Tom's Blog

1666 Martin Avenue, Sunnyvale, CA 94087 -- Tastefully Updated Birdland Sunnyvale Home with Cupertino Schools

Tom McEvoy (RE/MAX Santa Clara Valley) — Fri, 13 Nov 2009 22:43:23 -0600

Attend an Open House on Saturday and Sunday, November 14 & 15 from 1:30 to 4:30, sharp!

~ Established Birdland, Sunnyvale Neighborhood Home with Cupertino Schools ~

Beautiful hardwood floors highlight this tastefully-updated Lindsey home with expanded master suite, kitchen and bathrooms. Kitchen was extensively remodeled and offers expansive, Corian counter tops, upgraded cabinetry and top built-in appliances. Living room can be used as dining room. Step-down family room with gas fireplace and wet bar opens to patio with wood deck and spa — great for family gatherings. Recent upgrades include 40-year roof, gutters/downspouts, and fresh exterior paint. Stocklmeir Elementary, Cupertino Middle, Fremont High School.

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October Silicon Valley Real Estate Market Highlights

Tom McEvoy (RE/MAX Santa Clara Valley) — Thu, 15 Oct 2009 13:52:03 -0500

Here are my observations of September's transactions and market actions for Santa Clara, San Mateo, Santa Cruz, and Monterey counties. You are encouraged to leave your comments and questions or even update us on what you are witnessing in your neighborhood or area.

> Market continues showing strength and improvment -- Market activity has continued to display improvement for five months. For instance, in Santa Clara County, September saw an 18% increase in closings over the same month last year. My analysis of the transactional information reveals:

Buyers continue to trip over each other to submit offers for homes in the more affordable areas of Santa Clara, San Mateo, Santa Cruz, and Monterey counties. Many offers submitted are for all cash or have substantial down payments. There are still only 22 days of unsold inventory on single family residences in Santa Clara County with a price of under $450,000! For those in the range of $450,000 to $600,000, there is only 33 days of unsold inventory. It is similar in San Mateo County.
The supply of homes available for sale (inventory) continues to trend lower in each of the four counties without exception. The lower trend is still more pronounced in Santa Clara and Monterey counties.
The sale price to list price ratio is above 100% in Santa Clara County and stands at 101.2%, continuing an upward trend; San Mateo stands at 99.8%.
The Days of Unsold Inventory (DUI) continues to improve generally in each county for single family residences and condos/townhouses, respectively. Santa Clara's DUI stands at 49 and 42, San Mateo's DUI is 71 and 73, Santa Cruz's DUI is 107 and 154 and Monterey's DUI is 66 and 91.

> Super-heated Seller's Markets? -- White-hot markets are located in Santa Teresa, Blossom Valley, South San Jose, North Valley, East Valley, Evergreen, Milpitas. To refresh you, characteristics of a seller's market are shorter time on the market, fewer number of homes available for sale, higher probability of multiple offers with many sale prices exceeding list prices and a tendency towards price appreciation.

> Buyer's Markets? -- For Santa Clara County, we see buyer's markets in Los Gatos, Los Gatos Mountains with Saratoga the market that exhibits the highest Days of Unsold Inventory at 155. To refresh you, characteristics of a buyer's market are longer time on the market, higher number of homes available for sale, lower probability of multiple offers or even an offer with most sale prices below list price. The tendency is to have price depreciation or stable prices at best case under this market condition.

Where do I get "Seller's" and "Buyer's" market information? This is not an opinion thing but a calculation I make using the number of homes for sale (supply) and the number of sales (demand) in the prior month which results in days of unsold inventory (DUI). This is not a price thing but a supply-demand thing. For instance, higher-priced area of Palo Alto/Mountain View/Los Altos exhibits a DUI of only 64 which translates into a balanced market.

> Median prices. Up sharply since March but declined from $590,000 last month, it stands at $565,000 for Santa Clara County, $699,250 for San Mateo County. These are down about 6% from the same month a year ago in Santa Clara County and down 7% in San Mateo County. An entire county's median price level should not be used to decide on whether to buy or sell. I recommend you work with a real estate advisor who can complete an analysis on a much smaller area (as small as a neighborhood!) to form the basis of a strategy.

> Tale of Two Markets -- Sales of affordable homes in Santa Clara County less than $450,000 level have gotten even hotter than the past few months. There are just 22 days of unsold inventory for single family residences below $450,000 and 33 for homes with prices from $450,000 to $600,000. As the price ranges increase, the DUI increases. For Santa Clara County, high-priced homes in the $2,500,000 to $5,000,000 range showed a DUI of 341 or almost one year of inventory whereas in San Mateo County showed a similar result of 331!

> Polarized Market -- Sales of higher-priced homes (above $1,000,000) are sluggish at best, depending upon area. Last month, we had one sale of a $5+ million home in Santa Clara County (4.3 years of unsold inventory!) and just two in San Mateo County (2.0 years of unsold inventory). With slow movements in higher-priced homes and a white-hot situation in lower-priced homes, I call this a polarized market.

> TFT PDQ -- A "TFT" stands for Transaction Fallen Through and has occurred much more frequently of late and is especially evident in short or bank-owned transactions which we call "lender-controlled" transactions. Many buyers walk away from short sales due to their extremely long escrows lasting months as banks sit on paperwork and do not make decisions in a timely manner. So, the short sale listing sells again and again, in many circumstances but does not close. For this reason, I advise buyers to steer away from short sales.

Lender-controlled transactions accounted for 43% of the closings last month in Santa Clara County. We're far better off. Monterey County saw 72% of their closings made up of lender-controlled transactions (short sales and bank-owned). I have anecdotal evidence that in some Central Valley locations the percentage is 90%!

> Sellers Be Sooner -- I continue to maintain my recommendation for sellers of higher-priced homes that they should consider selling sooner and having an initially more-aggressive list price as the market usually softens when we go move into the fall and the holiday season. In any case, check with a Realtor knowledgeable about the technical aspects of the market conditions to guide you in positioning your home for maximum activity and price while minimizing time on market.

For those considering a purchase of a home in an expensive area like Los Altos Hills, Los Gatos/Monte Sereno, Saratoga, your time is getting closer! Be ready but I think we'll see list prices reduced and sale prices dropping as we get into the holiday season this year. Most years we experience more activity in the early spring and spring so the best time for a purchase is coming up soon!

> Investor's Corner -- Activity continues to trend upwards as more and more investors reenter the market. For Santa Clara County, there were 71 sales during the month with 52 of them in the less than $600,000 price range as that price range had a DUI of just 40 whereas the DUI for residential investment properties above $600,000 jumps to nearly a year. For investors able to purchase higher-priced properties, there is about one year of unsold inventory at current sales demand with at least some motivated sellers.

Robbing the Bank to Pay Back the Bank!

Tom McEvoy (RE/MAX Santa Clara Valley) — Fri, 25 Sep 2009 16:57:01 -0500

Wow, a 69-yr old robs San Diego bank to pay for his 17% mortgage! The authorities should round up the loan officer, strip him of his license, place him in the clink and throw away the key! Seniors beware -- a lot of crooks are after you (us!). Work with someone you know AND trust.

Click on the link to view the source newscast but we here in Silicon Valley were not insulated from some of these crooks in the real estate and lending business who looked out for themselves and didn't place their client's best interest first and foremost. Some loan officers, many working for unscrupulous mortgage brokers, placed unsophisticated and unsuspecting borrowers into weird loans with prepayment penalties and the like to earn huge fees at the expense of the borrowers.

Probably most of the borrowers that were trapped by these crooks were not seniors but I think it is even more egregious when a senior is the victim.

