Reasons your neighbors hate you...

Well...  a little bit of humor mixed with some sound advice and remarks.. From Lucy O'Neill at the Improvement Center.

Francis
Silicon Valley real estate


9 reasons neighbors hate you
Courtesy of: ImprovementCenter.com

An unbalanced market...

As we advance deeper inside the year 2013, the sales figures start showing how much the market has been ... to put it mildly, unbalanced.
Here in this statistical recap coming from the CAR (California Assocation of Realtors) one can see how much the various Counties in the Bay Area have appreciated from March 2012 to March 2013.

Even though this is not exactly the 1-year appreciation, but only the jump from one month in 2012 to the same month in 2013, it certainly gives a good idea of the appreciation we are going to see at the end of the year, because in fact it is pretty much the same story month after month.

It sure is a steep rate of appreciation.  What do you think? Are we looking at a bubble, or does it reflect accurately the health of the local economy?

Thank you for reading,
Francis
Silicon Valley Real Estate

Smart stats

FTC - Tips on ID theft

Federal Trade Commission posts new video to help identity theft victims

The Federal Trade Commission has a new video designed to help facilitators who assist consumers in repairing their identity. Helping Victims of Identity Theft is the latest addition to the FTC’s library of resources that explain not only how to recognize identity theft, but also how to report it and repair the damage it can cause. The FTC gets more complaints about identity theft each year than any other consumer issue, and estimates that nine million consumers become identity theft victims each year.
The video promotes the Guide for Assisting Identity Theft Victims, a tool for advocates, social workers, attorneys, and others who work to help resolve the issues identity theft causes. The Guide is a complement to the do-it-yourself instructions in Taking Charge:  What To Do if Your Identity is Stolen.

When time comes to purchase a house or refinance, it is wise to double check one's credit reports to make sure no accounts have crept up without our knowledge.

Francis

Silicon Valley real estate
Local market: Smart graphs

The effect of interest rate change...

It is easier to visualize what happens to a mortgage payment when the interest rates go up or down.
The visual below is pretty good at showing it, I thought:

Looking for some good resources for lenders? Do not hesitate to call on me,

Thank you,

Francis
Silicon Valley real estate
Local market: Smart graphs

Note: our next free E-Waste collection and shredding event will be on: Sat. 4/6/13, at our Coldwell Banker office at 161 S. San Antonio Rd, Los Altos. Times: E-Waste 9am to 4 pm. Shredding: 10 am to 2 pm.

Condos are "back" !... and other real estate surprises

Bay area condos’ tight supply has buyers scrambling.
And prices are going up a lot as a result.

Across the Bay Area, buyers are fighting for a limited supply of new and existing condos.

Several factors are combining to create this situation:

  -  investors have already snapped up many foreclosures and short sales and are renting them out.

  -  homeowners who might sell in a typical market are either still on the sidelines watching prices rise or are underwater and can’t afford to sell (much fewer now than yesterday!),

  -  those homeowners who do want to move up cannot do so, as they question rightfully their ability to purchase a "replacement property" in this one-sided market (the lack of bridge loans does not help),

  -  demand has been growing, because of the good job market in the bay area, and also - interesting trend - because many buyers who went through short sales or foreclosures are becoming homeowners again, thanks in part to loans from the Federal Housing Administration.

  -  finally, as housing starts have risen in the past year or so, home sales haven’t kept up. The gap suggests that builders are overwhelmingly building for renters, not buyers.  This trend is better studied in this article by Nin-Hai Tseng of CNN.

Investors as well as builders did not fail to notice the significant increase in rental prices that we witnessed in the past 2 years (locally certainly, but nationwide too).  In a way, we can see a small part of this phenomenon unravelling in my last blog about the San Antonio shopping center, where for the time being the only residential units being built there are for rent.

Need to know the value of your condo?  Do not hesitate to contact me,

Thanks for reading, as always!
Francis

Silicon Valley real estate

Trends: Local prices and graphs.

