Tom McEvoy

On the front page of the Business + Technology section for May 6, 2008, San Jose Mercury News real estate reporter, Sue McAllister, published an article "More Bad News!". The gist of the article was that, according to Zillow, San Jose area home prices fell about 8% from a year ago. What's more, half of the 2006 home buyers owe more than their homes are worth.

In the article was a chart from Zillow that portrayed each Santa Clara County zip code and the range of their median price change from the first quarter of 2007. Now the chart was colorful to be sure but the differences to me were striking. Here are my thoughts on the article/released data:

• To be sure, some zip codes, most notably in the north part of Sunnyvale, East portion of San Jose and Gilroy are experiencing a major downward movement in prices and are listed in the "down 13-19%" category.
• Some zip codes are moving the other way! These are located in Palo Alto, Mountain View, Los Altos, Sunnyvale, Cupertino, Saratoga and a portion of Los Gatos. These are categorized as "up 1-10%" from a year ago.
• There are several zip codes that weren't listed in any price change category due to no data. Most notably these are located in Palo Alto where the market has been hot. Who knows, perhaps Zillow didn't want to release that zip codes 94301, 94304 and 94305 increased more than 10%. I found it quite interesting, though, that an active market area in the above zip codes had "no data recorded".
• To me, there is an issue with one-size-fits-all headlines as they most often paint a picture with too broad of brush. Obviously, a homeowner who lives in in one of the zip codes experiencing an increase over last year would be scratching their head.
  

To the best of my chart interpretation, I've listed each zip code and the corresponding median price change category. For more information, please visit www.mercurynews.com or view the full report at www.zillow.com.

Santa Clara County Zip Codes
Zip Code		Median Price Change
94022		Up 1-10%
94024		Up 1-10%
94035		ND
94040		Up 1-10%
94041		ND
94043		Down 3-7%
94085		Down 13-19%
94086		Down 7-13%
94087		Up 1-10%
94089		Down 13-19%
94301		ND
94304		ND
94305		ND
94306		Up 1-10%
95002		ND
95008		Down 7-13%
95013		ND
95014		Up 1-10%
95030		Up 1-10%
95032		Down 1-3%
95033		ND
95035		Down 7-13%
95037		Down 7-13%
95046		Down 13-19%
95050		Down 7-13%
95051		Down 3-7%
95054		Down 7-13%
95070		Up 1-10%
95110		Down 7-13%
95111		Down 13-19%
95112		Down 7-13%
95113		Down 7-13%
95116		Down 13-19%
95117		Down 3-7%
95118		Down 7-13%
95119		Down 7-13%
95120		Down 3-7%
95121		Down 13-19%
95122		Down 13-19%
95123		Down 13-19%
95124		Down 3-7%
95125		Down 3-7%
95126		Down 7-13%
95127		Down 13-19%
95128		Down 3-7%
95129		Up 1-10%
95130		Down 1-3%
95131		Down 7-13%
95132		Down 7-13%
95133		Down 7-13%
95134		Down 7-13%
95135		Down 7-13%
95136		Down 7-13%
95138		Down 3-7%
95139		Down 7-13%
95141		ND
95148		Down 7-13%
		ND = no data

In researching the current market value for either buyers or sellers, I proceed to review all recent sales as well as those homes that have sold but not closed escrow (sale pending). Current list prices are not as relevant due to the fact that some sellers have "sticky" prices that are obviously too high for their particular market. The outcome of my research is what I call the home's "relevant range" or the value most likely to produce a transaction in a reasonable length of time. By the way, my research to obtain the relevant range is normally done on a finer level and even at a neighborhood level as entire zip codes could mask what is occurring in a particular part of a zip code.

If you have any questions or feedback, please leave me a comment or send me an email. Thanks for reading!

Here is an update to some of the events and on-going programs you might want to put on your calendar for May. These are selections from Sunnyvale, Cupertino, Mountain View, Santa Clara and other communities in Silicon Valley.

