homes go on the market during those slower times because they have to.  This can  also explain why the sales price is lower.

Thank you for reading!
Francis

Trends: Local prices and graphs.
Check your Home Value
A worthy local non-profit to remember: Community Services Agency in Mountain View

Perspective on the Real Estate Market - Silicon Valley - USA

A perspective on the real estate market in the US, and in the Silicon Valley - the Bay Area of San Francisco.

As I update this amazing graph every year around the month of April - May, I cannot stop being amazed at the evolution of prices in our corner of the world.
This graph makes me think somewhat about the technical progress of the past 3 decades  - also unique to our generation.  Although obviously it is not in direct correlation to scientific discoveries, since it is a reflection of other factors like supply and demand, economic upticks and downturns and geographic particularities, the graph is as extreme in its own way, and covers a time frame that is the same.

Click to see a larger graph.

What happens after the end of 2016?  For now the market is still a strong sellers' market in most of the US regions. 
Nationwide the median home value is now higher than right before the "Big Crisis", at $198,000, according to the April Zillow® Real Estate Market Reports (Svenja Gudell article).
However, let's not forget that this is not true of all of the US: in 17 of the 32 largest metropolitan housing markets prices are still below-peak (like in Las Vegas, Phoenix, Miami).

Here in the Silicon Valley the market remains very much a seller's market. At this point, I believe the annual appreciation will be easily around 6-8%.  The areas with the lowest average prices may even show a higher rate of appreciation.  Multiple offers are the norm, and cash is king...

Thank you for reading,
Francis

Trends: Local prices and graphs.
Check your Home Value
A worthy local non-profit to remember: Community Services Agency in Mountain View

8 facts about Mountain View, Google's hometown

Mountain View is the hometown of Google.  Have you ever been curious about the town that hosts Google?

Here are 8 facts about Mountain View that you've always been curious about, but never asked - ok, may be you checked before... ;-)

 In 2016:

• 573 homes sold - houses, townhouses and condominiums,
• Mountain View’s average home sales price is:  $ 1.384 million, roughly 6% over the asking price, and 4.3% over the average sales price of 2015,
• The average time for properties to sell was: 19 days
• Out of those 573 homes, 42% were single family residences.  The others were condominiums or townhouses,
• Overwhelmingly, properties sold in Mountain View were 3 bedroom homes (41%).  Then in order came the 2 bedrooms (29%) and the 4 bedrooms (18%).
• Nearly half of the homes were between 40 and 70 years old (45%).   (13 were over 80 years old, 37 were new or 1 yr old),
• The average size of all these sold Mountain View homes is 1493 sq.ft.
• Half of all the households of Mountain View made over $103k/year and half made under that.

Curious about more info on Google's town?  Check out my full neighborhood report.

Curious about your town, in the Silicon Valley? curious about the value of your home?  Let me know, I'll do the study.

Thanks for reading!

Francis

Your Mountain View Home Value

Trends: Local prices and graphs.
A worthy local non-profit to remember: Community Services Agency in Mountain View
Card Drawing by Francis

Silicon Valley market update - California/US Update

Here are some news from the trenches...  concrete information about what is happening in our local area of the Silicon Valley - Plus, for some perspective, some information about the hottest markets in the US. (which include San Francisco and San Jose in the first two...).

Silicon Valley – More listings are emerging in the region, but Santa Clara County is still facing a shortage of available homes and strong buyer demand, which in some cases is leading to bidding wars. Open houses drew “hundreds of visitors” in the last two weeks, reports the Cupertino office manager. All offers ratified over the past two weeks have been multiple offers and all deals have contingencies in place, according to the San Jose Almaden office manager. Prices were up in several communities in January compared to the same month in 2016, he noted. Almaden’s average sales price was $1,329,000 in January, which was up 12 percent from January 2016 and down 3 percent from December.  Blossom Valley’s average sales price followed a similar trend. The average sales price in that community was $708,000 in January, which is up 10.5 percent from January 2016 and down 9 percent from the prior month.  In contrast, Cambrian’s average sales price declined 10.5 percent from a year ago to $916,000 and was down 6 percent from December.  Santa Teresa’s average sales price rose 11 percent year-over-year to $759,000 in January and was also 2 percent higher than the average sales price recorded in December. Most homes are going into contract after just one weekend on the market and in some areas homes are selling well over 10 percent of asking list price, says the San Jose Willow Glen office manager. Despite the strong demand and brisk activity, “Sellers still need to be careful not to overprice as we see homes that are priced above market sit idle as more competitively priced homes are seeing all the action,” explained the San Jose Main office manager.


