Tom McEvoy

Have you ever wondered why you gravitate back to certain restaurants? Well, that's just what happened last weekend when my wife and I were hungry for La Paloma in Santa Clara. Patrons for more than 25 years, we enjoy the good value, authenticity as well as the great taste.

We usually start off with a simple side salad instead of appetizers as their chips and salsa are very good! Next -- what to have for dinner?

Since we're eating lighter, we opted for fish. My wife chose the Grilled Salmon Filet off of their regular menu. At $13.50, it included a fresh salmon filet that was char-grilled and served with your choice of our tangy tomatillo avocado salsa, or topped with their fresh mango salsa. Carol chose the mango salsa which she said was excellent. The dinner also included grilled garden vegetables, rice, and jalapeño tartar sauce.

For my dinner, I ordered the Char-grilled Red Snapper off of their specials menu. It too was $13.50, and was served over a tomatillo-avocado salsa and came with rice and beans which I asked to switch the beans with grilled garden veggies. The fish was perfectly flaked done and tasted wonderfully with the salsa and accompaniments. I chose one of their margaritas to top off the dinner. The margarita, I prefer them frozen and with salt, tasted great and was of great value.

Dessert -- who has room for any dessert? We passed on dessert as the dinner with the salad, chips and salsa was more than ample! Highly recommended.

La Paloma Restaurante
2280 El Camino Real
Santa Clara, CA 95050

(408) 247-0990


If you'd like to enjoy great food and service at fine restaurants and obtain a discount in the process, please give me a call and I'll let you know how you can get a complimentary Passport Unlimited card.

I encourage you to leave a comment. Be sure to mention what your favorite restaurants are. Thanks for reading!

As a kind of executive summary of my observations of the recent market action in Santa Clara County, I've assembled a list of tidbits for you. I encourage you to make comments, ask questions or even update us on what you are witnessing in your neighborhood.

• The market activity is turning around. Closings in December was higher than November, something that hasn't happened since 2001. Could this be an early sign of a bottom in this market? We'll see.

• Sell thrice, close once! With all the bank-owned and short sale homes on the market, most of them are in the lower-price ranges. Many of these homes sell multiple times but only close once! This is due to issues with either the property or the buyer's financial readiness or loan situation.

• Condos and townhouses sales volume continues to take a beating due to the improved affordability (read -- lower prices) of single family residences.

• Inventory back up. The inventory of available single family residences started upwards on January 3, 2009. All-time high levels were reached last April and after a couple of blips upwards in September and October, the trend has been lower until now. Sellers take note -- 2009 likely will be another soft year. Sellers will need to sell sooner this year and be more aggressively-priced to avoid a home languishing on the market.

• Market mix plays with median prices. Market mix is bringing down median due to more low-priced homes selling as a percent of total sales volume. Remember, we had just the opposite situation a couple of years ago with high-priced homes selling and few lower-priced homes when the sub-prime loan issues hit in the Summer of 2007. You want proof? Try this: the median prices for the 10th percentile dropped 45% while the median (50th percentile) has dropped 36% and the 90th percentile has dropped only 27%. For additional information on this, please click on my recent post on this topic Beware the Median Price Deception.

• Can't sell your $5,000,000+ home? There have been no sales of any homes above $5,000,000 in over five weeks!

• Want to sell with multiple offers? The percent of completed sales with a sold price greater than list price stands at 35% which means that more than one out of three sellers receive more than their asking price. This is attributable to sellers aggressively pricing their home in a slowing market.

• Homes that closed in December had a median days on market (DOM) of 55. Those that stayed on the market had a median DOM of almost double -- 106! This is a bigger disparancy than before as homes priced aggressively sell.

• Investors, where are the investors? Multi-unit investor marketplace has had very few transactions with only 29 closings in December, far lower than the record monthly closings of 94 a couple of years ago. 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 more closings than San Mateo County and are at record highs. 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 a more detailed analysis of the market, please click on my January Silicon Valley Real Estate Market Update.

Thanks for reading -- what are your thoughts?

As much as they would have you believe that home prices act like stock prices, don't buy it!

