Christmas Eve

"Not a creature is stirring," and the sky is clear here in Northern California.
The recent economic news is looking more promising. This morning's Mercury News predicted that Real Estate values would remain at least stable in the coming year.
This is a quiet weekend's pause before a week full of preparing a new listing for sale. The painting, carpeting, and gardening are complete, and the termite inspector crawled under the house and emerged with the good news that there was no infestation.
Next week's schedule is full of the remainder of the work: house and window cleaners on Monday, stager on Tuesday, and then I will meet my videographer on Wednesday or Thursday, depending on the weather report. Right after New Years, this buyer-ready property will be on the MLS. I'm happy that I took my vacation trip early this year!

Too Long Away

I'm back from my annual trip to visit my sister and her family in Florida. The nighttime temperature was 28 degrees when I left West Palm Beach, so there was no shock when I had to scrape frost off my car windows this morning before leaving for the Realtors' meeting. My son and his wife will notice much more contrast when they return to Michigan from their vacation in Hawaii.
In my sales area (Sunnyvale and Cupertino) we get a weekly list of recent home sales published in the Mercury News. The recent sales price is almost always higher than the last selling price. In the Real Estate section of the Palm Beach Post, the situation is reversed. Invariably, the new sales are dramatically lower in price than the same property's sale price of a few years ago. For example, a five year old condo that sold for $592,600 in 2005, now sold for $220,000. A single family house, built in 1996, sold in 2008 for $665,000 and resold recently for $113,800.
Even more frightening, the property tax on a $430,000 condo there is more than $10,000 a year! I'm glad to be back in Northern California.

Working and the Holidays

With Thanksgiving rapidly approaching and the December holidays around the corner...or already here, if you believe the newspaper ads...Realtors and their clients are planning for vacations, family visits, and lots of shopping, decorating and cooking.
We are also working on plans to start off an exciting real estate sales year in the Bay area. The purchase of the Cashin Company by Coldwell Banker is an indicator of the optimism we're seeing in our offices. There are signs that 2011 will be a stronger year than any in recent history. Maybe I'm being overly optimistic, but I'm not basing my opinion on positive vibrations alone. I've had more contacts from past clients, referrals, and homeowners in my "farm" area recently than in the past several years. It's about time.

Real Estate Agents are Aging

A close friend and associate is retiring next year...at age 83!
Many fellow Realtors are in their 60's and 70's, and a recent speaker at the Council of MLS Services reminded us that the average age of real estate agents is over 50, and that in 2010, the number of agents over 40 exceeds those under 40, two to one.
The older agent brings a lot to the table: years of experience in the field, understanding the market, and most importantly, good old fashioned customer service.
However, very few are able to continue doing business in today's market and competing with tech-savvy younger agents without adopting the new technologies.
This is especially true for those of us working here in Silicon Valley, where we are surrounded by social media, the Internet blogosphere, and other technology.
But the non-tech basics still remain...hard work, good service, and continuous prospecting.

Roof Maintenance for the rainy Season

My home computer is back in service, thanks to Woody Satta my computer Guru, and my site is up and running.
With rain expected tomorrow, I thought some roof maintenance tips would be in order.
All roofs and gutters should be checked annually, preferably in September/October before the rainy season is fully upon us. With trees growing around many houses, the house movement we experience on the adobe soil in this area, and the general wear and hardening of sealants suggest a general inspection of the roof and before the rains.
Tree debris blocking the water flow, either in gutters or downspouts will cause damage by rotting out the wood in back of the gutter. Additionally, with steel gutters the tree debris will create an acid with the water (this will also happen with wood roofs due to the tannin leached from the fire retardant chemicals used) and erode the steel. Aluminum gutters will not erode but have a tendency to sag since they are not as strong as steel. Most 1st story gutters can be checked and cleaned easily. A garden hose can be used from the top, inside the gutter to clear out clogged downspouts. In extreme cases, a metal snake can be used. Seams and corners should be observed/checked during the first rains for leakage. Leaks can be fixed or retarded with caulking, however, long term you may have to call a professional for repair.
Depending on your gardener and roof type, paying your gardener a little more to keep your roof and gutters clean can be of great help to you.