For the hottest real estate markets in the US (many of them in California), please follow this Coldwell Banker article.

Thank you for reading!
Francis

Silicon Valley real estate specialist
Detailed, local trends etc...
Current mortgage rates
A place worth noting: Our Brother's Home in MountainView

Where can you find that home style?

Where can you find that style?

Great article I found recently about the various building styles in the US, and in which area/state you are more likely to find them. 

The following map speaks quite well about the locations and the styles, but I find the article itself most interesting to read as it goes into the reasons why a style is more prevalent in a given state, and the usual value of the houses.

It comes to no surprise that the Mediterranean style is the most expensive, - it is often the case here too in the Silicon Valley, although I would add to this article that the “contemporary” home and the “modern” home are likely to be the most expensive where we are, as they are often associated with “new”, "recently build" and “high tech” or “smart home”.  This includes energy efficient.  Only the Eichlers might fit in that category of “contemporary” while not being necessarily new.

From an article in Realtor.com author by YuqingPan.

Thank you, as always, for reading, and let me know if you are thinking of buying or selling in 2017! ;-)

Francis

Buying or selling?

Silicon Valley real estate

Worthwhile non-profit Agency:  CSA in Mountain View

Santa Clara County: Price evolution.

'tis the time of year: how did sales prices fare in the County of Santa Clara (Silicon Valley) for the past 2 years?  This blog looks at the price of houses only: Single Family Residences.

Looking at the graph below, one can see the curves of median prices and average prices, month by month.  They are similar, but not equal though:
- over the period of the last two years, the median price went up 18%, from a median of $813k in Jan. 2015 to a median of $963k in Dec. of 2016.
- this is a much higher appreciation than the average price, which went up only 6% from $1.13 million in Jan. 2015 to $1.2 million the month of Dec. 2016.

As a reminder, this median price means that half of all buyers bought a house over $963k, and half bought a house under that price.

Something apparent in this kind of graph (which I publish regularly over the years) is the evolution over the course of the year: prices go up as a whole in general during the first 6 months of the year, and have a tendency to go down from there until the end of the year - with the exception of Sept. and October, when there is a regain in activity.

This is difficult to interpret completely: it does not mean necessarily that the value of a specific house will go down at that time, nor that it is not a good time to sell in November or December.  What it does mean instead is that statistically, more houses of a lower value sell during those periods, and this could be because of many reasons.
One of them, for instance, could be that people in a higher price range can wait for a "better" time to sell: the traditionally "active" real estate season of January to June.  It could be that more people "have" to sell at the end of the year;  more pressure means less room for negotiation.
What is also true though is that a beautiful remodeled home in a desirable neighborhood will probably not loose any value even at the end of the year, at least in our area of the US.

Finally, as a reminder that we always have to take graphs and statistics with a grain of salt, the same figures translate into the following:

Average prices for 2015:  $1.246 million
                         for 2016:  $1.292 million.  This is an increase of 3.7%

Median price for 2015:  $950k
                      for 2016: $1.02 million.  This is an increase of 7.4%

This is a better representation of the market as we follow the market over the years:  from year to year, instead of from a given month to another given month.

To make sense of the evolution of prices in your own local area, or to price your home, do contact me.
Thank you for reading,
Francis


PS: Detailed info per County always available on my web site at:  www.frolland.com under the tab: "Local Info and Stats".

Santa Clara County 2016 yearly report.
San Mateo County 2016 yearly report.

Effect of current tax structure on local Bay Area real estate market.

' just read a really good article in the Chronicle about how the current tax structure is hindering home sales in the Bay Area (San Francisco), and bringing prices up.