• May 1: SNAIL Neighborhood Association, monthly, 7:00pm
• May 2: Heritage District Neighborhood Association, 7:30pm
• May 3: California Theatre Center presents "The Emperor and the Nightingale", 11:00am www.ctcinc.org
• May 3: California Theatre Center presents "Fame", 8:00pm, 408-245-2978
• May 3, 10, 17, 24, 31: Sunnyvale Farmer's Market, 9:00am
• May 4, 11, 18, 25: Fair Oaks Toastmasters, 11:30am
• May 4: Sunnyvale Community Players presents "Fame", 8:00pm, www.sunnyvaleplayers.org
• May 5: Sunnyvale Board of Library Trustees Meeting, 7:00pm
• May 6, 13: Sunnyvale City Council Meeting, 7:00pm
• May 7, 14, 21, 28: Kiwanis Club of Silicon Valley, 7:20am
• May 7: American Association of Retired Persons (AARP), monthly meeting, 1:30pm
• May 7: Heritage Preservation Commission Meeting, 7:00pm
• May 8: Wake Up Sunnyvale!, Sunnyvale Chamber of Commerce (408-736-4971) Breakfast, 7:29am, not too early for me so if you want an invite, give me a call at 408-830-0092
• May 10: Sunnyvale Health & Safety Fair, Columbia Neighborhood Center, 785 Morse Avenue, 11:00am, 408-523-8150 ext. 19
• May 12, 30: Sunnyvale Planning Commission Meeting, 8:00pm
• May 12: San Miguel Neighbors Association, general meeting, 7:00pm
• May 14: Sunnyvale Parks and Recreation Commission Meeting, 7:00pm
• May 14: Lakewood Village Neighborhood Association, monthly, 7:00pm
• May 15: Sunnyvale Bicycle & Pedestrian Advisory Commission Meeting, 6:30pm
• May 16: Sunnyvale Theatre, Life and the Story Art Lecture, 7:30pm, 408-864-4060
• May 17: Compost Workshop, 10:00am
• May 17: National River Clean Up Day, 8:30am, 408-730-7274
• May 17: Hands on the Arts, Sunnyvale Community Center, 10:00am, 408-730-7350
• May 17: Household Hazardous Waste Drop-Off, 8:00am-1:00pm, Sunnyvale residents
• May 19, 26: California Theatre Center presents, "Fame", 8:00pm
• May 19: Future Business Leaders Showcase, Sunnyvale Public Library, 5:00pm, 408-730-7300
• May 19: Sunnyvale Personnel Board Meeting, 5:00pm
• May 21: Sunnyvale Arts Commission Meeting, 7:00pm
• May 22: Sunnyvale Chamber of Commerce (408-736-4971) Business Mixer, 5:00pm, give me a call at 408-830-0092 if you want an invite from me
• May 23: City Council Budget Workshop, 8:00am, Council Chambers
• May 26: Memorial Day (observed)
• May 28: Sunnyvale Housing and Human Services Commission Meeting, 7:00pm
• May 28: Glaucoma Support Group of the South Bay, 6:30pm
• May 28: For Your Health, Community Lecture, Mother's Day Special, Matters of the Heart, 7:00pm, Sunnyvale City Council Chambers, 408-523-3295
• May 29: Community Forum on a Branch Library, 6:30pm, Sunnyvale Public Library

• Mondays, Wednesdays, Fridays: Computer and E-Waste Recycling, 8:00am-4:30pm, Cupertino proof of residency
• Every Wednesday: South Bay Community Orchestra, Noon-1:00pm for strings, 1:00-4:00pm for full orchestra
• Every Saturday: Family Astronomy Evenings, De Anza College Minolta Planetarium, 6:00pm, 7:00pm or 8:00pm
  

• Every Second Monday of Month: Fine Arts League of Cupertino, Quinlan Community Center, 7:00pm
  

Thanks for reading!

On a recent date night, my wife and I decided to visit another fine restaurant. We do this at least once each month where we choose a nice place to enjoy the food and ambiance and this time, we chose Fontana's Italian Restaurant on Stevens Creek in Cupertino.

While we've been to Fontana's a number of times over many years both on our date nights as well as with our two sons, we have never been disappointed.

We started things off by sharing their Caprese salad which was made with alternating fresh, sliced red-ripe tomato, fresh mozzerella cheese, pesto, roasted red pepper and capers. This was drizzled over with olive oil. Now we love caesar salads but this to us is our favorite. It was marvelous.