When a stock trades at a certain price (let's say, Google at $300 per share), all shares are valued at the current price. Hence, the "fair market value" of each of Google's approximately 315,000,000 shares outstanding equals $300.00.

However, not all homes sell each month. Determining the fair market value of a home becomes more of an analytical challenge.

In December, 676 single family homes closed escrow in Santa Clara County. The calculated median price (half above and half below or the middle transaction) came to $512,450. The figure is calculated on just what closed escrow in December, not a figure you can assign to all homes.

In the second half of 2007, when the sub-prime loan issues started to surface with a vengeance, the sales of lower-priced homes decreased significantly as a percent of the total homes as the mix of higher-priced homes expanded. What did this do to the median price? It jumped upwards!

Currently, we've witnessed a flurry of activity in the sales of lower-priced or affordable homes including bank-owned and "short sale" (preforeclosure) homes. This is the exact opposite affect of what occurred in the later part of 2007, as the percentage of lower-priced homes make up a greater percentage of the total closings which dramatically decreases the median price. We can estimate that if the mix of homes had remained the same, the median prices would have fallen about one-third of the amount of the total decrease. That means about two-thirds of the fall in the median price is due to the mix shifting toward the lower-priced homes.

My point is that median price statistics should not be used in isolation but in conjunction with well-researched and analyzed transactional data available to your friendly Realtor.

Understanding the shifts in the markets and changes in trends (the whys) form a major part in formulating the appropriate strategy your Realtor uses to advise clients on their purchase or sale in terms of timing and determining what I call the "relevant range" of fair market values.

For an update on the current market trends in Santa Clara, San Mateo, Santa Cruz and Monterey counties, please click on my January Silicon Valley Market Update.



Thanks for reading!

This information summary and analysis uses MLS Listings Inc. (MLS) transactional data for December 2008. For single family homes in Santa Clara County, December saw an increase in closings of 38% from December 2007; closings of condos/townhouses saw an increase of 10% in the same period. For single family residences, there were 676 closings in the month with 876 initiated sales (accepted offers). As you know, not all accepted offers result in a closing. Closings of single family homes also increased in San Mateo and Monterey counties whereas Santa Cruz County saw a slight drop. A positive aspect to the market for this time of year -- closings increased from November to December. This is the first time that has happened since 2001. Normally, we see a decrease in closings through December.

Inventory of available single family homes in Santa Clara County was 3,926, down from 4,622 last month and also down 3% from the same month last year. Similarly, San Mateo, Santa Cruz and Monterey counties showed trends toward lower inventory levels. Much of the decrease has to do with expiring listings at December 31st. I expect we will see increased inventory as sellers will relist their homes and banks will resume foreclosure activity that will result in more bank-owned homes coming on the market.


Days of Unsold Inventory (DUI) or the intersection of the inventory (supply) with the recent sales level (demand), shows Santa Clara County at 147 for single family residences and 187 for condos/townhouses, modest increases from last month. San Mateo County is at 160 and 171, respectively. Santa Cruz County has a DUI reading of 215 and 235, respectively. Monterey County showed DUI at 129 and 190, respectively, and is the only county where this indicator has improved from November. Please remember that a lower figure is good here and that a declining measure represents an improvement in the market. Clearly, these levels continue to indicate a buyer's market condition as a reading of DUI of 90 or above depicts. As a comparison, a seller's market will have a DUI of less than 45 and a balanced market will have a DUI between the two. Keep in mind that these are county-wide averages and some areas historically have different levels. The wider area you measure, the statistics are less reliable as a decision tool for any specific area or neighborhood and also that there is often an incredible variation between those areas experiencing terrible market conditions compared to those that are stable. That's why I've mentioned that those statistics presented in newspaper and online articles are so general as to not be of much use as a decision tool for an individual making a decision on a home purchase or sale in a particular area. Real estate is local (down to the neighborhood level) and market conditions can vary within each county and even within cities by a large amount. Recently, local real estate is even more important now than ever as we witness an even greater of variance between the different areas.