1111 S. Almaden Avenue, San Jose, CA 95110 -- Large, Move-in Condition, Feature-Rich Victorian Home

Tom McEvoy (RE/MAX Santa Clara Valley) — Tue, 15 Sep 2009 18:24:38 -0500

September Silicon Valley Real Estate Market Highlights

Tom McEvoy (RE/MAX Santa Clara Valley) — Wed, 09 Sep 2009 21:48:14 -0500

Here are my observations of August's transactions and market actions for Santa Clara, San Mateo, Santa Cruz, and Monterey counties. You are encouraged to leave your comments and questions or even update us on what you are witnessing in your neighborhood or area.

> Market continues showing improvment -- Market activity continues to display improvement, something that we've been saying for the past four months. For instance, in Santa Clara County, July saw a 38% increase in closings over the same month last year. My analysis of the transactional information reveals:

Buyers continue to trip over each other to submit offers for homes in the more affordable areas of Santa Clara, San Mateo, Santa Cruz, and Monterey counties. Many offers submitted are for all cash or have substantial down payments. There are still only 20 days of unsold inventory on single family residences in Santa Clara County with a price of under $450,000.
The supply of homes available for sale (inventory) continues to trend lower in each of the four counties without exception. The lower trend is more pronounced in Santa Clara and Monterey counties.
The number of closings have turned are now lower in each county as the seasonality takes hold as we see less closings in the late summer after a peak around Memorial Day.
The Days of Unsold Inventory (DUI) continues to improve generally in each county for single family residences and condos/townhouses, respectively. Santa Clara's DUI stands at 51 and 42, San Mateo's DUI is 74 and 70, Santa Cruz's DUI is 97 and 105 and Monterey's DUI is 65 and 80.

> Seller's Markets? -- Superheated Santa Clara County seller's markets are located in Santa Teresa, Blossom Valley, South San Jose, North Valley, Milpitas, East Valley, Santa Clara, Evergreen, Almaden Valley, Sunnyvale and Downtown San Jose. To refresh you, characteristics of a seller's market are shorter time on the market, fewer number of homes available for sale, higher probability of multiple offers with many sale prices exceeding list prices and a tendency towards price appreciation.

> Buyer's Markets? -- Far fewer than in the past, there are some buyer's markets located in Santa Clara County in Saratoga, Los Gatos and Los Gatos Mountains. To refresh you, characteristics of a buyer's market are longer time on the market, higher number of homes available for sale, lower probability of multiple offers or even an offer with most sale prices below list price. The tendency is to have price depreciation under this market condition.

Where do I get "Seller's" and "Buyer's" market information? This is not an opinion thing but a calculation I make using the number of homes for sale (supply) and the number of sales (demand) in the prior month which results in days of unsold inventory (DUI).

> Median prices. Up sharply since March but declined from $590,000 last month, it stands at $560,000 for Santa Clara County, $685,000 for San Mateo County. These are down 14% from the same month a year ago in each county. An entire county's median price level should not be used to decide on whether to buy or sell. I recommend your real estate advisor complete an analysis on a much smaller area (as small as a neighborhood!) to form the basis of a strategy.

> Tale of Two Markets -- Sales of affordable homes in Santa Clara County less than $450,000 level have gotten even hotter than the past few months. There are just 20 days of unsold inventory for single family residences below $450,000 and 39 for homes with prices from $450,000 to $600,000. As the price ranges increase, the DUI increases. For Santa Clara County, high-priced homes in the $2,500,000 to $5,000,000 range ended with a DUI of 359 or almost one year of inventory whereas in San Mateo County ended with a DUI of 222!

However, sales of higher-priced homes (above $1,000,000) are sluggish at best. For instance, we continue to have no sales of $5+ million homes in the last five weeks in Santa Clara County and just six in San Mateo County.

> Sellers Be Sooner -- I continue to maintain my recommendation for sellers of higher-priced homes that they should consider selling sooner and having an initially more-aggressive list price as the market usually softens when we go deeper into the late summer and into fall. In any case, check with a Realtor knowledgeable about the technical aspects of the market conditions to guide you in positioning your home for maximum activity and price while minimizing time on market. .

For those considering a purchase of a home in an expensive area like Los Altos Hills, Los Gatos/Monte Sereno, Saratoga, your time is getting closer! Be ready but I think we'll see list prices reduced and sale prices dropping as we get closer to the holiday season this year.

> Investor's Corner -- Activity continues to trend upwards as more and more investors reenter the market. For Santa Clara County, there were 71 sales during the month with 40 of them in the less than $600,000 price range as that price range had a DUI of just 59 whereas the DUI for residential investment properties above $1,000,000 showed more than one and a half years supply at current sales demand.

Thanks for reading Tom McEvoy's Blog -- what are your thoughts, comments, questions, observations?

August Silicon Valley Real Estate Market Highlights

Tom McEvoy (RE/MAX Santa Clara Valley) — Fri, 14 Aug 2009 14:58:33 -0500

Here are my observations of the most recent market actions for Santa Clara, San Mateo, Santa Cruz, and Monterey counties. You are encouraged to leave your comments and questions or even update us on what you are witnessing in your neighborhood or area.

> Market continues improving! Market activity continues to display improvement, something that we've been saying for the past four months. For instance, in Santa Clara County, July saw a 38% increase in closings over the same month last year. My analysis of the transactional information reveals:

Buyers continue to trip over each other to submit offers for homes in the more affordable areas of Santa Clara, San Mateo, Santa Cruz, and Monterey counties. Many offers submitted are for all cash or substantial down payments like 50%. There are only 20 days of unsold inventory on single family residences in Santa Clara County with a price of under $450,000.
The supply of homes available for sale (inventory) continues to trend lower in each of the four counties, except a flattening in Santa Cruz County. Normally, inventory is increasing at this time of the year. Lowered inventory and strong demand means HIGHER PRICES!
The number of initiated sales (in contract) have changed directions and heading lower as summer periods are normally less active in real estate. July initiated sales in Santa Clara County was still 18% higher than the same month a year ago.
The Days of Unsold Inventory (DUI) has generally improved (decreased) substantially in the last year in each county for single family residences. Santa Clara's DUI stands at 55 (47 for condos and townhouses), San Mateo's DUI is 75, Santa Cruz's DUI is 102 and Monterey's DUI is 64.
Median prices have increased in every county and is up 31% in Santa Clara County since March!

> Bank-owned and Short Sale Home Marketing -- Bank-owned homes are also called foreclosures or REO's for "real estate owned" (by a bank). Short sale homes are those still owned by the seller (not by the bank) but with the estimated proceeds of a sale not sufficient to cover the loan balance. For transactions with both types of homes, offers need the bank's approval. Now, the bank in each case has already lost money but their marketing has recently taken on a new look. They've given approval to the listing agents they hire to use an extremely low list price strategy to draw a huge number of offers and in a hurry too!.

Recently, I sold a bank-owned home in San Jose that generated 17 offers as my buyer's offer beat the other 16. As first time buyers who were pre-approved for an 80% loan, they are extremely pleased to be in contract. I employed my research on the fair market value of those in the same neighborhood to recommend an offer price range and my buyers accepted my recommendation.

> Seller's Markets? -- Yes! the hottest markets in Santa Clara County were Santa Teresa, South San Jose, Blossom Valley, North Valley, East Valley, Santa Clara, Cambrian, Evergreen, Milpitas and Downtown San Jose. To refresh you, characteristics of a seller's market are shorter marketing time, fewer number of homes available for sale, higher probability of multiple offers with many sale prices exceeding list prices and added price appreciation.

> Buyer's Markets? -- OK, yes, there are some of those too! Areas of Santa Clara County experiencing a buyer's market condition are: Mountain View, Los Altos, Palo Alto, Willow Glen in San Jose, Saratoga and Los Gatos. To refresh you, characteristics of a buyer's market are longer marketing time, higher number of homes available for sale, lower probability of multiple offers or even an offer with most sale prices below list price and price depreciation.