When Your Computer is Hospitalized

My trusty home desktop is being brought back to life (I hope) by Woody Satta, my Guru. The virus is not as contagious as the flu...and besides, I've had my flu shot this year... but is potentially more deadly. Quicken and Turbo tax are only on my home computer, and much of my work is done at home, also. I go upstairs to my home office, and stare at the unattached wires on the desk as if the missing computer will magically reappear. Email and the Internet are available on my Droid Smart phone, but I am still at the Coldwell Banker office playing "catch-up" every day. Can you send a get well soon card to a desktop computer?

Happy Real Estate News

We heard an upbeat message at SILVAR’s Annual General Membership Meeting on Monday.
National Association of REALTORS® Chief Economist, Dr. Lawrence Yun, told our local association members, "The worst in sales is clearly over."
He said that in the San Francisco –San Jose area, the bottom has already occurred and prices are beginning to firm up. He stressed what we already knew: All real estate is local, and the Silicon Valley region is fortunate because so many people want to live here and demand for housing is high.
California’s housing market recovery started even before the home buyer tax credit, according to the national economist, and the tax credits boosted sales even more.
“California’s housing market correction was short, sharp and fast,” Yun said.
Yun’s message: Those with strong credit who can buy, should buy, while mortgage interest rates are still at a 50-year low. Things could change very quickly, especially if inflation creeps in.
“I don’t expect rates to remain low. They may increase next year,” he said. “If you’re willing to stay well within a budget and are comfortable with it, at a 4.4 mortgage interest rate, you’re protected under inflation.”
He hopes with the foreclosure moratorium banks will understand negotiating short sales would be a better option than foreclosures.
Yun said the federal tax credits did what they were supposed to do. The market must now be allowed to stand on its own. The key test will be this winter.
“If this winter’s sales match up with other winter home sales, I would say that would be a very positive sign,” Yun said. “Let’s give it time.”

Learning Something New

There's always some new information out there for me and my readers. With so many houses standing vacant in this market, either deliberately for staging, or because the sellers have moved on...not to mention the large numbers that have been added by the foreclosure market...insurance has become a big question.
I just found out that there is a special homeowners' policy available for vacant or unoccupied properties.
Many standard policies have a "vacancy clause" that is triggered if the home owner is gone for an extended period of time. This makes sense, when you consider that empty houses are more likely to have break-ins and that there's a higher risk that small problems, such as leaky pipes, could go unnoticed.
Although the extra policy may cost more initially, it could save the home owner lots more down the road.

The Jumbo Loans are Extended

Most economic news is focused on unemployment statistics, or on the Bush era tax cuts and whether they will be extended, modified, or allowed to expire. But those of us who watch the housing market were also concerned with so-called 'Jumbo' loan limits that were also about to expire. With sales already slowing down, our local
real estate market would have been heavily impacted if the maximum size of government backed loans were allowed to revert back to about $625,000 from the current limit of nearly $730,000.
Keeping the current conforming rates through the end of 2011 will allow more than 60,000 borrowers to qualify...most of them in expensive areas such as ours. Buyers who do manage to secure these loans will pay a slight premium in interest, currently about .8 percentage points, but buyers and sellers need all the help that they can get, and we are happy to see this bill pass.

Is This Good or Bad Real Estate News?

Yes, inventory in Santa Clara County is slowly moving up, and may even hit 5000 before year end, but that isn't the whole picture of our housing market. While sales have slowed, the median price has continued to rise...up 9.3 percent from a year ago. This reflects what we're seeing in our offices. The mixture of homes sold has ticked upward as more high-end homes and fewer bargain foreclosures have changed hands. At least for now, foreclosure sales are down from over half of Bay Area resales to 26.7% currently. Many of these are still being picked up by all-cash investors, who now account for a quarter of these buyers.
Interestingly enough, we are seeing more movement of mid-priced homes as the market has slowed. The properties that are selling fastest in Sunnyvale and Cupertino are those priced between $650,000 and $850,000. Where buyers in the East Bay were rushing to take advantage of the tax credit before it expired, we didn't see as many of that group because of our higher housing prices.
So don't be too shaken by news reports that home sales are slowing. Our values are holding, and even increasing, and for local homeowners, that's good news to hear.