Our dinner entrees were outstandingly presented. We both ordered (first time in a long time we've both ordered the same entree) one of their specialties -- Scalone Indorati. It had a pounded, combined scallop and Abalone steak which was sauteed and served with a lemon-butter sauce. Included were ample sides of delicious garlic mashed potatoes and a vegetable mix. My wife loved it! Oh, so did I!

I chose a glass of Italian white wine to accompany my dinner which went well with the entree.

For dessert, we split a profiteroles al cioccolato which were a few small cream puffs willed with a vanilla custard topped with warm chocolate and caramel sauces. It was sweet as you might have guessed but the actual cream puffs were a little chewier than we had expected. Overall, we gave this a passing grade.

Apart from excellent food and comfortable surroundings, we were treated well by an attentive but not overbearing server. Till we return.


Fontana's Italian Restaurant
20840 Stevens Creek Boulevard (across the street from Whole Foods)
Cupertino, CA 95014
(408) 725-0188
http://www.fontanasitalian.com/

Give me a call at 408-830-0092, if you'd like to find out how you can qualify for an invite to my annual Client Appreciation Party so I can wine and dine you and a guest.


Thanks for reading!

My son, Kevin, who's nickname is Kmac, plays for the Fremont High School (Sunnyvale, CA) varsity baseball team.

Last Thursday, in a first-ever role as designated hitter (DH), Kmac went two for three, including two doubles and a sacrifice in four plate appearances. Not only that, his second double was of the walk-off two-run variety that launched the Fremont Firebirds over the Saratoga High Falcons by a score of 6-5.

Here's how it went down...

Going into the bottom of the seventh inning (high schools play seven innings in regulation), the score read Saratoga 5, Fremont 4. The Firebirds managed to load the bases and with two outs recorded, Kmac was up to bat. On a full count (3 balls, 2 strikes), Kmac hit a towering fly ball to deep left field. To set the stage a bit more, the Falcon's outfielders were playing a little closer in than normal because the potential tying and winning runs were on the bases. Anyway, the left fielder couldn't quite get to the ball allowing Kmac to steam into second base with the game-winning hit. His teammate, Tyler, who goes by the nickname, Tulo, was the pitcher of record for the Firebirds and with Kmac's game winning hit was able to notch the win. Kmac was greeted by his whole team and coaches in celebration of the victory.

For the rest of the story... Tulo's older brother, Troy Tulowitzki, plays shortstop for the Colorado Rockies, on the very same day was in the middle of a long duel of sorts with the San Diego Padres. The older Tulo, hit the game winning hit (a double -- how coincidental) to beat the Padres in the 22nd inning!

Congratulations to the Rockies, the Firebirds, both Tulo's and especially my son, Kmac!

Thanks for reading!

This information summary and analysis uses MLS Listings Inc. (MLS) transactional data for March 2008. For single family homes in Santa Clara County, March saw a reduction of closings of 34% from March 2007. There were 583 closings in the month with 869 initiated sales (accepted offers) that indicates that closings in April will be higher. This drop from last year occurred across the board in each of the counties I track closely: Santa Clara, San Mateo, Santa Cruz and Monterey. Both San Mateo and Santa Clara counties registered more sales than in February, in keeping with the normal seasonal trend toward Memorial Day. Santa Cruz and Monterey counties did increase from last month but only slightly.


Inventory of available homes was 5,303, up from 4,794 last month and up from 2,812 in March 2007. This places Santa Clara County at an all-time high. The remaining counties all are near their all-time highs for the number of available single family homes.


Days of Unsold Inventory (DUI) or the intersection of the inventory (supply) with the recent sales level (demand), shows Santa Clara County at 173, down from 186 last month but up sharply from 79 in March 2007. San Mateo County is at 105, down from 141 last month, Santa Cruz County at 209, even with last month. Monterey County showed DUI at 260, down from 368 last month. Clearly, even with the drops in this indicator, these still are indicating a buyer's market condition as a reading of DUI of 90 or above depicts. For 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 you get, the statistics are less reliable as a decision tool and also that there is often an incredible variation between those areas experiencing terrible market conditions compared to those at virtually the other extreme. As I've mentioned, 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. For instance, within Santa Clara County, Los Altos, Mountain View and Palo Alto have the best market climates in the county with a DUI reading of 60, down from 55 last month, while Morgan Hill, San Martin and Gilroy have the worst reading of 298. The following is a ranking of selected Santa Clara County cities or areas with their current DUI readings and last month's calculation in parentheses. Even though there are a lot of "improving" notations made, these areas are still in what we call a "buyer's market" and have poor market climates. Just some markets are much better off than others.