Where do I get "Seller's" and "Buyer's" market information? This is not an opinion thing but a calculation I make using the number of homes for sale (supply) and the number of sales (demand) which results in days of unsold inventory (DUI).

> Median prices. Up 31% since March to $590,000, Santa Clara County was at $450,000 as recently as March! This is down 18% from the same month a year ago. Less lower-priced homes in the mix of what sold last month and a corresponding higher portion of moderate homes and higher-priced homes was the main culprit. I do repeat, though, that an entire county's median price level should not be used as part of a strategy for buying or selling -- analysis must be done on a much smaller area as small as a neighborhood to form the basis of a strategy.

> Lost Wages and Other Things -- For this, "lost wages" affectionately refer to Las Vegas. Sales in Las Vegas in June 2009 were 44% higher than in June 2008 - a welcome sign. Median price was 41% lower than the same month a year ago. Comparable numbers for Portland were a 6% drop in sales and a 13% drop in median price. For Phoenix, the number of sales spurted by 40% but the median price was 37% lower than the same month a year ago.

> Tale of Two Markets -- Sales of affordable homes in Santa Clara County less than $450,000 level have gotten even hotter than the past few months. There are just 20 days of unsold inventory for single family residences below $450,000. There are more homes in sales pending status than available for sale! The DUI was 38 for those less than $600,000. Even with adjustments made for the portion of transactions that do not close escrow, these figures represent seller's markets with one characteristic being price appreciation.

However, sales of higher-priced homes are sluggish at best. For instance, we are back to having no sales of $5+ million homes in the last five weeks in Santa Clara County. Last month, there were 90 sales of homes with a list price of at least $1,000,000. Last month, the highest price home that sold was in Palo Alto with a list price of $3,700,000. Sunnyvale saw four such sales and Cupertino saw 13. For closings, there were 62 that closed escrow last month in the county, a higher number than in previous months which help increase the median price.

> Sellers Be Sooner -- I maintain my recommendation for sellers of higher-priced homes that they should consider selling sooner and having an initially more-aggressive list price as the market usually softens when we go deeper into summer. In any case, check with a Realtor knowledgeable about the technical aspects of the market conditions to guide you in positioning your home for maximum activity and price while minimizing time on market. There are more than ten months of unsold inventory in the $2.5 million to $5.0 million price range on the market in Santa Clara County.

For those considering a purchase of a home in an expensive area, your time is getting closer! Be ready but I think we'll see list prices reduced and sale prices dropping more before they are likely headed higher.

> Santa Clara County Foreclosure Ranking -- With all the "talk" about the amount of foreclosed homes in the county, here's a couple of things to think about. First, Sean O'Toole of ForeclosureRadar said recently that Santa Clara County ranks 45th among 54 counties in California in foreclosures per population. My yes, we have a lot of dwellings to house more than 1.6 million folks in the county as there are some 430,000 single family homes, condos and townhomes in the county according to the Santa Clara County Tax Assessor's office. Second, more than 30% of these have NO loan on them and are owned "free-and-clear" and have enjoyed their mortgage-burning parties. Of those that do have a loan, the rate of foreclosure based on the 591 homes that were foreclosed in the county in June would be about 2.25% or about one out of 44 homes.

> Investor's Corner -- Activity continues to trend upwards as more and more investors reenter the market. For Santa Clara County, there were 75 sale pending properties during the month with more than 50 of them in the less than $600,000 price range as that price range had a DUI of just 44, making it on the border between balanced and seller's market. Not so with higher priced multi unit properties.

Thanks for reading -- what are your thoughts, comments, questions?

July Silicon Valley Real Estate Market Update

Tom McEvoy (RE/MAX Santa Clara Valley) — Thu, 09 Jul 2009 23:56:13 -0500

Here are my observations of the most recent market actions for Santa Clara, San Mateo, Santa Cruz, and Monterey counties. You are encouraged to leave your comments and questions or even update us on what you are witnessing in your neighborhood or area.

> Market continues in turnaround mode! My recent posts have mentioned that the market activity is turning around. Well, June's activity continues the trend and provides more evidence that we could have seen the bottom! My analysis of the transaction information reveals:

Buyers are all but tripping over each other to submit offers for homes in the more affordable areas of Santa Clara, San Mateo, Santa Cruz, and Monterey counties.
The supply of homes available for sale (inventory) continues to trend lower in each of the four counties, except a slight uptick in Santa Cruz County. Normally, inventory is increasing at this time of the year. Lowered inventory and strong demand means HIGHER PRICES!
The number of initiated sales (in contract) have jumped in Santa Clara County and is trending higher in the other counties, too. Monterey County set a record in the number of closings!
The Days of Unsold Inventory (DUI) has improved (decreased) substantially in the last year in each county. Santa Clara's DUI stands at 56, San Mateo's DUI is 74, Santa Cruz's DUI is 92 and Monterey's DUI is 69.
Median prices have increased in every county.

> Bank-owned and Short Sale Home Marketing -- Bank-owned homes are also called foreclosures or REO's for "real estate owned" (by a bank). Short sale homes are those still owned by the seller (not by the bank) but with the estimated proceeds of a sale not sufficient to cover the loan balance. For transactions with both types of homes, offers need the bank's approval. Now, the bank in each case has already lost money but their marketing has recently taken on a new look. They've given approval to the listing agents they hire to use an extremely low list price strategy to draw a huge number of offers and in a hurry too!. One such case with a short sale listing, the listing agent received 175 offers! But, what did the home sell for? With a list price of $200,000, I estimated the home's fair market value range at $400,000 to $450,000. Sale price was $438,000. Yes, the come-on is too good to be true but please remember that list price doesn't mean anything in real estate.

> Seller's Markets? -- Yes! the hottest markets in Santa Clara County were Blossom Valley, Cambrian, North Valley and Milpitas. To refresh you, characteristics of a seller's market are shorter marketing time, fewer number of homes available for sale, higher probability of multiple offers with many sale prices exceeding list prices with added price appreciation.

> Buyer's Markets? -- OK, yes, there are some of those too! Areas of Santa Clara County experiencing a buyer's market condition are: Los Gatos, Saratoga and Willow Glen. To refresh you, characteristics of a buyer's market are longer marketing time, higher number of homes available for sale, lower probability of multiple offers or even an offer with most sale prices below list price with price depreciation.

Where do I get "Seller's" and "Buyer's" market information? This is not an opinion thing but a calculation I make using the number of homes for sale (supply) and the number of sales (demand) which results in days of unsold inventory (DUI).

> Median prices. Stuck at $450,000 for Santa Clara County these past few months, moved up to $470,000 in April increased yet again to $490,000. Where are we now? The June median price (the middle transaction) for Santa Clara County jumped to $550,250! This is down 26.6% from the same month a year ago. Less lower-priced homes in the mix of what sold last month was the main culprit along with a slight awakening of those higher priced home sales. I do repeat, though, that an entire county's median price level should not be used as part of a strategy for buying or selling.

> Tale of Two Markets -- Sales of affordable homes mainly in the less than $450,000 level have gotten even hotter than last month. There are just 27 days of unsold inventory for single family residences below $450,000; 36 for those less than $600,000. Even with adjustments made for the portion of transactions that do not close escrow, these figures represent seller's markets with one characteristic being price appreciation.

However, sales of higher-priced homes are sluggish at best. For instance, there have been no sales of $5+ million homes in the last five weeks in Santa Clara County. Last month, there were 87 sales of homes with a list price of at least $1,000,000 with the highest a home that sold in Monte Sereno with a list price of $3,485,000. For a twist, Sunnyvale saw seven such sales, the same as Palo Alto!