Getting Back to Normal

My interior house painting is finished, and Hak Kim and his crew from Painter Friend did a fabulous job...everything was taped and covered in plastic, and they were in and out in less than two days...and that included removing wallpaper from a bathroom and retexturing the walls. Now my challenge is to get everything back in place before the carpet cleaners come on Thursday. With the help of my long-time handyman, this chore is nearly finished, and I have stopped asking myself, "Why did I ever start this project in the first place?"
In the middle of all this confusion, I managed a week-long trip to my son who is assigned to our embassy in Ottawa, Canada, a beautiful, clean city. I've also kept up with our seasonally slowing real estate market, and managed to learn my way around my new Droid Incredible phone. Never a dull moment!

Doing Good While Doing Well

Last week, we cooked and served a full breakfast at our office of Coldwell Banker, followed by an auction. All proceeds (more than $8000) went to support Habitat for Humanity. We also heard the news that our Cupertino office has placed #1 again in the local CB area. It was fun working together for a good cause, and piles of waffles (and dirty dishes) were a change from piles of paperwork.
With the Labor Day weekend here, summer is finally drawing to a close and consumers and agents are returning home from the last of their summer vacations.
The real estate market continues to have its ups and downs, along with the economy, but the Bay Area market is faring better than most regions in the country. Also, our market is considerably stronger today than it was during the depths of the recession. We’ve come a long way over the past two or three years. The National Association of Realtors reported that the number of buyers who signed contracts to purchase homes rose 5.2 percent in July after hitting a record low in June. Sales nationally had fallen sharply in the months following the expiration of the government's home buyer tax credit in April, and economists were expecting that trend to continue for a third straight month.
Buyers are hiring agents, attending open houses and making offers. Homes are still selling. But it’s more important than ever for sellers to price their property appropriately for today’s market and make sure their home is in the best possible condition. If they do, buyers will come – sometimes with multiple offers.

Getting Ready for Painters...

...is almost as bad as moving.
I've been boxing up the contents of my bookcases, dressers and china cabinets. The house painters will move my furniture away from the walls, but only if I empty the shelves first. Because all the boxes will remain in place, I don't have the concerns about breakage that my clients have when they pack to move, but it's still a big job. I took the cowards way out, and told the painters that they didn't have to paint the closet interiors...another big job averted!
According to "The Move Advocate," creating a simpler and less chaotic lifestyle, even without the prospect of moving, can be rewarding but requires some discipline. There are general rules to help you decide how to edit your possessions...
1. If you haven’t used something in three months, box it up.
2. If you haven’t used something in a year, sell it or give it away!
Unless the items have significant financial or emotional value, it makes sense to sell or give them away.
I sorted through my old photos and paperwork during the last month, tossing duplicates and unimportant documents, and organizing others.
Yesterday, I made trips to the second hand book store and the Sunnyvale library to donate books, and today, I went to the Hope trailer with used electronics and appliances.
Don’t forget that any items donated to charity must be in “good or better” condition. This rule was put in place to keep people from claiming deductions for items that should have been thrown in the garbage
The center of most of my rooms looks like something out of a Barb Schwarz pre-staging video, but at least I won't be wielding a paintbrush or climbing on ladders!

Combining Short Sales and FHA Refi's?

All the recent news reports I've been reading warn of a new batch of repossessions coming. This is because less than half of the homeowners trying to refinance or arrange better terms under the government's so-called 'Making Home Affordable' program have given up...wrapped in rolls of red tape and frustrated by delays.
Now FHA has announced a Short Refinance Option to help Borrowers with negative equity.

In an effort to help responsible homeowners with negative equity...the 'Underwater Group'...HUD this week announced details on adjustments to the refinance program that it unveiled earlier this year. This new program will enable lenders to provide additional refinancing options to homeowners who owe more than their home is worth.
Starting in September, FHA will offer certain non-FHA borrowers who are current and in good standing on their existing mortgages and whose lenders agree to write off at least 10 percent of the unpaid principal balance of the first mortgage, a chance to qualify for a new FHA-insured mortgage. The FHA Short Refinance option is targeted to help borrowers who have underwater mortgages because their local markets saw major declines in home values.

On the surface, this sounds like a good idea, but the long list of requirements on both the lenders and the borrowers may create another paperwork morass that puts us no closer to the government's goal of a stable real estate market by 2012.

70, Today!