When you sell a property that has been a principal residence for many years, you usually have a large capital gain, and the tax that comes with it. In a very common scenario, there is a capital gains tax exemption of $500k if you are a married couple, or $250k if you are single.  The problem arises when you have bought your home a very, very long time ago: the purchase price is so low that when compared to the sales price today, and after factoring in the costs and capital improvements ( - thanks to CPA's for helping with all these calculations 😊  ), the capital gain is so high that the tax due on it is a big deal.

Some would say that this is a good problem to have.  But in fact, many people do not want to have such a tax hit, or some people just cannot pay the tax (i.e. if you have borrowed a lot on your equity, you don't have much left when you sell).

This situation is so acute in the Bay Area (think: large appreciation) that it has contributed to the lack of inventory we've seen in the past few years, and this in turn is pushing prices up.

While there are several options to try to deal with the problem, none of them is so easy or straightforward - except for dying, which I will pass on - no pun intended...  So homeowners who find themselves in that situation often just delay the sale until later, and later... and there are fewer homes on the market.

The article was written by Kathleen Pender, Business Columnist at the SF Chronicle.
Check here to see the article and the interactive map showing where the capital gains are most prevalent, in the 9 Counties that make our "Bay Area".

Thank you for reading,
Francis

Silicon Valley Real Estate
Smart local Stats and Graphs 
non-profit organization worth noting: Partners for New Generations.

Bay Area rents are coming down a bit...

In the process of helping clients to rent their income property, I had noticed since last March/April that prices were not as strong a before, and recently had even been going down a bit.  But this is difficult to verify, since there are so few rentals locally in a given month.

I am glad to see some confirmation of that in this article from the Mercury News that I just read last Tuesday (10/25/16), in which Richard Scheinin pools several sources showing that rents have stopped going up in several cities around the Bay, and even come down a bit since last year.

It is interesting to note the Axiometrics study which found that rents in San Jose fell 3.4% since last year, San Francisco rents fell about 3.3% too, while nationwide rents overall continued a slight up curve.
Thank you for reading! - and if you like my blog, share it ;-)
Francis

Silicon Valley real estate specialist
Detailed, local trends etc...
Current mortgage rates
A worthy local non-profit to remember: Community Services Agency in Mountain View

From the trenches: real estate in the Silicon Valley - 2nd week of October 2016

Market Watch - Coldwell Banker.

...Silicon Valley 

– It has been a relatively quiet two weeks, according to our Cupertino manager. Open house traffic is steady.

Our Los Altos manager sees continued signs of seasonal adjustments although inventory is low as summer comes to a close and we move into fall.  New inventory has slowed of late.  This lack of inventory has had a direct impact on those homes which had been "lingering" on the market and agents have seen additional price reductions on homes with higher than average DOMs (days on market).  Sellers are still wishing to “test the market” by bringing their homes on at higher prices than previous sales and pendings.  However, this pricing strategy has proved to be risky, given that many buyers' expectations are that they will still need to offer over the asking.  As a result of this type of pricing strategy agents are seeing a “self-fulfilling prophecy” with these homes having little to no activity. These homes end up stagnant and linger on the market, eventually having to lower their price to generate activity. To the contrary, there has been strong activity with properties in move in condition and priced to sell.  These homes are still receiving multiple offers that typically achieve a sales price that is over asking.  This was the case with one of our recent listings, which had 24 offers.  In short, we have experienced a slowdown of homes coming on the market over the recent weeks.  And those that are coming on, when priced to induce offers, are being absorbed quickly.

The Los Gatos market under $2.5 million continues to be extremely competitive.  The market over $2.5 million is a tad slower but great properties over $2.5 continue to sell. 

The San Jose Almaden market had an average number of sales for the month with 40, which is down from 44 in August and flat with the 39 sold in 2015.  Prices were up with the median sales price at $1,320,000 for the month, up 7.8% from the previous month and 3.5% higher than the previous year.  Blossom Valley had a strong month in units sold with 94 closings, up from 88 last month and 86 last year.  The median home price of $751,250, up 4% from last month and last year at this time.  

Cambrian had a big jump from last month with 86 closings, 20 more than August and 4 more than 2015.  The median sales price was $937,500, up 3.9% from last month but down 1% from September of 2015.  

Santa Teresa had a lower number of units sold at 27, down 6 from last month and down 13 units from September of 2015.  The median sales price of $750,000, down 4.5% from last month but up a whopping 11% from September of last year. 