> Sellers Be Sooner -- I maintain my recommendation for sellers of higher-priced homes that they should consider selling sooner and having an initially more-aggressive list price as the market usually softens when we go deeper into summer. In any case, check with a Realtor knowledgeable about the technical aspects of the market conditions to guide you in positioning your home for maximum activity and price while minimizing time on market.

For those considering a purchase of a home in an expensive area, your time is getting closer! Be ready but I think we'll see list prices reduced and sale prices dropping more before they are likely headed higher.

> Investor's Corner -- Activity continues to trend upwards as more and more investors reenter the market. For instance, there were 46 closings in Santa Clara County, more than double the activity in the last few months. There were just 13 closings in San Mateo County, a much smaller market than Santa Clara County.

Thanks for reading -- what are your thoughts, comments, questions?

June Silicon Valley Real Estate Market Highlights

Tom McEvoy (RE/MAX Santa Clara Valley) — Mon, 15 Jun 2009 21:06:50 -0500

Here are my observations of the most recent market actions for Santa Clara, San Mateo, Santa Cruz, and Monterey counties. You are encouraged to leave your comments and questions or even update us on what you are witnessing in your neighborhood.

> Market continues in turnaround mode! My recent posts have mentioned that the market activity is turning around. Well, May's activity continues the trend and provides more evidence that we could have seen the bottom! How can this be?

Buyers are all but tripping over each other to submit offers for homes in the more affordable areas of Santa Clara, San Mateo, Santa Cruz, and Monterey counties.
The supply of homes available for sale (inventory) continues to decline in each of the four counties. Normally, inventory is increasing at this time of the year. Lowered inventory and strong demand means HIGHER PRICES!
The number of initiated sales (in contract) have jumped in Santa Clara County and is trending higher in the other counties, too.
The Days of Unsold Inventory (DUI) has improved (decreased) substantially. The DUI for single family residences in Santa Clara County for under $450,000 is an astonishing 26 which means when freezing inventory, ALL homes would sell in less than month!. Anything less than 45 represents a Seller's market with market characteristics of multiple offers, high percentage selling above list price AND, price APPRECIATION.
Median prices have increased in each county except for Monterey.

> 2 Hot 2 Handle? -- How's 20 offers on a single family residence? Or, 81 or even 99 offers? Yes, those are real numbers of offers received on three listings that I'm familiar with. I coach my buyers that list prices don't mean a thing, especially when the list price is way under the fair market value of the home. Research must be done to determine, as best as possible, the fair market value so that an intelligent offer can be submitted otherwise you're just spinning wheels. No seller whether a bank or not is going to sell for less than it's market value. So what we have now is that sales are extremely high but closings (close of escrows) are running at the third worst month in the last ten years!

> Bank-owned homes offer the best deals? -- First, that's a myth in general as banks are actually sophisticated sellers. They've already lost money and maintaining a listing costs them even more so they hire listing agents, who in many cases, set list prices at ridiculously low prices to spur activity AND multiple offers. This sets up in the minds of potential buyers that they can actually buy the home at or even under the list price. Invariably, the home sells for it's fair market value.

Second, prices have adjusted tremendously in many areas so are a lot less than they were at the peak in real estate pricing which differs in each area.

> Seller's Markets? -- Yes, there are! Areas of Santa Clara County experiencing a seller's market condition are: Blossom Valley (hottest market in Valley), South San Jose, East Valley (Alum Rock), Santa Teresa, Cambrian and Evergreen. To refresh you, characteristics of a seller's market are fewer days on market, lower number of homes available for sale, higher probability of multiple offers with many sale prices exceeding list prices and some added price appreciation.

> Buyer's Markets? -- OK, yes, there are some of those too! Areas of Santa Clara County experiencing a buyer's market condition are: Saratoga (coolest market in Santa Clara County), Los Gatos, Almaden Valley, Mountain View, Los Altos, Los Altos Hills, Palo Alto. To refresh you, characteristics of a buyer's market are longer days on market, higher number of homes available for sale, lower probability of multiple offers or even an offer with most sale prices below list price with general price depreciation.

> Sales per Day -- The amount of average sales per day in May reached 56.7 for Santa Clara County. The last time this figure was this high was in May 2005 when the market activity was nearing a crescendo! The only other May that had higher sales per day was in 2004 which was over 64. The big difference between 2004 and 2005 and May of 2009 was that many transactions this year did not close!

> Median prices. Stuck at $450,000 for Santa Clara County these past few months, moved up to $470,000 in April increased yet again to $490,000. Median prices (the middle transaction) for an entire county are actually worthless to use as part of a strategy for buying or selling. Each area, down even to the neighborhood, has differing dynamics of supply and demand so needs to be looked at accordingly. We've observed that market mix has helped bring down median prices due to more low-priced homes closing as a percentage of total closings. With more of the lower-priced home selling briskly there will be a lot less of them available and buyers will have to buy some higher priced ones.

> Tale of Two Markets -- Sales of affordably-priced homes mainly in the less than $450,000 level are HOT. On the other hand, sales of higher-priced homes are virtually dead, as some would say, in the more expensive areas. For instance, there have been no sales of $5+ million homes in the last five weeks in Santa Clara County.

So keep this in mind that if you are considering a sale in an expensive area, you probably want to sell quickly rather than waiting but in any case check with a Realtor knowledgeable about current market conditions to guide you in positioning your home for maximum activity and price while minimizing time on market. You really don't want to be on the market for a year or more.

And, if you are considering a purchase of a home in an expensive area, get ready to buy! Why, get ready? I think we'll see list prices reduced and sale prices dropping more before they are likely headed higher.

> Want to sell with multiple offers? The percent of completed sales or closings with a sold price greater than list price stands at 37.1%. This level, up a bit, means that fully one out of three sellers received more than their asking price. Oh, and another 8.1% of sellers received their full list price!

Want to hear a little secret? Some of those sellers receiving either their list price or something higher had to reduce their list prices to generate one or more offers. These figures don't calculate what the sale price to original list price ratio is but only what the current list price was at the time of sale.

> Loan Traffic Jam Lets Up! Last month, I mentioned that if you have applied to refinance your existing mortgage that lenders were clogged with loan applications. Well, what a difference a month of increasing mortgage rates makes. There's still a backlog but if you were trying to play the interest rate game and waiting for another 1/8th or 1/4 point drop, the mortgage rates shot up almost a full point!

Moral of this story is that if the current rate works (benefits you financially) then lock in the rate and close the loan!

> Investor's Reawaken Somewhat - A bit more activity in the multi-unit properties but wanted to mention that those properties with list prices less than $600,000 are seeing much more activity. The days of unsold inventory (DUI) for this type of property in this level has dropped to 54 versus an improved 122 overall.

Thanks for reading -- what are your thoughts and comments?

May Silicon Valley Real Estate Market Highlights

Tom McEvoy (RE/MAX Santa Clara Valley) — Thu, 14 May 2009 15:56:13 -0500

Here are my observations of the most recent market actions for Santa Clara, San Mateo, Santa Cruz, and Monterey counties. You are encouraged to leave your comments and questions or even update us on what you are witnessing in your neighborhood.

> Market is in turnaround mode! My recent posts have mentioned that the market activity is turning around. Well, April's activity continues to provide more evidence that we could have seen the bottom! How can this be?