This really is a milestone. In about five minutes, I'll be 70 years old, and this month also completes 38 years in Real Estate sales for me. So much has happened...both in my life and in the real estate market since I came to Sunnyvale in 1967.
Some of the biggest changes have been in the technology we use in marketing homes. We went from checking out new homes on the market by driving to the local board of Realtors office and looking at a hand written list every week, then bi-weekly It was followed by "the book" with a single black and white picture of the house. Before electronic keysafes, we all accessed a keybox with identical keys. If an agent lost his or her key, the whole system had to be rekeyed.
Then came computers, printers with rows of holes on each side of the paper, and fax machines. No more driving to deliver each document that was needed for the sale or escrow...but as the ease of delivery has increased, the number of papers has increased proportionally.
Now a cell phone can pull up a series of color pictures of a house in seconds. We can lock out a lost or stolen key, and signatures are becoming electronic. No matter what changes come in the future, one thing will never change.
We will still need caring and professional Realtors to manage the legal and emotional sides of selling a home.
I can't wait to see what the next few years have in store, for the business...and for me!

When is it a Bedroom?

In the Realtor community, the definition of a bedroom was always: a room with a closet. My nearly 40 years of selling homes and using this meaning was recently corrected in an article by John Schneider, in his "All About Homes" column. Schneider is a licensed contractor, and he cited the Universal Building Code as saying that a bedroom is one used primarily for sleeping, and complying to several health and safety requirements. These include natural light and ventilation, an installed source of heat, electrical outlets, and a way to escape in case of fire or other emergency. Because of the potential for fire and the possible spread of gas fumes, there can be no door or window leading to the garage from a bedroom. (This is interesting, because there are local homes built by AHG that have this setup.)
There are other, more detailed requirements in the code, but nowhere in the list is the necessity for the bedroom to have a closet. We learn something every day!

Sunnyvale in Top 10 "Rich Cities"

Money Magazine's annual report on mid-sized cities is out again. In this year's Best Places to Live study, Sunnyvale placed number 7 in the "Rich and Single" category, with an annual median household income of $110,226 and a 30 percent single rate. Newport Beach came out #1 in this group, but there were several other local areas in the top 10: Mountain View, Milpitas and Santa Clara...with San Jose not far behind in the #15 spot. With all the single engineers around, these figures are not too surprising.
I also checked out their list of priciest homes, and Palo Alto came out highest in the country. Sunnyvale and Mountain View were also in the top 25.
Well, at least I'm single. I'll work a little harder at the "rich" part.

Some Thoughts on the Market

This afternoon I talked to a neighbor about the real estate market and the changing dynamics of our townhouse community. The buyers here are mostly young families attracted by the ideal location, beautiful landscaping, and good schools, and the majority of sellers have been seniors who are no longer able to handle two-story living (or even independent living at all.)
Later in the day, I read an online article that went into the economic side of this equation. Many of us in the Baby Boom Generation had much of our paper wealth erased when the stock market crashed in 2008, and retirement dates were delayed. But now, with the slightly rocky rebound in both the stock and real estate markets, we are starting to regain our confidence. In the next couple of years, we should see more seniors selling, and either relocating, or buying smaller, more manageable places to live.

House Logic

Jeff Bell, the president of the Silicon Valley Association of Realtors and a friend in my office, wrote an article that appeared in today's Mercury News. It was mostly about the advantages of owning a home, and the current all-time lows in interest rates for buyers, but he also mentioned an exciting website for new and long-time homeowners...HouseLogic.com. I had a chance to explore the site this morning, and it includes everything from an article on how to request a property tax reduction, to a whole section of do-it-yourself tips. Check it out!

The World Cup and Real Estate

We presented the offers on the townhouse listing on Wednesday night, and we are in contract. My clients are from Holland and they are almost more excited about being in the World Cup finals than in selling their house!
Their son Olaf sat in on the presentation, wearing an orange soccer jersey, and his birthday party yesterday had a soccer theme and a cake frosted in bright orange. If they beat Spain on Sunday, this will be their first championship since 1974.

It Pays to Work on a Holiday

Despite the loss of the first time buyers' credit, and the threat of "shadow inventory," (a sudden dump of foreclosed homes on the market) we continue to see low inventories and strong sales in the Sunnyvale/Cupertino markets.
I held open houses over the Holiday Weekend at my three bedroom townhouse listing in Sunset Oaks, and they were extremely busy. I had hoped that since there were fewer properties being held open on the 3rd and 4th of July, mine would attract a good turnout, and I was right.
This contemporary model was featured in a virtual tour, and the signs and advertising also brought in potential buyers.
Now we expect at least four offers tomorrow.

