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...
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.              

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