Here are my observations of the recent market action in Santa Clara, Santa Cruz, San Mateo and Monterey counties. You are encouraged to leave your comments and questions or even update us on what you are witnessing in your neighborhood.
> Increased Sales or Is It? -- Santa Clara County had higher single family residence closings in December than in November because of the calendar. Since the first of the year, closings have dropped into the higher 500 area with January at 568 and February at 579. Now the media states that sales increased 35% over the last year but that number is deceiving as it blends both single family and condos. First, single family residence sales increased by 37% and condos and townhouses increased by only 30%. This is significant in that there is a major shift toward single family residences. Second, the increase, though appreciated by some real estate agents, came off the slowest month since 2001. And third, while we're on this, a much higher level of transactions failed to close escrow than before. This means that all the paperwork entering escrow didn't fly!
> Auctions may cost you more! Many folks think that working with a Realtor as their buyer's agent will cost them money out of their pocket. In actuality, buyer's agents are paid out of the seller's proceeds at close of escrow. The gross commissions earned buy the buyer broker and buyer agent do not add to the sales price. Auctions, on the other hand, advertise that they'll sell you a home at 40-50% under market. The homes they sell have NEVER sold at that level so there is no comparison. Furthermore, to add insult to injury, many auction houses ADD their fees to the price paid by the buyer. This can be as much as 10% or more. What a deal!
Last year, I represented a buyer interested in bidding on a condo in San Mateo County. I made sure that my buyer wouldn't have to pay the auction house extra and that I might be able to earn a small fee representing her paid out of the seller's proceeds. With that cleared up front, she was successful in her bid and purchased the condo she wanted. By the way, my wife doesn't allow me to work for free!
> Property tax reviews -- Santa Clara County Tax Assessor, Larry Stone, stated that about 200,000 parcels (single family, condos, townhouses, multi-unit residential) will be reviewed for possible adjustments in their fair market values for property tax purposes. Well, with about 432,000 parcels in the county, that's nearly 50%! The estimated amount of these parcels which will actually be reduced is about 50% or about 100,000. Last year about 44,000 properties were adjusted.
> Free is better than well, not free -- Who wouldn't want to obtain a property tax adjustment? But, why pay extra for something that is essentially free. The county charges a standard filing fee of $30. I'm reminding you that some firms are charging $179 for something that you can do for the county standard filing fee of $30! When you receive a card from the county tax assessor in a few months and if you think the assessment is too high, go to the Santa Clara County Tax Assessor's website. You can click on Assessment Appeals under Quicklinks to read how to apply, important dates for homeowners, etc. You must file during the open period to qualify.
> The median prices for single family residences in the affordable areas of Santa Clara County are now below that of the median prices for condos and townhouses in the moderate price areas. If you don't like to mow lawns, in my professional opinion, there are currently better deals in condos/townhouses. Case in point, I just closed a transaction where my buyers purchased a San Jose condo for $377,000 which was under list price and where the list price had just been reduced by the bank who owned it. This same three-year old condo sold brand new in 2006 for $565,000.
> Buyers wait for sellers to reduce list price. One of the indicators I follow constantly is the average sales price to list price ratio. This ratio, currently standing at 97.8%, means that the average transaction sells at only a 2.2% discount to list price. Buyers will wait until sellers adjust their list prices rather than put in ridiculous offers. High list prices, relative to the current market, on some homes are one big reason that some buyers wait, and wait, and wait!
> Median prices, revisited. The calculation of median prices used to be a reliable "read" of the market. No so since the sub-prime stuff hit during 2007. Before, market mix (percent of total for different price levels) didn't vary much. Now we have a much higher of low-priced homes closing as a percent of total closings. For the record, the median price in February 2008 was $785,000 whereas the median for February 2009 was $450,000, a decrease of 42.7%.
> Another revisit? Can't sell your $5,000,000+ home? There have been NO sales of any homes in Santa Clara County priced above $5,000,000 reported through the MLS since early November! There are 34 of them on the market as of 3/11/09. In San Mateo County, one sale has taken place in the same price range. We'll see if it closes escrow!
> Want to sell with multiple offers? The percent of completed sales or closings with a sold price greater than list price increases again and now stands at 33.0%. This means that one out of three sellers received more than their asking price. Oh, and 7.5% of sellers received exactly list price.