Buyers are all but tripping over each other to submit offers for homes in the more affordable areas of Santa Clara, San Mateo, Santa Cruz, and Monterey counties.
In Santa Clara County, there have been only four months in the past ten years where we've seen as many or more homes sold!
The number of initiated AND completed sales or closings are trending upwards in Santa Clara, San Mateo and Monterey counties. Only Santa Cruz County has relatively-flat transactions. Monterey County continues setting records.
The Days of Unsold Inventory (DUI) has improved (decreased) substantially. The DUI for single family residences in Santa Clara County for under $450,000 is an astonishing 28 which means when freezing inventory, ALL homes would sell in a month!. Anything less than 45 represents a Seller's market with market characteristics of multiple offers, high percentage selling above list price AND, price APPRECIATION.
Median prices have increased in all four counties.

> Seller's Markets? -- Yes, there are! Areas of Santa Clara County experiencing a seller's market condition are: Milpitas (hottest market in Valley) East Valley (Alum Rock), North Valley, South San Jose, Santa Teresa, Blossom Valley. To refresh you, characteristics of a seller's market are fewer days on market, lower number of homes available for sale, higher probability of multiple offers with many sale prices exceeding list prices and price appreciation.

> Buyer's Markets? -- OK, yes, there are some of those too! Areas of Santa Clara County experiencing a buyer's market condition are: Mountain View, Los Altos, Los Altos Hills, Palo Alto, Willow Glen Los Gatos, Los Gatos Mountains, Saratoga (coolest market in Valley). To refresh you, characteristics of a buyer's market are longer days on market, higher number of homes available for sale, lower probability of multiple offers with most sale prices below list prices and price depreciation.

> Mortgage Refinance Tips -- Some of you may know that I used to "do" mortgage loans and advised my clients on a couple of handy "rule-of-thumbs" as quick indicators to see if refinancing would be a financial benefit to the borrowers, not the loan officer!

First, the rate should be more than 10% difference, obviously lower, than your current rate. That means if your currently at 5.50%, the new rate should have a rate at least 10% under this or 4.95%. (For the math, you'd subtract 10% of 5.50 or 0.55 from 5.50 to equal 4.95%.) A rate lower than this level should benefit you and amortize the costs (no free lunch!) of the loan so you can more quickly start accruing the savings AFTER the cost of doing the loan, AND
Second, it matters most how long you plan on keeping the LOAN. If you plan a sale in a year or so, it probably does NOT make financial sense to refinance.

Finally, just about everyone knows that rates bounce all over the place so that a quote you receive one day or spot on the Internet is probably gone the next. The only way you can guarantee a rate is to "lock" it in and that takes an application and commitment to a loan officer not 50 inquiries over the Internet. Need a referral to a trusted loan professional? Please contact me.

> Sales per Day -- The amount of average sales per day in April reached 55.5 for Santa Clara County. The last time this figure was this high was in April 2005 when the market activity was nearing a crescendo! Inventory or the amount of available single family residences for sale has dropped 33% from the levels of April 2008. Normally, inventory levels trend higher this time of year but has been going the other way. This shows a "tightening" market and a swing toward a seller's market in many areas.

> Foreclosures up and NOD's down - How can that be? -- Recently, the San Jose Mercury News reported that the number of foreclosures rose but the number of Notice of Defaults (NOD's) issued have dropped. Remember, the moratoriums placed on banks during the holiday months? Well, there have been moratoriums in place for six of the past eight months. With those moratoriums relaxed, banks are back to foreclosing. Another artificial barrier has been the state of California where they will institute a lengthening of the process so banks have to wait about seven months instead of the current four. These governmental barriers actually prolong the pain as well as exacerbate the problems of separating those that can't make consistent mortgage payments with those who can. For current homeowners wishing to trade up or trade down, the impact on values in many neighborhoods continue.

> Median prices. Stuck at $450,000 for Santa Clara County these past few months, moved up to $470,000 in April. Median prices (the middle transaction) for an entire county are actually worthless to use as part of a strategy for buying or selling. Each area, down even to the neighborhood, has differing dynamics of supply and demand so needs to be looked at accordingly. We've observed that market mix has helped bring down median prices due to more low-priced homes closing as a percentage of total closings. We have also seen the opposite occur in 2007 when higher-priced homes sold and the lower-priced homes were engulfed with the sub-prime loan issues and didn't sell as frequently.

> Some are Hot, Some are Not -- Sales of affordably-priced homes mainly in the less than $450,000 level are HOT. On the other hand, sales of higher-priced homes are virtually dead, as some would say, in the more expensive areas. If you are considering a sale in an expensive area, you probably want to sell quickly rather than waiting but in any case check with a Realtor knowledgeable about current market conditions to guide you in positioning your home for maximum activity and price while minimizing time on market. And, if you are considering a purchase of a home in an expensive area, get ready to buy! Why, get ready? I think we'll see list prices reduced and sale prices dropping more.

> Want to sell with multiple offers? The percent of completed sales or closings with a sold price greater than list price stands at 33.4%. This level, back up a bit, means that fully one out of three sellers received more than their asking price. Oh, and another 7.7% of sellers received their full list price!

Want to hear a little secret? Some of those sellers receiving either their list price or something higher had to reduce their list prices to generate one or more offers. These figures don't calculate what the sale price to original list price ratio is but only what the current list price was at the time of sale.

> Traffic Jam! If your GPS unit has live traffic updates, it still won't be able to help with those lenders who are clogged with loan applications. With the lowest mortgage rates since the '60's continuing, the demand by borrowers trying to refinance has created an avalanche of work for the lenders. Things to remember are:

First, rates for refinance loans average about 1/4 point higher than similar program purchase loans.
Second, the process can take as much as 60-90 days as purchase loans get first priority due to the impending event of close of escrow.
Third, there's no cash-out refi's as that option effectively disappeared.

> Investor's Reawaken - We've mentioned that investors have not been doing much lately with multi-unit residential properties. A couple of reasons are more stringent loan application and increased down payment requirements lenders have imposed. But, there are now 83 investor properties in escrow in Santa Clara County -- much higher than in recent months. The days of unsold inventory (DUI) for this type of property has dropped to 148 from more than triple current levels. Two-thirds of the activity is in the less than $600,000 price range.

Thanks for reading -- what are your thoughts and comments?

April Silicon Valley Real Estate Market Highlights

Tom McEvoy (RE/MAX Santa Clara Valley) — Thu, 09 Apr 2009 21:27:02 -0500

Here are my observations of the most 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.

> Market turnaround? Remember I've said recently that the market activity is turning around? Well, March's activity has shown me more evidence that we could have seen the bottom! How can this be?

Buyers are willing to make offers as initiated sales (accepted offers) are up in Santa Clara, Santa Cruz, San Mateo and Monterey counties.
This isn't Thanksgiving but even the "turkeys" are selling. I've been caught using the term "turkeys" to denote an overpriced home. Some of these homes have been on the market for more than a year and may be located on an extremely busy street. Also, the median days on market, DOM, for those homes available for sale has dropped from 100 in January to 70 in March. Tells me that Thanksgiving is getting closer!
The number of initiated AND completed sales or closings are trending upwards in each county. Part of that is seasonal but part has to be market improvement. Levels are not quite breaking records, except in Monterey.
The Days of Unsold Inventory (DUI) has improved (decreased) substantially. The DUI for single family residences in Santa Clara County for under $450,000 is 42 which means freezing inventory, ALL homes would sell in 42 days. Anything less than 45 represents a Buyer's market! Characteristics of a buyers market is multiple offers, substantial percentage selling above list price AND, get this, price APPRECIATION.

> Myth Buster! "Lenders are not lending" -- Pure and simple, this is a myth cooked up to make bankers look even worse. Now, I don't have stock in any bank but these are the facts. After paring staff, lenders are flooded with applications for refinances now with mortgage rates in the mid-4% range. In addition, purchasers need loans, too. This huge sea change in demand for loans has caused lenders to push out the time necessary to complete refinances from 30 days to a range of 60-90 days. Purchase loans have an impending event tied to a close of escrow so these loans are given preferential treatment because of that. Those refinancing will have to be patient to begin to see savings.