Willow Glen got a surge of new listing inventory this past week, going from the low 60’s count to 83 active listings. Agents are reporting slower traffic at open houses, particularly if the property has been on the market more than 2 weeks. However, some properties are still selling quickly with multiple offers, but typically the offers are at or just slightly above the list price.

Thanks for reading! 
Francis


Silicon Valley real estate specialist
Detailed, local trends etc...
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Coming soon: Shredding and E-waste day, organized by
Coldwell Banker in Los Altos Oct.29, 2016
Please contact me for more details.              

Housing Differences and the Election - Red States vs Blue States.

Red States vs Blue States: Housing Differences and the Election.

It seems apropos in this pre-election period to look at some of the differences between blue and red states, with regards to housing.  Here we go:

The median household income in blue states is $62,564, about 23% higher than in red states, where it is $50,820.  In those blue states, 1.4% of households bring home $500k or more (think: tech

fortunes in California’s Silicon Valley, and seven-figure bonuses on New york’s Wall street).  These 1.4% seem small, but it is 133% more than the percentage of households that bring in $500k or more in right-leaning states.

The median price of homes is $301k in blue states, which is 91% more than in red states.

Ohio has the least expensive homes (although it is a swing state).

Homeownership is highest in red states, where it costs less to have a home.  However, (- exception), the city with the highest homeownership rate is San Jose (CA) even though the median list price of homes is $767k, according to Realtor.com.  Washington DC has the lowest homeownership rate.  In red states, people spend 26% of their median household income to buy a place, while it takes 32% of a household’s income to buy a place in a blue state.

Renting takes an average of $1,381 a month in blue states.  This is  52% more than in red states where it costs an average of $904 per month.  “The cost of housing is directly tied to how much land is available”, Realtor.com’s Chief Economist Jonathan Smoke says.  “The parts of the country that have an abundance of land have the lowest housing costs”.

Click on Pix to see larger

The median size of houses in red states is about 2,000 sq.ft.  – about 210 square feet larger than in blue states. 

Oldest houses: in blue states. Many of the blue state cities are older than their red counterparts.

Mobile homes: the highest concentration of mobile and manufactured homes are based in the red state of Mississippi.  The city with the lowest percentage of these homes is San Francisco.

Solar panels:  liberal states tend to have more eco-friendly residents, who are 12% more likely to

have solar panels installed on the roof of their homes.  The most panels (in number) were installed in California, while Hawaii has the highest percentage of residences with the solar power source.  San Jose (CA) is the city with the highest percentage of homes with solar panels.  The fewest panels are in the (red) state of Wyoming. Memphis, Tennessee, was the city with the smallest percentage of residents invested in them.
Thank you for reading!

Francis

Originally posted on Realtor.com, by Clare Trapasso.

Silicon Valley real estate specialist
Detailed, local trends etc...
Current mortgage rates

Coming soon: Shredding and E-waste day, organized by
Coldwell Banker in Los Altos Oct.29, 2016  
Please contact me for more details.                

Need to sell to move up or move down?

Need to sell your home to move up or down?

This is the typical conundrum that we face in our market: there are fewer homes on the market because, while it can be “easy” to sell your place in this market, it is not so easy to buy your replacement property.  This is why many people have postponed their real estate plans.

There are a few ways around this, all requiring to be well prepared:

-       Arrange for temporary housing, with the help of your friends or family: a short-term solution sometimes can be found if you turn to relatives or friends who may have a second home, a vacant rental unit, or even room in their house.  This is not ideal but could enable you to sell your house first, and have less pressure to find the replacement home.

-       Place a contingent offer: “subject to the sale of your property within ..xx days”.  This refers to a condition in your offer to purchase, with the condition that you will be “in contract” on the house that you have to sell within so many days.  There is quite a bit of preparation to be able to achieve that: you need to be ready to go, on the starting blocks, for the sale of your house - before you place an offer on another house.  That means all inspections done, all repairs done (if any), and the whole marketing file ready to go.  Usually, once your offer has been accepted, and if it is well negotiated, you have a few days before the other party can cancel on you, so that you do not find yourself having sold your home, and with no place to go.