The median price for single family homes in Santa Clara County now stands at $512,450, down 35.9% from $799,000 the same month a year ago. These sudden changes in the median prices (first way up and now way down) show that the real culprit or cause in most of the drop is a shift in the mix of what is actually being sold. Currently, there are a large number of lower-priced homes that closed and thus make up a larger portion of the total sales. Before, we witnessed a mix shift toward the higher-priced homes and saw the median price spurt higher. If you want more detail please contact me. Recently, the stock market crash has caused a major pause in the real estate market but only in the moderately-priced and higher-priced areas. The most affordable priced areas haven't been affected! The bottom 10% median selling price (10th percentile) was $300,000 in December and showed a decline of 45.5% from the same month a year ago and the top 10% median price (90th percentile) was $1,243,500, saw a drop of 26.9% from December 2007.


The price range with the lowest DUI reading we call the "sweet-spot" of the market for single family homes continues to be the $450,000 and under range with a DUI reading of 94. Next comes the $450,000 to $600,000 range with a DUI reading of 145. For condo/townhouses the picture looks similar with the sweet-spot being the $300,000 and under range with a DUI reading of 144.

For real estate investment buyers, the DUI for residential investment property has dramatically decreased and in now at 289 versus 302 last month. This means under the current rate of sales of multi-unit properties, there are about 9.6 months of unsold supply versus 10.1 last month. With lower activity (29 closings in December), this remains a prime period for negotiation for a buyer with preapproved financing and adequate investment funds. As mentioned before, many lenders have substantially increased the borrower's minimum requirements to obtain a loan for investment property purchases AND many are not allowing the use of home equity credit lines for their down payments so I forecast that this area will remain weak and characterized as a buyer's market. This remains an area of opportunity for smart, long term investors with adequate down payments that have an appropriate long-term investment horizon. Matter of fact, we now see much better rates of return on rentals than previous. Rental vacancies are relatively low and steady. Last year, rents increased about 10% in Santa Clara County.


Why is following all these trends and statistics worth it? I believe that informed clients make the best decisions -- both buyers and sellers. The research and staying on top of the changes to market conditions allows me to properly advise my clients on the appropriate strategy to employ so that they make the best decision possible whether they decide to buy or sell. This is an example of how I invest my time to benefit my clients. Most other agents spend the bulk of their time working on self-promotion ads for newspapers, magazines and send you stuff that fill your mailbox. Beware the various media sound-bites or headlines as they generalize too much (i.e., the national real estate market, the Bay Area real estate market, etc.). If you generalize too much you lose the fineness of being able to use current information strategically to make better decisions.

If you're curious about market conditions in a specific area, please don't hesitate to give me a call. I review details of the supply and demand within the smallest area possible. With the credit situation we're experiencing, banks will be more aggressive in approving loan modifications which will slow down foreclosure activity. If you need advice regarding your loan situation, please give me a call and whatever you do, explore your options fully before making a decision. However, not all borrowers will qualify for a loan modification and so there will continue to be some bank-owned properties available in the future. I have access to four major sources of bank-owned homes so if you'd like to explore this area, please give me a call to set up an appointment.

Your comments are welcome! Please feel free to post them here or send me an email.

Thanks for reading!

This information summary and analysis uses MLS Listings Inc. (MLS) transactional data for November 2008. For single family homes in Santa Clara County, November saw an increase in closings of 7% from November 2007; closings of condos/townhouses saw a decrease of 16% in the same period. For single family residences, there were 613 closings in the month with 892 initiated sales (accepted offers). As you know, not all accepted offers result in a closing. Closings of single family homes also decreased in San Mateo County by 8%.

Inventory of available single family homes in Santa Clara County was 4,622, down 366 from last month but up 2% from the same month last year. San Mateo County inventory decreased by 222 to 1,432, and dropped 6% from November 2007. Similarly, Santa Cruz and Monterey counties show trends toward lower inventory levels.