> Mortgage Refinance Tips -- Some of you may know that I used to "do" mortgage loans and advised my clients on a couple of handy "rule-of-thumbs" as quick indicators to see if refinancing would be a financial benefit to the borrowers, not the loan officer!

First, the rate should be more than 10% difference, obviously lower, than your current rate. That means if your currently at 5.50%, the new rate should have a rate at least 10% under this or 4.95%. (For the math wizzes, you'd subtract 10% of 5.50 or 0.55 from 5.50 to equal 4.95%.) A rate lower than this level should benefit you and amortize the costs of the loan so you can more quickly start accruing the savings AFTER the cost of doing the loan, AND
Second, it matters most how long you plan on keeping the LOAN. If you plan a sale in a year or so, it probably does NOT make financial sense to refinance.

Finally, just about everyone knows that rates bounce all over the place so that a quote you receive one day is probably gone the next. The only way you can guarantee a rate is to "lock" it in and that takes an application and commitment to a loan officer not 50 inquiries over the internet. Need a referral to a trusted loan professional? Please contact me.

> Use Zillow.com? If you check out www.zillow.com for estimates of market value in an area, there are couple of potential pitfalls you should be aware of. First, be careful that the size of the home you're looking at compared to the average size in that area. If the home you are curious about is similar to the average sized home, the market estimate may be a reasonable start. If it is much larger or smaller, I've noticed a much larger departure from market value. Not every home sells each month, right? Second, believe it or not, zillow doesn't "see" into homes. They don't have a clue if you have hardwood floors, sloping floors, no floors, granite countertops or whatever. Their proprietary formula (only known by them) is in use and they apply it across all the homes in the area.

Some who used to trade stocks now think that real esate can be "quoted" in the same fashion. Hardly. Who can discern differences? Your friendly Realtor who stays on top of market changing conditions!

> Condos catching up with single family residences -- A couple of months ago, we witnessed the increase in sales of single family homes far exceeding the increase in sales of condos. Remember, I mentioned that there were better deals in condos and townhouses due to the improved affordability (read -- lower prices) of single family residences? Well, this is beginning to turn. Condo and townhouse closings were up 27% from March 2008 to March 2009, while the increase in closings of single family homes was 24%.

> Median prices. Stuck at $450,000 for Santa Clara County these past few months, median prices (middle transaction) for an entire county are worthless. "Warm to the touch" you might say when touching someone in the middle who is freezing on one side and boiling on the other. Each area, down even to the neighborhood, has differing dynamics of supply and demand so needs to be looked at accordingly. We've observed that market mix has helped bring down median prices due to more low-priced homes closing as a percentage of total closings. We have also seen the opposite occur in 2007 when higher-priced homes sold and the lower-priced homes were starting with the sub-prime loan issues and didn't sell as frequently.

> $5,000,000+ home buyers waking up? Sales of these higher-priced homes were virtually non-existent recently but that has changed. In the past month, four homes in Santa Clara County and three homes in San Mateo County have sold and are in escrow! Any interest? If so, you have plenty to choose from as the number of available homes for sale in this price range is 37 in Santa Clara County and 48 in San Mateo County.

> Want to sell with multiple offers? The percent of completed sales or closings with a sold price greater than list price stands at 31.0%. This level, down a bit, means that about one out of three sellers received more than their asking price. Oh, and 11.3% of sellers received their list price!

Want to hear a little secret? Some of those sellers receiving either their list price or something higher had to reduce their list prices to generate one or more offers. These figures don't calculate what the sale price to original list price ratio is but only what the current list price was at the time of sale.

> Traffic Jam! With the lowest mortgage rates since the '60's, the demand by borrowers trying to refinance have created an avalanche of work for the lenders. Yes, this is after they laid-off staff! First, rates for refinance loans average about 1/4 point higher than similar program purchase loans. Second, the process can take as much as 60-90 days! Third, there's no cash-out refi's as that option dissapeared.

> Investor's Corner - We've mentioned that investors have not been doing much lately with multi-unit residential properties. A couple of reasons are more stringent loan application and increased down payment requirements lenders have imposed. The other reason is, quite frankly, a less than optimistic outlook that many investors have. Closings have been enemic: 23 in Santa Clara County; and, 11 in San Mateo County. Most, about 80%, of the activity is in the less than $600,000 price range.

> Go, Monterey, go! Still setting records, Monterey County has seen record-breaking numbers of initiated sales (accepted contracts) and closings and even continues to out sell San Mateo County which is a larger market historically. As you might have guessed, 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 of homes, especially along the 101 corridor. 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 and lenders who are lending!

Thanks for reading -- what are your thoughts?

March Silicon Valley Real Estate Market Highlights

Tom McEvoy (RE/MAX Santa Clara Valley) — Wed, 11 Mar 2009 22:36:05 -0500

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?

World class chocolates in the Valley of Hearts Delight

Tom McEvoy (RE/MAX Santa Clara Valley) — Fri, 13 Feb 2009 11:54:30 -0600

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

710 Blossom Hill Road, Los Gatos. 408-356-2626

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

Richard Donnelly Chocolates

1509 Mission Street, Santa Cruz. 888-685-1871

Saratoga Chocolates

14572-B Big Basin Way, Saratoga. 408-872-1431

Schurra's Fine Confections

840 The Alameda, San Jose. 408-289-1562

Shokolaat

516 University Avenue, Palo Alto. 650-289-0719

Sugar Butter Flour

669 S. Bernardo Avenue, Sunnyvale. 408-732-8597

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?

February Silicon Valley Real Estate Market Highlights

Tom McEvoy (RE/MAX Santa Clara Valley) — Thu, 12 Feb 2009 22:44:16 -0600

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?

Got Granite? Got Radon?

Tom McEvoy (RE/MAX Santa Clara Valley) — Tue, 27 Jan 2009 19:00:24 -0600

Just in time for January, I learn that this month is Radon Action Month. Governor Schwarzenegger has urged all Californians to test their home for radon gas. Why this month? The coldest months, when people keep their homes buttoned up, are when indoor radon concentrations are highest. Here in Santa Clara County, we have a county-wide average of "moderate" levels of radon but they can vary tremendously by area and depending upon the types of granite counter tops that may be in the home.

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!

Lunar New Year Events 2009

Tom McEvoy (RE/MAX Santa Clara Valley) — Sat, 24 Jan 2009 14:11:58 -0600

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!

Real Eats -- La Paloma Restaurante, Santa Clara, CA

Tom McEvoy (RE/MAX Santa Clara Valley) — Tue, 20 Jan 2009 12:43:09 -0600

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!

January Silicon Valley Real Estate Market Tidbits

Tom McEvoy (RE/MAX Santa Clara Valley) — Mon, 19 Jan 2009 12:59:09 -0600

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?

Beware the Median Price Deception

Tom McEvoy (RE/MAX Santa Clara Valley) — Sat, 17 Jan 2009 22:52:00 -0600

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!

January Silicon Valley Real Estate Market Update

Tom McEvoy (RE/MAX Santa Clara Valley) — Sat, 17 Jan 2009 01:33:18 -0600

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!

December Silicon Valley Real Estate Market Update

Tom McEvoy (RE/MAX Santa Clara Valley) — Thu, 11 Dec 2008 17:28:40 -0600

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!

Silicon Valley Community Calendar -- December

Tom McEvoy (RE/MAX Santa Clara Valley) — Tue, 25 Nov 2008 13:36:22 -0600

Here is an update to some of the events and on-going programs you might want to put on your calendar for December. Most of these are selections from Sunnyvale and Cupertino but other communities in Silicon Valley may be included (e.g., Mountain View, Santa Clara, Palo Alto).