> What happened, Foster City? -- With 57 homes available to sell and only two sold during February that means the calculation of days of unsold inventory (DUI) exploded to 998! This means that it would take 998 days to sell the existing inventory in Foster City. The calculation is theoretical but it tells me there's no demand from buyers. This could change quickly but if it doesn't, I see lower prices ahead.
> Investors, where are the investors? Multi-unit investor marketplace has had very few transactions with only 26 closings in February. Tougher lender requirements have contributed to this situation and probably can't leave out the stock market, too! I look at activity in this arena as it is an indicator of investor confidence in the future.
> Go, Monterey, go! Monterey County continues to see more closings than San Mateo County. Most of the transactions in Monterey County are bank-owned or REO's after a flurry of affordable home building in the county a few years ago caused a tremendous over-supply. This has not occurred in Santa Clara, Santa Cruz or San Mateo counties. For Monterey County, the days of unsold inventory (DUI) stands at 89, close to the level we can see price appreciation. Actually, the price levels below $450,000 have already reached the point where we can see price appreciation with a DUI reading of 54!
Thanks for reading -- what are your thoughts?
You've made dinner reservations at a romantic restaurant (I did at Pezzella's Italian Restaurant in Sunnyvale, CA) and you might have picked up a little something for her at her favorite store (I did that too. How about a beautiful orchid plant.) but then there's always sweets for your sweets for Valentine's Day.
In Silicon Valley, California also known at the Valley of Hearts Delight, here are some world class chocolatiers from Silicon Valley to Santa Cruz:
Chocolate Dream Box
Pictured are hand-crafted chocolates in beautiful boxes by Chocolate Dream Box
Fleur e Cocoa Patisserie Chocolaterie
39 N. Santa Cruz Avenue, Los Gatos. 408-354-3574
Pictured are selected handmade chocolates from Fleur de Cocoa
Pictured is Dark Chocolate Ganache Truffle from Sugar Butter Flour
Testarossa Vineyards
Why mention a winery? Because they're hosting a wine and chocolate pairing event on Saturday, February 14th from 11:00am to 4:00pm. Five of their award-winning wines will be paired with delectable chocolates. Nominal tasting cost is refunded upon a purchase of Testarossa wines. They're located in the historic Novitiate Winery in Los Gatos. It happens to be the oldest continuously operated winery in the Bay Area dating from 1888. And, I just happen to own a bottle of Novitiate Cabernet from about 1970!
Happy Valentine's Day!
Thanks for reading! What do you do for Valentine's Day?
Here are my observations of the recent market action in Santa Clara, Santa Cruz, San Mateo and Monterey counties. You are encouraged to leave your comments and questions or even update us on what you are witnessing in your neighborhood.
> Blame it on November -- Remember I said last month that "The market activity is turning around." There is a theory that we experienced higher closings in December because of the calendar. In looking at November, we didn't have any time to close transactions after Thanksgiving Day as county workers are still stuffed after the holiday. Whereas, there was a full week after Thanksgiving Day 2007. Everybody knows that Thanksgiving Day falls on the fourth Thursday of the month, right?
Can we also blame the calendar for less Christmas and Holiday sales? Maybe. Just think of this. In 2007, there were 32 days between Thanksgiving Day and Christmas. Last year, there were only 27! That's more than 15% fewer selling days.
> Sucked in by the touts you've heard that you can make a killing in real estate by buying property 40-50% under market? There are free seminars you can attend that "teach" you to do this. The catch -- you'll have to sign up for their $3,000 course because, of course, there's too much to provide you in the seminar. Folks, prices have already adjusted in many areas by 40% or more from their recent highs. What a willing, able buyer pays IS the market price!
> Want a property tax adjustment? Well, who doesn't! But, hold the phone. There are now firms that will charge you a fee of up to $179 for something that you can do for the county standard filing fee of $30! Santa Clara County is one of only a few counties out of 58 in California that are proactive when it comes to adjusting fair market values so they make the property tax rolls as accurate as possible. You'll receive a card from the county in a few months and if you think the assessment is too high, go to the Santa Clara County Tax Assessor's website. You can click on Assessment Appeals under Quicklinks to read how to apply, important dates for homeowners, etc.
> Closings of condos and townhouses continue to take a beating due to the improved affordability (read -- lower prices) of single family residences. January saw increased closings of single family residences of 68% over the same month a year ago. Condo and townhouse closings were up a mere 7%. If you don't like to mow lawns, in my professional opinion, there are currently better deals in condos/townhouses.