Coming soon: The Peninsula French Fair  - Art, food, and good company!!
Sat. March 23rd, all day.

California - a history of home prices...

California, a history of home prices...

 

Click to read better

What a trip! Difficult to imagine, if you purchased your home in the 70's, what it would be like today.

Did you buy your house in that decade?  what's your experience: how much is your home worth today?

Francis

Silicon Valley real estate

Trends: Local prices and graphs.

Coming soon: The Peninsula French Fair
Sat. March 23rd

Silicon Valley Luxury Home Sales - up 54% from year ago, Coldwell Banker residential brokerage reports

SiliconValley Luxury Home Sales Up 54% from Year Ago, Coldwell Banker ResidentialBrokerage Reports

by cbwesternregion

Luxury home sales in Silicon Valley surged 54 percent last month from the same period a year ago, according to a new report by Coldwell Banker Residential Brokerage, the Bay Area's leading provider of luxury real estate services.

The figures are based on Multiple Listing Service data of all homes sold for more than $1.5 million last month in Santa Clara County.

A total of 113 homes sold for more than $1.5 million in December, up from 73 in December 2011. The median sale price of a luxury home closing last month was down 7.8 percent from a year ago to stand at $2,019,500.

On a monthly basis, sales in December were down slightly from November's level of 121 transactions, but the median sale price was up 6.8 percent from November's median of $1.89 million.
Other key indicators for the luxury market improved last month from the same period a year ago. There were 58 sales over $2 million compared to 33 a year ago, and 20 sales over $3 million versus six a year ago. Homes also sold faster and sellers received a higher percentage of their asking price on average.

“The luxury market in Silicon Valley closed out 2012 the way it began, with healthy sales and strong buyer interest," said Rick Turley, president of Coldwell Banker Residential Brokerage in the Bay Area.
Turley noted that some of the increase in sales could be due to luxury homeowners deciding to sell before the expected increase in the capital gains tax rate took effect in January. Additionally, demand remained strong from employees of Silicon Valley technology companies with stock option money to invest.

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

• The most expensive sale in Silicon Valley last month was a three-bedroom, two-bath approximately 3,200-square-foot home in Palo Alto that sold for $6.75 million;
• Palo Alto boasted the most luxury sales with 33, followed by Los Altos with 31, Saratoga with 21, and Los Gatos with 14;
• Homes sold in an average of 58 days, down from 65 days a year ago but up from 50 days the previous month;
• Sellers received an average of 101 percent of their asking price, up from 97 percent a year ago and the same as the previous month.

The Silicon Valley Luxury Housing Market Report is a monthly report by Coldwell Banker Residential Brokerage, a specialist in high-end real estate sales. Through its internationally renowned Coldwell Banker Previews® program, Coldwell Banker is recognized around the world for its expertise in the luxury housing market.

Coldwell Banker Residential Brokerage serves Santa ClaraCounty with 21 offices from Palo to Hollister.

Thanks for reading!
Francis

Silicon Valley real estate
Local market: Smart graphs

PS: coming soon: The French Fair, in Palo Alto.  March 23rd, 2013

The San Antonio shopping center

What is going on at the San Antonio shopping center?

Several clients have asked me about the new shopping center being built at the crossroads of Palo Alto, Los Altos and Mountain View.  The "Village" has its own web site where one can see the following information in more details (see below). But in a nutshell, there will be:
- a brand new, huge Safeway,
- a luxury appartment complex of 330 units, (not cheap as some people told me),
- and a new building with retail, office and restaurants.

A smaller building at the corner of San Antonio and El Camino will house retail stores.
 

Click to see larger Pix

larger pix

 

 

 More details and opinions can be found on this Town Crier article.  Indeed everyone has an opinion on the impact on 1/ the development of downtown Los Altos, as it tries to attract its own set of customers, and 2/ the Los Altos schools, as this development is part of the Los Altos elementary school district. Others worry about an already dense traffic situation in that part of town and I recall that the connections with existing biking paths were also part of the negociations during the approval process of the complex.