•December 1-6: California Theater Center presents – “The Elves and the Shoemaker”, 408-245-2978 or www.ctcinc.org
•December 1: Board of Library Sunnyvale Trustee’s Meeting, 7pm
•December 2, 9, 16: Sunnyvale City Council Meeting, 7pm
•December 2: Oregon Shakespeare Festival, Sunnyvale Public Library, 7pm
•December 3, 10, 17: Kiwanis Club of Silicon Valley, 7:20am, 408-774-0609
•December 3: American Association of Retired Persons (AARP), monthly meeting, 1:30pm, 408-296-3805
•December 3: Silicon Valley Toastmasters, 5pm
•December 4: Sunnyvale Community Services Auction, 725 Kifer Road, 5pm, 408-738-4321 -- Please call for more information or to donate in time for the auctions that benefit those less fortunate than us.
•December 4: SNAIL Neighborhood Association, monthly, 7pm
•December 5: Holiday Luncheon, Senior Center, 550 E. Remington Drive, $11 for members, $13 for non-members, 408-730-7360, Noon – 1pm
•December 5: Heritage District Neighborhood Association Monthly Meeting, 7pm
•December 6, 13, 20, 27: Farmers Market, 510-745-7100
•December 7, 14, 21, 28: Fair Oaks Toastmasters, 11:30am
•December 8-20: California Theater Center presents – “Madeline’s Christmas”, 408-245-2978 or www.ctcinc.org
•December 8: San Miguel Neighbors Association, General Meeting, 7pm
•December 8, 22: Sunnyvale Planning Commission Meeting, 8pm
•December 10: Sunnyvale Parks and Recreation Commission Meeting, 7pm
•December 10: Lakewood Village Neighborhood Association, monthly, 7pm
•December 13: Breakfast with Santa, Senior Center, 8-10am or 11am-1pm, 408-730-7360
•December 13: An Evening of Cultural Arts presents “Kugelplex – Klezmers Coming to Town”, 8pm, 408-733-6611
•December 15: Personnel Board Meeting, Sunnyvale, 5pm
•December 17: Arts Commission Meeting, 7pm
•December 18: Sunnyvale Bicycle & Pedestrian Advisory Commission Meeting, 6:30pm

•Mondays, Wednesdays, Fridays: Computer and E-Waste Recycling, 8:00am-4:30pm, Cupertino proof of residency
•Every Wednesday: Silicon Valley Toastmasters, 5pm, 260 S. Sunnyvale Avenue, Suite 4, Sunnyvale, 866-387-4086
•Every Saturday: Family Astronomy Evenings, De Anza College Planetarium, 6:00pm, 7:00pm or 8:00pm, Cupertino
•Every Second Monday of Month: Fine Arts League of Cupertino, Quinlan Community Center, 7:00pm

Thanks for reading!

Cost vs. Value Report - 2008

Tom McEvoy (RE/MAX Santa Clara Valley) — Tue, 25 Nov 2008 12:48:41 -0600

Remodeling Magazine, published by Hanley-Wood, LLC, Washington, D.C., has been publishing the "Cost vs. Value Report" annually for more than twenty years. The 2008 version compiles information for 79 markets, (up from 64 in past years) on 29 upscale and midrange home improvement projects estimated by HomeTech Information Systems (www.hometechonline.com), which publishes estimating software for professional remodelers.

What do the latest numbers have to say? Home prices have fallen from the summer of 2007 to the summer of 2008 (Cost vs. Value information complied during each summer) but that the value of improvements have fallen less which means that improvements continue to add incremental value. The national average percentage that homeowners can expect to recoup was 67.3% versus the high reached in 2005 of 86.7%. Higher cost estimates for projects coupled with lower resale prices have tipped the percentages to below 100% with minor exceptions. What I noticed in going through the report, with few exceptions, was that the percentage of cost recouped on upscale additions and remodels were generally lower than midrange additions and remodels. This stands to reason as many upscale remodels are not undertaken using an investment return mentality.

Repeated this year is an online source (requires registration) for free city reports. If interested, go to www.costvsvalue.com. A map on the site shows cost comparisons by region.

Here are samples of 2008 midrange projects for the Pacific Region along with its average percentage of cost recouped:

* Bathroom addition - 76%
* Deck addition (wood) - 97%
* Family room addition - 75%
* Master Suite addition - 74%
* Bathroom remodel - 76%
* Home office remodel - 65%
* Major kitchen remodel - 87%
* Minor kitchen remodel - 96% (one of the projects I have advised clients to consider)
* Roof replacement - 79% (may be needed for buyers to obtain fire insurance coverage)
* Siding replacement - 84%
* Windows replacement (vinyl) - 94%

Hope this information is of help to you as you decide on remodeling projects to either enhance the value of your home for immediate reselling or to enjoy the lifestyle benefits of the improvements and have no plans to sell. Please remember that not all remodeling projects will result in higher resale values. Many folks think that someone will want to pay $100,000 more for their remodeled home that costs them $50,000 to complete. Perhaps, but it depends upon on the project, the neighborhood, the likely market conditions upon completion, and other factors. If you are considering remodeling for a sale or just want to see what projects may cost and understand the process, I recommend reading the book "Remodel or Move?" by Dan Fritschen. His website at www.remodelormove.com has a remodel or move calculator to help you with your decision.

For more information and to view the entire Cost vs. Value Report online, please visit www.realtor.org/realtormag. If you want a professional opinion of how the market will react to your proposed project and as a way to save time, money and hassle, please contact me. I would provide you a market assessment of your contemplated remodeling project and if you want, a referral to a licensed trades-person who can provide free estimates or just to talk it over as you firm up your plans, please let me know. I would do this whether or not you would be doing the project for resale as I work exclusively by referral so regularly provide referrals to my clients to help them maintain or improve their homes. By the way, the only thing I get for a referral of this type is the satisfaction that you will be well-cared for by a licensed professional.

Thanks for reading!

November Silicon Valley Real Estate Market Update

Tom McEvoy (RE/MAX Santa Clara Valley) — Fri, 14 Nov 2008 13:11:06 -0600

This information summary and analysis uses MLS Listings Inc. (MLS) transactional data for October 2008. For single family homes in Santa Clara County, October saw an increase in closings of 41% from October 2007; closings of condos/townhouses saw an increase of 20% in the same period. There were 809 closings in the month with 1,073 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 County by 26%.

Inventory of available single family homes in Santa Clara County was 4,988, up a few from last month but up 5% from the same month last year. San Mateo County inventory increased by one to 1,654, but dropped 1% from October 2007. In Santa Cruz County, inventory trend has been slowly decreasing. Monterey County shows a steady trend 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 140 for single family residences and 163 for condos/townhouses, modest increases from last month. San Mateo County is at 142 and 167, respectively. Santa Cruz County has a DUI reading of 193 and 172, respectively. Monterey County showed DUI at 135 and 197, respectively, and now sports the best DUI for single family homes of the four counties. 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 articles are so general as to not be of use to an individual making a decision on a home 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.

The median price for single family homes in Santa Clara County was $550,000, down 36.2% from $861,500 the same month a year ago and down 31.2% from the December 2007 reading of $799,000. These sudden changes in the median prices from month to month show that there are many more lower-priced homes that closed, thus causing the drop in median and the mix of homes shifted from the higher-priced homes to the more affordable homes. Recently, the stock market crash has caused a major pause in the real estate market but only in the higher priced areas. The more affordable priced areas haven't been affected. The bottom 10% median selling price (10th percentile) was $329,600 in October and showed a decline of 44.6% from the same month a year ago and the top 10% median price (90th percentile) was $1,200,000, saw a drop of 31.2% from October 2007.