> Buyers wait for sellers to reduce list price. One of the indicators I follow constantly is the average sales price to list price ratio. This ratio, currently standing at 98.7%, means that the average transaction sells at only a 1.3% discount to list price. Buyers will wait until sellers adjust their list prices rather than put in ridiculous offers. High list prices, relative to the current market, on some homes are one big reason that some buyers wait, and wait, and wait!
> Market mix plays with median prices, revisited. As we said last month, market mix has helped to bring down median prices due to more low-priced homes closing as a percent of total closings. For instance, closings in East, Central and South San Jose (the more affordable areas in Santa Clara County) made up 12% of the total a year ago compared to 32% in January 2008. What would have occurred if we were to adjust for this significant change in mix? Well, the median price would have decreased about $200,000 due to this factor alone and real price depreciation would have accounted for the other $100,000 of the decrease. For the record, the median price in January 2008 was $743,500 whereas the median for January 2009 was $450,000.
> Another revisit? Can't sell your $5,000,000+ home? With the risk of bringing up another point raised last month, there have been no sales of any homes above $5,000,000 in now over nine weeks! There are 35 of them on the market as of 2/11/09, up from 27 the month before.
> Want to sell with multiple offers? The percent of completed sales or closings with a sold price greater than list price increases again and now stands at 37.4%. This means that more than one out of three sellers received more than their asking price. Oh, and 8.3% of sellers received list price.
> Record of sorts. Homes that closed in January had a median days on market (DOM) figure of 67, a record high. Compare that to those that were available to purchase having a median DOM of 100! This means that homes priced aggressively, well, sell.
> Investors, where are the investors? Multi-unit investor marketplace has had very few transactions with only 20 closings in January. Tougher lender requirements have contributed to this situation and probably can't leave out the stock market, too!
> Go, Monterey, go! Monterey County has seen way more closings than San Mateo County and again set another record high. Most of the transactions in Monterey County are bank-owned or REO's after a flurry of affordable home building in the county a few years ago caused a tremendous over-supply. This has not occurred in Santa Clara, Santa Cruz or San Mateo counties. Still, this means that there are buyers, buyers with money and buyers with money who can get loans!
Thanks for reading -- what are your thoughts?
Low cost radon test kits are available from the California Department of Health.
Non-scientifically, most radon is emitted from the soil under a home. However, some granite counter tops emit substantial radon and gamma radiation. Red granite seems to be a culprit but testing in the only way to make sure.
For an Industrial Hygienist resource, check out Indoor Air Answers. An industrial hygienist can quickly determine whether granite is radioactive and likely the source of the radon.
For home test kits, you can expect results in a couple of weeks.
Free testing? Yes, there is but for only certain types of granite (Jupurana Bordeaux, Niagara Gold, Four Seasons granite). If you have one of these types of granite, the Free Testing resource can be used.
Hope this helps. Let me know what your thoughts. Thanks for reading!
Happy New Year! OK, Happy Lunar New Year! In the Chinese calendar, the longest chronological record in history dating back to 2600 B.C., this year marks the lunar year 4,707 -- Year of the Ox. The first day of the new lunar year is January 26, 2009.
Famous people born in the Year of the Ox: Jack Nicholson, Jane Fonda, Heather Locklear, Juliette Lewis, Margaret Thatcher, Meg Ryan, Meryl Streep, Princess Diana, Vivien Leigh, George Clooney, Oscar De La Hoya, Charlie Chaplin, Walt Disney, Anthony Hopkins, Peter Sellers.
Here are some local events celebrating the Lunar New Year in San Mateo, Santa Clara and San Francisco counties.
Silicon Valley/Santa Clara County:
* Lunar New Year Blessing and Dedication Ceremony. Zen ceremony in Chinese and English followed by a vegetarian lunch. 9:00am - 2:30pm, January 25th. Chung Tai Zen Center of Sunnyvale, 750 E. Arques Avenue, Sunnyvale. Donations for lunch accepted. 408-733-0750. www.ctzen.org/sunnyvale
* Vietnamese Spring Festival and Parade. Festival will include Vietnamese arts and crafts, live performances, Miss Tet 2009, martial arts demonstrations, children's games and rides, talent show and food booths. 11:00am - 6:00pm, February 8th. 180 Park Avenue. San Jose parade: Market Street between Santa Clara and San Carlos Streets. Free. 408-292-8283. http://www.vsfsanjose.com/
* Lunar New Year Celebration. Traditional crafts, displays, martial arts demonstrations, music and dance performances and food tasting. 10:00am - 5:00pm, January 31st and Noon to 5:00pm, February 1st. Children's Discovery Museum, Woz Way and Auzerais Street, San Jose. Free. 408-298-5437, extension 205. www.cdm.org/.