 

Some links of interest:

Local schools and Los Altos schoold district and school boundaries,

bike routes.

 

Thanks for reading!

Francis

 

Silicon Valley real estate
Local market: Smart graphs

Note: our next free E-Waste collection and shredding event will be on: Sat. 4/6/13, at our Coldwell Banker office at 161 S. San Antonio Rd, Los Altos. Times: E-Waste 9am to 4 pm. Shredding: 10 am to 2 pm.

2013 Cost vs Value Report

When you are thinking about selling your house, one of the first questions that will come to mind is: "what should I do to increase the value of my home?", which quickly becomes: "if I remodel, how much will I recoup"??

The Cost vs Value report is published every year and a lot of good information can be accessed from this article by Sal Alfano of the Remodeling Magazine of Jan. 2013.

Typically the data is sorted by project (kitchen remodeling, bathroom, etc..) and by region within the US.  (there are 4 regions).  Overall, the first thing that jumps out in the most recent report is that the ratio that one recoups has gone up, because of the recovery of the real estate market.

Results of the report are also summarized on NAR’s consumer website HouseLogic.com, which provides information on dozens of remodeling projects, from kitchens and baths to siding replacements, including the recouped value of the project based on a national average.

In my experience however, the return of a lot of these remodeling projects is much higher in our area, the Silicon Valley, than one can read in the Cost vs Value report.  I cannot put  an exact value on it of course, since each property is going to be different, but it is my experience that most buyers in the Bay Area are willing to pay a major premium for a property that has been remodeled and is ready to move in. 
Imagine a property worth $600k, that is in need of a new bathroom.  If you'd spend around $10k to remodel a bathroom (hypothetically), that would buy you a fairly nice remodeled bathroom.  The sales price is most probably going to be more than $610k in that example.

I believe that in this area, the Silicon Valley, if you know a contractor that will do a good job, for a reasonable price, and you have the time to stay involved in the project to monitor it, you would be better off with the remodel.  I also believe this is why there are so many purchases here which are investor-driven, and why there are so many multiple offers on "fixer-uppers".

Do you have any experience on this matter?  Let me know!

As always, thanks for reading!,
Francis Rolland

Silicon Valley real estate
Local market: Smart graphs

Note:  our next free E-Waste collection and shredding event will be on:
Sat. 4/6/13, at our Coldwell Banker office at 161 S. San Antonio Rd, Los Altos.
Times:  E-Waste  9am to 4 pm.  Shredding:  10 am to 2 pm.

Gifts for downpayment...

Notice to givers of down payments...  please read on:

Home buyers trying to scrape together enough money to cover the typical 20 percent down payment frequently look to relatives for help. About 1/4 of first-time home buyers were looking for some help from the family for their downpayment (typically 20% of the purchase price). But mortgage lenders closely scrutinize cash gifts, and the check may not count toward a home purchase if the borrower can’t thoroughly document its source and intention.

There are some rules to know and to follow, and it is easy to understand once you think as a bank: if one takes too much of a loan, the risk of not being able to pay it back increases.  So the help with the downpayment cannot be another loan, in one form or another.

This article from the New York Times (by Lisa Prevost, published: December 27, 2012) is most interesting and also gives some pointers as to some of the tax implications.

As always, I advise my clients to talk to the specialist: the lender, and to do so ahead of time because it may take time to structure the transaction properly.  The first stop in buying a property is really and truly the lender, in my opinion.

Thanks for reading,

Francis Rolland

Silicon Valley Real Estate

Smart stats

But, where did the old bridge loans go??

I am surprised that no one talks about it, but:  where did all the bridge loans go?

It used to be that when you wanted to move up, or move down, you could buy a property first, and then sell your current home.  You insured in the process that you would not be out of a place to live and you would only move once.

To achieve that, you would get a bridge loan. 