-       Sell first, and arrange for a rent-back.  This means that you take an offer subject to you being able to stay in your home for a given time, renting it from your buyers, to enable you to find a replacement home and buy it.  If your buyers are buying with a new loan, the rent-back will most likely be limited to a maximum of 2 months.  If they buy all cash, then this limit disappears.  This gives you an additional chance that you will not have to move twice.

-       Arrange for a “bridge loan”.  This solution, in the most recent version, will let you borrow up to 70% of the value of both homes at a high interest rate for a few months, as long as you qualify for the final (purchase) loan.  The goal will be to purchase, then sell as soon as possible, and refinance the bridge loan into a "normal" loan.  An alternative is to get a line of credit on the 1st house and use the cash for a larger down payment on the second house, but in that case your lender will need to see you qualify for both loans + the line of credit.  You avoid that with that new "bridge loan".  It can be expensive, but if it is only for 2 to 3 months and it does enable you to move, it can be worth it.  Call me for further information.

Unfortunately, there is still currently no real bridge loan, as they existed a decade ago (see my previous blog from 2013:  "But, where did the old bridge loans go??").  But it is nonetheless possible, with good preparation, to “sell and buy”.  It is made a little easier lately by the fact that the local market is slowing down: fewer multiple offers, and more properties languishing on the market.  The inventory is going up nearly everywhere, and some sellers are more willing to accept a “contingent” offer, if it is otherwise a good offer.

For this to happen, it is also important to be aware of whether it is easier to sell a home or to buy one in the exact locations you are considering: the location you leave, and the location you want to buy in.  Your Realtor, a local specialist, is essential to help you with the research.

Thank you for reading - Let me know if I can help you with your real estate plans.

Francis

Silicon Valley real estate specialist

Detailed, local trends etc...

Current mortgage rates

A worthy local non-profit to remember: Community Services Agency in Mountain View.  Meeting you there next week to serve food? On Tuesday afternoon.

First-time home buyers

First-time home buyers make about a third of all home buyers, nationwide, according to the National Association of Realtors. 

The median age of a first-time buyer is 31, (making about $70k), while the median age of a repeat buyer is 53, (making nearly $100k).  It is safe to say that they do not have the same priorities.

While first-time home buyers usually settled in the past for a cheaper “starter home”, there are signs now that more want to have a home for the long term, holding back for a home that will work for them for a much longer time.  70% are willing to wait, rather than settle for that cheaper, smaller house with some repairs. 

Since we have been faced with a severe scarcity of “starter homes” for sale, compared with a few years back, the price tag of those properties went up drastically.  It is possible that first-time home buyers find that the price is not worth it any more and prefer to wait for more savings to buy a larger first home that will serve their needs for many more years.

Per the Residential Specialist (trsmag.com) the main home features that first time home buyers like most are, in order:

- updated kitchen and bathrooms (81%),

- an open floor plan (59%),

- low maintenance characteristics (43%),

- walkable communities (36%),

- energy efficiency (20%),

- cell phone service and wifi access (19%).

Those feature preferences are definitely evident in our market in the Silicon Valley, and with the exception of the last one, I think the order is pretty much the same.  Here, phone reception and wifi access is also close to the top of the list in my experience.

Thank you for reading!

Let me know if I can be of assistance to you, or someone you know, with real estate questions.

Francis

Silicon Valley real estate specialist
Detailed, local trends etc...
Current mortgage rates
A worthy local non-profit to remember: Community Services Agency in Mountain View

The State of the Nation's Housing - 2016

The State of the Nation’s Housing - 2016               

With this last report from the Joint Center for HousingStudies of Harvard University, we have a comprehensive look at the state of the US Housing.

In it, one can find important stats which can be found here and there in various real estate articles and publications, - and in some of my blogs, like:

Inventory (fig. 10, page 10): 

-       There are 1.9% fewer existing homes for sale in the US than one year ago,

-       7.8% fewer entry-level homes for sale,

-       New home sales still at their lowest, for the past 25 years (although the inventory of new homes for sale went up by 8.2% in 2015, which is a step in the right direction) - see page 9 and 10.

 

Homeownership:  fewer people own their home in the US:

-       Homeownership rate is much lower than before the 2008 crisis, over all at 63.7% (see page 19),

-       This is the case in pretty much all of the age groups (page 2).