Days of Unsold Inventory (DUI) or the intersection of the inventory (supply) with the recent sales level (demand), shows Santa Clara County at 143 for single family residences and 173 for condos/townhouses, modest increases from last month. San Mateo County is at 127 and 160, respectively. Santa Cruz County has a DUI reading of 193 and 163, respectively. Monterey County showed DUI at 140 and 208, respectively. Please remember that a lower figure is good here and that a declining measure represents an improvement in the market. Clearly, these levels continue to indicate a buyer's market condition as a reading of DUI of 90 or above depicts. As a comparison, a seller's market will have a DUI of less than 45 and a balanced market will have a DUI between the two. Keep in mind that these are county-wide averages. The wider area you measure, the statistics are less reliable as a decision tool for any specific area or neighborhood and also that there is often an incredible variation between those areas experiencing terrible market conditions compared to those that are stable. That's why I've mentioned that those statistics presented in newspaper and online articles are so general as to not be of much use as a decision tool for an individual making a decision on a home purchase or sale in a particular area. Real estate is local (down to the neighborhood level in some cases) and market conditions can vary within each county and even within cities by a large amount. Recently, local real estate is even more important now than ever as we witness an even greater of discrepancies between the different areas.


The median price for single family homes in Santa Clara County now stands at $515,000, down 40.0% from $858,000 the same month a year ago and down 35.5% from the December 2007 reading of $799,000. These sudden changes in the median prices (first way up and now way down) show that the real culprit or cause is a shift in the mix of what is actually being sold. Currently, there are a large number of lower-priced homes that closed and thus make up a larger portion of the total sales. Before, we witnessed a mix shift toward the higher-priced homes and saw the median price spurt higher. If you want more detail please contact me. Recently, the stock market crash has caused a major pause in the real estate market but only in the moderately-priced and higher-priced areas. The most affordable priced areas haven't been affected! The bottom 10% median selling price (10th percentile) was $300,000 in November and showed a decline of 48.0% from the same month a year ago and the top 10% median price (90th percentile) was $1,079,000, saw a drop of 34.4% from November 2007.


The price range with the lowest DUI reading we call the "sweet-spot" of the market for single family homes continues to be the $450,000 and under range with a DUI reading of 90. Next comes the $450,000 to $600,000 range with a DUI reading of 133. For condo/townhouses the picture looks similar with the sweet-spot being the $300,000 and under range with a DUI reading of 130.

For real estate investment buyers, the DUI for residential investment property has dramatically decreased and in now at 302 versus 259 last month. This means under the current rate of sales of multi-unit properties, there are about 10 months of unsold supply versus 8.5 last month. This remains a prime period for negotiation with a buyer with preapproved financing and adequate investment funds. As mentioned before, many lenders have substantially increased the borrower's minimum requirements to obtain a loan for investment property purchases AND many are not allowing the use of home equity credit lines for their down payments so I forecast that this area will remain weak and characterized as a buyer's market. This remains an area of opportunity for smart, long term investors with adequate down payments that have an appropriate long-term investment horizon. Matter of fact, we now see much better rates of return on rentals than previous. Rental vacancies are relatively low and steady. This year, rents are estimated to increase 10-12% in Santa Clara County.


Why is following all these trends and statistics worth it? I believe that informed clients make the best decisions -- both buyers and sellers. The research and staying on top of the changes to market conditions allows me to properly advise my clients on the appropriate strategy to employ so that they make the best decision possible whether they decide to buy or sell. This is an example of how I invest my time to benefit my clients. Most other agents spend the bulk of their time working on self-promotion ads for newspapers, magazines and send you stuff that fill your mailbox. Beware the various media sound-bites or headlines as they generalize too much (i.e., the national real estate market, the Bay Area real estate market, etc.). If you generalize too much you lose the fineness of being able to use current information strategically to make better decisions.

If you're curious about market conditions in a specific area, please don't hesitate to give me a call. I review details of the supply and demand within the smallest area possible. With the credit situation we're experiencing, banks will be more aggressive in approving loan modifications which will slow down foreclosure activity. If you need advice regarding your loan situation, please give me a call and whatever you do, don't go to an intermediary trying to extract a price for something you can get for free! However, not all borrowers will qualify for a loan mod and so there will continue to be some bank-owned properties available in the future. I have access to four major sources of bank-owned homes so if you'd like to explore this area, please give me a call to set up an appointment.

Your comments are welcome! Please feel free to post them here or send me an email.

Thanks for reading!