Banks used to lend you money, based on your qualifications of course, but also based on the fact that the old house would be sold immediately.  They required to see that the house was listed with a Realtor, and if the market was not awful, it made a lot of sense: the house would eventually sell, and the old loan would be paid back.  The banks did not take any risk doing so (the profile of customers doing this is not particularly risky when you think about it).

The fact that the market went seriously South is certainly a good enough reason to stop doing bridge loans.  But, haven't the banks heard yet that in the certain areas, it is a strong sellers' market?  You would think that they would have acknowledged that by now, in particular in the Bay Area.  And the Bay Area is by no means the only area with a sellers' market.

Among the many factors that would help the recovery of the real estate market nationwide, and the economy as a whole, this is a major one.  My experience is that a good 10 to 20% additional properties would be on the market if banks made bridge loans. Right now the way things are goes like this: sellers have to sell their house first, then buy the replacement home with the proceeds of the sale.  But since they are not sure at all that they will be able to buy because of the excessively competitive environment, they do not risk the move.

A bridge loan is the solution.  By freeing a lot of housing inventory, it would enable more people to buy homes (one just has to look at open houses in the Bay Area since the beginning of 2012 to see the demand), more loans would be made, and the market would go up - in a more orderly fashion than now.  The banks would certainly win: they are in the business of making loans, good loans.  And in these situations, there are two loans to be made, instead of just one.

So, what are they waiting for? 
Does your personal experience fit in this scenario? Let me know...

Thanks for reading,

Francis

Silicon Valley real estate
Local market: Smart graphs

Nearly 21 million U.S. homeowners are mortgage free

With all of the problems associated with real estate, and for new homebuyers the difficulty of getting a loan, one wonders: how difficult is it to own a place in the US.  Well, taking a step back, and seeing the big picture is always a bit surprising and informative, as evidenced by the article below.

Almost 21 million Americans, or 29.3 percent of homeowners, own their homes outright, unencumbered by a mortgage, according to a recent Zillow analysis of mortgage data.

Analyzing data through the third quarter of 2012, Zillow found that 20.6 million homeowners nationwide own their homes free and clear of mortgage debt.

Among the nation's 30 largest metro areas included in the study, Pittsburgh, Tampa, Fla.; New York, Cleveland, and Miami had the highest percentage of free-and-clear homeowners. Washington, D.C., Atlanta, Las Vegas, Nev.; Denver, and Charlotte, N.C. had the lowest percentage.

It is good to keep things in perspective.

Thanks for reading!

Francis

Silicon Valley real estate

Stats, smart graphs etc...

Current Mortgage rates

New laws (as in: fiscal cliff) & real estate...

President Obama signed the American Taxpayers Relief Act into law last Wednesday (1/9/13).

Here are some housing-related provisions included in the federal law:

- The restoration of a tax deduction for mortgage-insurance premiums, including premiums paid to the Federal Housing Administration and private mortgage insurers. This provision expired at the end of 2011 but has now been retroactively extended for all of 2012 as well as 2013.

- 10 percent tax credit (up to $500) for homeowners for energy improvements to existing homes is extended through 2013 and made retroactive to cover 2012.

- Capital gains rates will remain at 15 percent for those earning less than $400,000 (individual) and $450,000 (joint). Gains above those income levels will be taxed at 20 percent. Gains on the sale of principal residences will remain unchanged and continues to exclude the first $250,000 for single taxpayers and $500,000 taxpayers filing jointly.

- The “Pease Limitations” that reduced the value of itemized deductions, including the mortgage interest deduction, are permanently repealed for most taxpayers but will be reinstituted for high income filers. This provision reduces a taxpayer's itemized deductions by 3 percent of the amount of his or her adjusted gross income (AGI) that exceeds the threshold amount. Under the new law, the Pease thresholds are $300,000 for married taxpayers filing jointly and $250,000 for single taxpayers (i.e., a married couple with an AGI of $400,000 would be $100,000 over the threshold; the couple’s deductions would be reduced by $3,000 which is 3% of $100,000). No matter how high a taxpayer's AGI, the Pease reduction cannot exceed 20 percent of the amount of itemized deductions otherwise allowable for the year.