-        The number of renters has increased by 9 million in the past 10 years, with vacancy rates falling and rents climbing, as we all know (especially in the Bay Area). Not so well known: people in their 50s and 60s make up the largest part of the increase in renters.

-       The number of renters paying more than 50% of income for housing jumped by 2.1 million, to a total of 11.4 million. (page 4).

-       A growing supply of new housing being built may help ease these conditions.  Something to follow up on …

Affordability:

-        The percentage of all households that can afford to purchase a median-priced, single-family home is called the Housing Affordability Index.  It is 60% for the US.  Compare this to California: 30%, and the County of Santa Clara: 20%

-       The share of adults aged 20-39 with student loan debt went from 22% in 2001 to 39% in 2013, while the average amount owed went respectively from $17k to $30k;  - this has an impact on the housing market as a whole: fewer homes sell as a consequence.  Since housing makes a good part of the economy, one could deduce that it is not good for the US.

-       Homebuying activity is much lower than before 2007, but is now on the uptick (pg.21).

 

Property value appreciation:

-       Very uneven, depending on the area.  Some areas still lag in appreciation (pg 11). Some areas are higher than at the peak before the 2007 crisis, and some are still way below.

-       Of course, overall, fewer homeowners are “under water”.   

The report, for those interested, is a treasure trove of fascinating information about our society and the US housing situation.   In trying to keep some perspective on the real estate market locally in the Bay Area, I find it enlightening, and offer the following graph that I keep over the years:

click on the graph for better viewing.

Thanks for reading,
Francis

Silicon Valley Real Estate
Smart local Stats and Graphs 
non-profit organization worth noting: Partners for New Generations.

Foreign buyers - California - US

The number of sales to foreign buyers rose once again over the past year, although international buyers are shifting their preferences from luxury homes to less-pricey properties.

NAR (National Association or Realtors) economists think the change in the price of homes international buyers are after may be due to overall higher home prices, along with a stronger U.S. dollar, which both cost foreign buyers more these days.

“Weaker economic growth throughout the world, devalued foreign currencies and financial market turbulence” all had an impact on foreign buyers over the past year, said Lawrence Yun, NAR’s chief economist.  “While these obstacles led to a cool down in sales from nonresident foreign buyers, the purchases by recent immigrant foreigners rose, resulting in the overall sales dollar volume still being the second highest since 2009.”

Foreign buyers purchased $102.6 billion of residential property in the U.S. between April 2015 and March 2016, according to NAR’s report. The number of properties purchased rose 2.8 percent to 214,885. The value of homes bought by foreigners was typically higher than the median price of all U.S. homes.

Experts say a slight drop in dollar volume is due to the types of properties purchased, and the locations of those properties. There are signs that foreign buyers have begun looking beyond higher-priced markets like San Francisco and New York to purchase properties in smaller, less-expensive cities in the Southeast and Midwest.

Chinese purchasers continued to outpace all others, with their dollar volume exceeding the total of the next four ranked countries combined. Their dollar volume of sales, at $27.3 billion, was three times as much as Canadian buyers, who were ranked second. Chinese buyers also bought the most expensive homes at a median price of $542,084.

Five states accounted for half of foreign buyer purchases, according to the NAR report: Florida, (22 percent), California (15 percent), Texas (10 percent), Arizona and New York (each at 4 percent).

 It is interesting to note that California is home to about 25% of all of the foreign-born population of the US.  Florida has only 9% of the foreign-born population of the US, as shown on the graph below:

 

Thank you for reading,
Francis
 

Silicon Valley real estate specialist
Detailed, local trends etc...
Current mortgage rates
A worthy local non-profit to remember: Community Services Agency in Mountain View.

California: Millennials - Baby Boomers

The definition of a Millennial is not straightforward as evidenced by the many resources found online. However, if we follow the general guidelines of the Pew Research Center we can agree that these would be the people between the age of 19 and 35 as of 2016  (i.e. born between 1981 and 1997).
For the 3rd straight year nationwide, millennial homebuyers made up the largest part of all homebuyers: 35%, edging out Gen X (26%), boomers (31%) and the silent generation (9%).