The price range with the lowest DUI reading we call the "sweet-spot" of the market for single family homes. For October, it was the $450,000 and under range with a DUI reading of 84. Next comes the $450,000 to $600,000 range with a DUI reading of 121. For condo/townhouses the picture looks similar with the sweet-spot being the $300,000 and under range with a DUI reading of 105.

For real estate investment buyers, the DUI for residential investment property has dramatically decreased and in now at 259 versus 316 last month. This means under the current rate of sales of multi-unit properties, there is about 8.5 months of unsold supply versus 11 last month! This remains a prime period for negotiation with a buyer whit 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 with either "brag" cards or "spray and pray" cards. 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. With the credit situation we're experiencing, banks will be more aggressive in approving loan modifications which will slow down foreclosure activity. 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!

October Silicon Valley Real Estate Market Update

Tom McEvoy (RE/MAX Santa Clara Valley) — Thu, 09 Oct 2008 13:01:28 -0500

This information summary and analysis uses MLS Listings Inc. (MLS) transactional data for September 2008. For single family homes in Santa Clara County, September saw an increase in closings of 73% from September 2007. There were 899 closings in the month with 1286 initiated sales (accepted offers) that indicates that closings in October will likely remain at about the same level as not all accepted offers close escrow. Closings increased also in San Mateo County by 9% and Santa Cruz County of 64%. In Monterey, closings were 308, 250% higher than September 2007.

Inventory of available single family homes in Santa Clara County was 4,981, down from last month but up from the same month last year. San Mateo County inventory increased a bit to 1,653, but dropped slighted from September 2007. In Santa Cruz County, inventory decreased from last month and also from the same month last year. Monterey County shows a lower inventory than last month as well as lower than September 2007.

Days of Unsold Inventory (DUI) or the intersection of the inventory (supply) with the recent sales level (demand), shows Santa Clara County at 121 for single family residences and 135 for condos/townhouses, a slight drop from last month. San Mateo County is at 112 and 129, respectively. Santa Cruz County has a DUI reading of 167 and 141, respectively. Monterey County showed DUI at 124 and 202, respectively. Please remember that a lower figure is good here and that a declining measure represents an improvement in the market. 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. 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. 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.

The median price for single family homes in Santa Clara County was $600,000, down 29.4% from $850,000 the same month a year ago and down 24.9% from the December 2007 reading of $799,000. A sudden change in the market shows that there are many more lower-priced homes that closed, thus causing the drop in median and the mix of homes shifted from the higher-priced homes to the more affordable homes. The bottom 10% median selling price (10th percentile) was $330,000 in September and showed a decline of 46.3% from the same month a year ago and the top 10% median price (90th percentile) was $1,331,869, saw a drop of 20.6% from September 2007.

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

Potential real estate investment buyers take heed: the DUI for residential investment property is at 316. This means under the current rate of sales of multi-unit properties, there is about 11 months of unsold supply! Better opportunity to negotiate. As mentioned last month, 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 and part company from most other real estate agents. Most other agents spend the bulk of their time working on self-promotion ads for newspapers, magazines and stuff that fill your mailbox with either "brag" cards or "spray and pray" cards. 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.

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

Thanks for reading!

September Silicon Valley Real Estate Market Update

Tom McEvoy (RE/MAX Santa Clara Valley) — Thu, 11 Sep 2008 15:23:29 -0500

This information summary and analysis uses MLS Listings Inc. (MLS) transactional data for August 2008. For single family homes in Santa Clara County, August saw an increase in closings of 33% from August 2007. There were 1,044 closings in the month with 1,260 initiated sales (accepted offers) that indicates that closings in September will likely remain at about the same level as not all accepted offers close escrow. However, closings of condos and townhouses decreased by 14% from the same month last year.

Inventory of available single family homes in Santa Clara County was 5,166, down from 5,368 last month but up 14% from August 2007. San Mateo County inventory decreased to 1,542, 6% higher than the same month a year ago. San Mateo and Monterey counties have seen a similar downtrend in available single family homes whereas inventory in Santa Cruz County has been flat these past five months.

Days of Unsold Inventory (DUI) or the intersection of the inventory (supply) with the recent sales level (demand), shows Santa Clara County at 125, down from 131 last month and compares favorably to the 210 figure for August 2007. San Mateo County is at 112, up from 105 last month. Santa Cruz County has a DUI reading of 165, down slightly 169. Monterey County showed DUI at 122, down from 136 last month. Please remember that a lower figure is good here and that a declining measure represents an improvement in the market. 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. 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 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, Sunnyvale has the best market climate in the county with a DUI reading of 51, representing a balanced market while Los Gatos has the worst reading of 170 (actually, Los Gatos Mountains is higher at 270). The following table is a ranking of Santa Clara County cities or areas with their current DUI readings compared to last month's calculation as well as my notations as to the type of market the area is in (seller's, balanced or buyer's) and the recent direction of change in this indicator. Even though there are a lot of "better" notations made, many of 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.

Sunnyvale 51 55 Balanced/BETTER
North Valley 63 68 Balanced/BETTER
Milpitas 63 65 Balanced/BETTER
Blossom Valley 64 68 Balanced/BETTER
Cambrian 76 69 Balanced/WORSE
Cupertino 79 57 Balanced/WORSE
South San Jose 82 90 Balanced/BETTER
East Valley 82 92 Balanced/BETTER
Santa Teresa 90 74 Balanced/WORSE
MtView/LA/PA 93 77 Buyer’s/WORSE
Downtown SJ 93 106 Buyer's/BETTER
Santa Clara 94 97 Buyer's/BETTER
Evergreen 96 106 Buyer's/BETTER
Campbell 102 96 Buyer's/WORSE
M Hill/Gilroy 143 141 Buyer's/WORSE
Almaden Valley 144 139 Buyer's/WORSE
Willow Glen 146 145 Buyer's/WORSE
Los Gatos 170 211 Buyer's/BETTER
Saratoga 166 130 Buyer's/WORSE
LG Mountains 270 359 Buyer's/BETTER

The median price for single family homes in Santa Clara County was $648,500, down 24.6% from $860,000 the same month a year ago and down 18.8% from the December 2007 reading of $799,000. A sudden change in the market shows that there are many more lower-priced homes that closed, thus causing the drop in median and the mix of homes shifted from the higher-priced homes to the more affordable homes. Lower-priced homes account for one-third of the market -- a significant increase in the percentage this price range occupied of the market in recent months. The bottom 10% median selling price (10th percentile) was $355,270 in August and showed a decline of 43.1% from the same month a year ago and the top 10% median price (90th percentile) was $1,513,500, saw only a drop of 16.7% from August 2007's record high of $1,816,000. The northwest quadrant of the county including Palo Alto, Mountain View, Los Altos, Cupertino and parts of Sunnyvale (zip 94086 and 94087) have seen price appreciation and are at their all time highs while county-wide medians are down. With few exceptions, the single family home markets become weaker when you cross Lawrence Expressway heading east.

The price range with the lowest DUI reading we call the "sweet-spot" of the market for single family homes. For August, it remains at the $450,000 and under range. It's DUI reading is 87. Next comes the $450,000 to $600,000 range with a DUI reading of 127.

Potential real estate investment buyers take heed: the DUI for residential investment property is at 324, down from 502 and a huge improvement from last month. This means under the current rate of sales of multi-unit properties, there are about 0.90 years of unsold supply! As previously mentioned, 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. Rental vacancies are relatively low and dropping and we see strong increases in rental rates continue. 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. 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 one area I part company from most other real estate agents as only a relative handful of agents invest the time to study the trends. Most other agents spend the bulk of their time working on self-promotion ads for newspapers, magazines and stuff that fill your mailbox with either "brag" cards or "spray and pray" cards. 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 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!