The bill includes a provision to extend the Mortgage Forgiveness Debt Relief Act, which will for one more year exempt the taxation of mortgage debt that is forgiven when homeowners and their mortgage lenders negotiate a short sale or loan modification (including any principal reduction). While debt relief has been extended at the federal level, the California exemption expired at the end of 2012, so forgiven mortgage debt is considered taxable state income for now.

This information is just in from our California Association of Realtors.  Of course, as always with tax questions, you are advised to check with your tax accountant how the new laws apply to you, and affect you in your particular situation.

Thanks for reading,
Francis

Silicon Valley real estate
Stats, smart graphs etc...

Current Mortgage rates

Fewer first-time homebuyers.

Is it a sign of the times?  Real estate fares much better today than last year, but a new trend emerges:
first-time buyers are fewer...

A survey by the NATIONAL ASSOCIATION OF REALTORS® found that only 31 percent of their sales were to first-time buyers. Normally, first-time buyers represent closer to 40 percent of the market.
More details about this (sad) trend on this article of the New York Times.

Thanks for reading!
Francis

Silicon Valley real estate
Smart graphs...

Current Mortgage rates

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

Home prices nationwide rise.

Home prices nationwide rise for eighth consecutive month.

CoreLogic’s October CoreLogic HPI report shows home prices nationwide, including distressed sales, increased on a year-over-year basis by 6.3 percent in October 2012 compared with October 2011, representing the biggest increase since June 2006 and the eighth consecutive increase in home prices nationally on a year-over-year basis.

Highlights as of October 2012:

• Including distressed sales, the five states with the highest home price appreciation were: Arizona, 21.3 percent; Hawaii, 13.2 percent; Idaho, 12.4 percent; Nevada, 12.4 percent; and North Dakota, 10.4 percent.
• Including distressed sales, the five states with the greatest home price depreciation were: Illinois, -2.7 percent; Delaware, -2.7 percent; Rhode Island, -0.6 percent; New Jersey, 0.6 percent; and Alabama, -0.3 percent.
• The five states with the largest peak-to-current declines, including distressed transactions, were Nevada, -53.5 percent; Florida, -44.5 percent; Arizona, -40.2 percent; California, -36.6 percent; and Michigan, -35.3 percent.

Corelogic Home price index.   (The CoreLogic HPI incorporates more than 30 years’ worth of repeat sales transactions, representing more than 65 million observations...)

Thank you for reading,

Francis

Silicon Valley real estate

Current Mortgage rates

Non-profit organization worth noting: Random acts of flowers.

Previews Luxury Market Report

The 2012 edition of the Previews Luxury Market report has been released! As 2012 comes to a close, Coldwell Banker Previews International® has taken a look back on the affluent marketplace for the December 2012 Luxury Market Report. Inside the report, you’ll find:

• Ultra-Affluent Market Survey. What motivates a buyer or seller at the very top of the market? We surveyed Previews® NRT agents who have either listed or sold a property priced at $10 million and above in the last three years to give you new insight into this rare consumer.

• Women of Affluence. Did you know that women control $20 trillion in consumer spending worldwide and women’s global incomes have been estimated to grow by $5 trillion in only a five-year span? Previews explores the reasons why affluent women have become one of the most influential groups in the luxury marketplace today, and how they’re rapidly changing the business of real estate.

• Top 10 U.S. ZIP Codes. This year, the ZIP code charts reveal a few new hotbeds for affluent buyers, such as Manhattan Beach, Calif. and Saratoga, Calif., in addition to the blue-chip luxury neighborhoods of Beverly Hills and Greenwich, Connecticut.

We hope this information will give you a more nuanced picture of the global luxury marketplace as we move into 2013. Click here to download the full report.

Thank you for reading,

Francis Rolland

Silicon Valley real estate

Current Mortgage rates

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