Lots has been said and written about the level of indebtedness found associated with this slice of the American population (see for instance the article by Maya Pope-Chappell that I show on my previous post on my FB page:  "buried-in-debt millennials...").  Because they are the largest part of all homebuyers, we can only assume that more people nationwide would be engaged into the process of owning a home if the Millennials were not so saddled with student loans.  This could have in turn very positive repercussions on the US economy as a whole.

In California, these are some of the stats for Millennials and Baby Boomers (born between 1946 and 1964):

Click on the picture to see it larger.

Thank you for reading,
Francis

Silicon Valley Real Estate
Smart local Stats and Graphs 
non-profit organization worth noting: Partners for New Generations.

News from the trenches .... in the Silicon Valley.

Taking the pulse of the local offices, and managers and agents in the local cities.  It does not get more "down to earth" and "raw" than that!   ;-)

SF Peninsula – Listing inventory is steadily increasing in the Burlingame area, and so are sales, according to our local manager. Across the hill in Half Moon Bay, there has been a continuous increase in inventory. Our local manager provided this update for the area of Half Moon Bay, El Granada, Montara, Moss Beach, and Pescadero market update: The average listing price is $1,428,716, highest listing price is $3,388,888, and the lowest listing price is $699,000. Pending Average listing price is $1,372,445, highest listing price is $1,988,000, and the lowest listing price is $785,000. Sold average listing price is $1,062,552, the sold price is $1,071,980, days on the market is 14 days. ...  Our Menlo Park manager said the local market is steady but cautious. No throwing money at houses now like caution to the wind. She adds that sellers are more likely to look at a pre-emptive offer now realizing that we could be close to the ‘top of the market’ if anyone can really see that without it being behind them.  Our Redwood City-San Carlos manager reports lots and lots of frustration out there for everyone (sellers, buyers, agents). It’s a definite alteration in the market (which was needed). Only the ideal homes with the ideal location and the ideal price are selling quickly. All the rest are remaining on the market with very little, if any, showings. The San Mateo market has slowed down, our local manager says. Our Woodside-Portola Valley manager says that
Woodside continues to be a good/bad market. It is a month to month thing. Big buyers are out there but always waiting for the RIGHT house. The market is feeling cautious, she notes.

Silicon Valley – Our Cupertino manager says homes are staying on the market longer and need to be priced right. Open houses are spotty. That can be a good thing because agents have more chances to engage visitors in conversation, and perhaps get new clients. She adds that the luxury segment has been slowing. In the Los Gatos area, competition remains heavy for entry-level homes listed under $2,000,000. More inventory is hitting the market in the $2,000,000 plus range. Our San Jose-Almaden manager says we’re starting to see an increase number of active listings as well as a lower number of homes pending in Santa Clara County. The available inventory is actually higher than the number of available in 2014. Not surprising were the lower number of units sold for May. There were 35 properties sold in Almaden for the month which is down 25% from last month and 18% from the previous year. Blossom Valley was slightly better with a total of 101 homes sold for the month which is down 8.5% from the previous year. Cambrian was almost flat, with 78 properties selling for the month which is just down 2.5% for the previous month and year. Santa Teresa had 27 homes sold which is down 16% from the same time last year. Willow Glen had a sleepy Memorial Day week. Sales were slow and not many new listings came to the market. The following week things started moving again we had one of our better sales weeks and listing inventory is back up to 92 units. We are still hovering at 3-4 year highs for active listing inventory. The local market seems to be driven mainly by price point. Anything under or around the $850,000 price point is drawing lots of attention and still attracting multiple offers well over list price.

It is my experience that in Los Altos / Mountain View / Palo Alto the market is a little slower like elsewhere, but still quite active: anything priced right is selling quite well, even if sometimes it is not right away (like the first week).  I think the consensus is that prices are going to be flatter unless the property is among the most desirable in its category (and not overpriced).
The least expensive house in Mountain View sold in April for $1,050,000.
The least expensive house in Palo Alto sold in February for $1,325,000  (with a lot of 2,875 sq.ft.).

Thanks for reading, and hoping each finds his/her own area in the above ;-)
Francis

Silicon Valley real estate specialist
Detailed, local trends etc...
Current mortgage rates

non-profit organization worth noting: Partners for New Generations.