*Lion Dancing. Enjoy traditional dim sum or dinner at a Year of the Ox celebration featuring The Young Lion Dancers. 7:00pm, January 25th, Ming's Chinese Cuisine & Bar, 1700 Embarcadero Road, Palo Alto. 650-856-7700. www.mings.com.
San Mateo/San Mateo County:
* Temple Fair. Community-sponsored Year of the Ox celebration includes street fair, musical performances, acrobatic and martial arts demonstrations, lion and dragon dancing. 11:00am - 3:00pm, Foster City Recreation Center, 650 Shell Blvd. 650-286-3380.
San Francisco:
San Francisco's Chinese New Year Parade began in 1860 and was named by the IFEA to be one of the top ten parades in the world! It is also one of the remaining night illuminated parades left in the country.
* 2009 Chinese New Year Parade, Saturday, February 7th. 5:15-8:00 pm, Market and Second Streets to Kearney and Jackson. Check out "Gum Lung", the 201-foot-long Golden Dragon!
• January 23 - February 8, Chinese New Year Carnival, Daily 10am - 10pm
Walter U. Lum Place, Washington & Clay Streets
• January 24 - January 25, Flower Market Fair, Saturday 10am-8pm, Sunday 9am-6pm, between Clay and Broadway, from Kearny to Stockton. Check out the flowers, plants and food for sale. Entertainment includes lion dancing, Chinese opera, martial arts demos and a petting zoo.
• January 26, Chinese New Year Day
• January 31, Miss Chinatown U.S.A. Pageant, 7:30pm, Palace of Fine Arts Theatre, 3301 Lyon Street at Bay Street
• February 6, Miss Chinatown U.S.A. Coronation Ball, 6pm - midnight, Black-tie dinner/dance, San Francisco Hilton & Towers, 333 O'Farrell Street, tickets: (415) 982-3000
• February 7, Chinese New Year Parade, 5:15pm - 8:00pm, Market and Second Streets to Kearny and Jackson. Highlights include elaborate decorated floats, costumed elementary school groups, stilt walkers and more. Check out the 201-foot-long Golden Dragon "Gum Lung"!
• February 7-8, Community Street Fair, Saturday 10am - 4:30pm, Sunday 9am-5pm,
Pacific to Washington, between Kearny and Stockton. Enjoy dance and music from throughout Asia and experience ancient and modern Chinese arts such as calligraphy, kite-making and acrobatics.
• February 7-8, Spring Festival, 11am - 4pm, Chinese Culture Center, 750 Kearny Street, 3rd Floor.
• February 15, Chinatown 10K Run, 5K Run/Walk, 7am: Pre-registration at Portsmouth Square, 8am: Race begins at Grant and Sacramento
The Chinese Calendar names each year after an animal and legend has it that a person born under a certain animal will display traits of that animal. I was born in the year of the Tiger. What sign are you in the Chinese 12-year calendar cycle? Look up in the table below what year you were born and the corresponding animal.
Rat: 1924 1936 1948 1960 1972 1984 1996 2008
Ox: 1925 1937 1949 1961 1973 1985 1997 2009
Tiger: 1926 1938 1950 1962 1974 1986 1998 2010
Rabbit: 1927 1939 1951 1963 1975 1987 1999 2011
Dragon: 1928 1940 1952 1964 1976 1988 2000 2012
Snake: 1929 1941 1953 1965 1977 1989 2001 2013
Horse: 1930 1942 1954 1966 1978 1990 2002 2014
Ram: 1931 1943 1955 1967 1979 1991 2003 2015
Monkey: 1932 1944 1956 1968 1980 1992 2004 2016
Rooster: 1933 1945 1957 1969 1981 1993 2005 2017
Dog: 1934 1946 1958 1970 1982 1994 2006 2018
Boar: 1935 1947 1959 1971 1983 1995 2007 2019
Gung Hey Fat Choy! Happy Year of the Ox!
Chúc Mừng Năm Mới! Happy Year of the Water Buffalo!
Thanks for reading!
In the heart of Silicon Valley, CA, broker assists with residential and commercial properties. Visit my website for buyer and seller tips, MLS access, email listing alerts, many free reports and more.
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