• Los Altos, Mountain View, Palo Alto - 60 (last month - 55) - worse
• Cupertino - 62 (45) - worse
• Almaden Valley - 85 (101) - worse
• Sunnyvale - 86 (69) - worse
• Cambrian - 88 (110) - improving
• Campbell - 94 (81) - worse
• Saratoga - 96 (86) - worse
• Blossom Valley - 125 (146) - improving
• Santa Clara - 125 (120) - worse
• Milpitas - 138 (146) - improving
• Willow Glen - 151 (137) - worse
• North Valley - 152 (146) - worse
• Evergreen - 152 (151) - worse
• Downtown SJ - 178 (177) - worse
• Los Gatos - 185 (174) - worse
• Santa Teresa - 210 (319) - improving
• East Valley - 236 (342) - improving
• South SJ - 250 (333) - improving
• Gilroy, Morgan Hill, San Martin - 298 (374) - improving
• Los Gatos Mountains - 340 (356) - improving

The median price for single family homes in Santa Clara County was $815,000 down from $830,000 the same month a year ago but up from $799,000 in December. This is a decline of 6.1% from the record high reached in April 2007 of $868,400. There is still an emphasis (overweighted percentage) of higher-priced homes sold as opposed to the more affordable homes but not as pronounced as last year when the sub-prime loan problems started in February 2007. The bottom 10% median selling price was $500,000 in March and showed a decline of 20% from the same month a year ago and the top 10% median price was $1,680,800 a drop of only 4% from March 2007. The median prices of single family homes in some areas of the county including Morgan Hill, San Martin and Gilroy (South County) and East Valley are now at the level first reached in May 2004! This means that since that time all of the price appreciation or price gains has disappeared. Not so in the northwest quadrant of the county including Palo Alto, Mountain View, Los Altos, Cupertino and parts of Sunnyvale (zip 94087) are at or near their all time highs! Median prices for single family homes by county in March 2008 were:

• Santa Clara County - $815,000 (March 2007 was $830,000 or a decline of 1.8%)
• San Mateo County - $910,000 ($906,000 or an increase of 0.4%)
  
• Santa Cruz County - $645,618 ($751,000 or a decline of 14.0%)
• Monterey County - $430,000 ($669,000 or a decline of 35.7%)
  

The price range with the lowest DUI is called the "sweet-spot" of the market. For March it remains the $1,000,000 to $2,500,000 range. Next comes the $750,000 to $1,000,000 range and then the $600,000 to $750,000 range. For condo/townhouses the picture is similar but slightly better with a DUI reading of 177, down from 187 last month. Potential real estate investment buyers take heart as the DUI picture has continued to post poor numbers and stands at 563, down from 520. This means under the current rate of sales of multi-unit properties, there are about 1.5 years of unsold supply! The "sweet-spot" of the multi-unit or investor class is also the range $1,000,000 to $2,500,000. Lenders have substantially increased the borrower's minimum requirements to obtain a loan for investor 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. Read an opportunity for smart, long term investors with adequate down payments.

Why is following all these trends and statistics worth it? I believe that informed clients make the best decisions. 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. This is one area I part company from other real estate agents as only a relative handful of agents invest the time to study the trends. I think most other agents spend time working on self-promotion ads for newspapers, magazines and stuff that fill your mailbox with either "brag" cards or "spray and pray" cards. The various real estate markets are too complex for media sound-bites or headlines as they generalize too much (i.e., the national real estate market, the Bay Area real estate market, etc.) and you lose the fineness of being able to use information strategically to make better decisions.

Just yesterday, the San Jose Mercury News had an article about the 24% drop in Southern California median prices. It's obvious that you don't buy or sell a home in Southern California but in a particular neighborhood in a particular city. It is therefore clear that you need strategies to deal with these differing market conditions and an agent who is able to digest the statistics and trends to better advise their client.

If you have any comments or questions, please feel free to post them here or send me an email at tom.mcevoy@remax.net.

Thanks for reading!