The High End Continues to Move Up In the Valley

Improving consumer sentiment, along with the deadline for the homebuyer tax credit, played a key role in the spike in recent home sales, including in the Previews luxury segment of the housing market. While the push for meeting the deadline of the federal tax credit created a swell of activity for first-time buyers, the sense of urgency spread to higher priced markets. Sales activity in the move-up market was definitely stronger.
According to our own Coldwell Banker Residential Brokerage luxury report, million-dollar home sales in Silicon Valley jumped nearly 70 percent in May from a year ago as the region’s high-end market continued to recover from last year’s lows. 251 homes sold for more than $1 million in Santa Clara County, up from 148 sales in May 2009.
Sellers of luxury properties are also getting a higher percentage of their asking price...99 percent in Silicon Valley, according to local MLS statistics. The next few months should give us a good indication of how strong the housing market recovery will be without the benefit of government stimulus.
The week after Memorial Day was quiet in our Cupertino office. The market is feeling more active again, but definitely not the crazy pace of April and May.

What's New in Sunnyvale

This has been an exciting week for Sunnyvale. On Wednesday, the new Sprouts Market opened on El Camino, and put 100 local residents to work.
I stopped in briefly on opening day, picked up my green shopping bag, and made a quick sightseeing tour.
Over 4000 locals showed up for the opening, and I knew that was not the time to shop.
Instead, I woke up at 6:00am on Friday, and arrived at the nearly empty store at its 7:00 O'clock opening time. On this visit, there was plenty of opportunity to shop, and the staff was proud to show me the products in the new store. The produce was beautiful, and specials like four large mangoes for a dollar will keep me coming back. Meats were all-natural...no hormone additives... and there was really fresh seafood, plus dozens of bins containing grains, nuts, dried fruits, and all kinds of granola and sweets.
The other addition to the city was the "new" Murphy Avenue, which opened just in time for the Art and Wine Festival this weekend. I dropped by this morning and was impressed by the expanded sidewalk seating and welcoming sign.

Here Comes the Sun

Finally....our normal California weather. No more turning the heat on in the morning to "get the chill out," and the woolens can make their final trip of the season to the dry cleaners. Yesterday, after a walk-through at the property that is closing on Thursday, I stopped at the car wash. Then I called and scheduled carpet cleaning for tomorrow. It will be a pleasure to show houses without fighting the cold and rain. We are so spoiled in the Bay Area that a longer rainy season makes headlines...but that is a major reason for our high real estate prices, and for the fact that the median sale price in Silicon Valley climbed 7.3 percent over this period a year ago. This trend away from entry level and distressed sales to higher-priced properties is a healthy sign that our market is steadily moving back towards normalcy.

Is the Housing Market UP or DOWN?

We hear varying information in all the statistics that are published. The best recent info comes from the National Association of Realtors. Sales in the first quarter may have been down from the fourth quarter of 2009, but it's year-to-year that really matter, and Q1 of 2010 is a definite improvement over Q1, 2009.
Interest rates are also ratcheting downward.
What's happening locally?
After the frenzy of buyers rushing to beat the deadline on the Federal Tax Credit, sales are less frenetic, but still very busy. Open houses are excellent and multiple offers abound. The difficult part is always dealing with lenders.
The appraisal on my last sale came in $25,000 under the sales price, but considerably over the listed price. Inventories are rising and sales steady. Single-family homes in the low $1 millions are moving very fast with multiple offers, but the local condo market is slower than normal. My lovely townhouse listing is still on the market.

Location, Location, Location

Last week, when I had just finished negotiating a successful sale for clients in the million dollar-plus range in a very nice area of Mountain View, I found out that my oldest son and his wife had made an offer on a lakefront property in Michigan. The markets are so dramatically different. We were competing with six other offers, and had to make a non-contingent offer that was more than $100,000 over the listed price to win the bidding war. My son had no competition, and offered $45,000 under the listed price. The final contract was $20,000 under list. Both places need extensive(and expensive) renovation.
The difference? The local house was listed at $1,200,000. It has 3 bedrooms and 2 baths and about 1600 square feet on an average size lot. The lakefront house near Kalamazoo, Michigan (where my son teaches at WMU) has 7 acres, 5 bedrooms, 4 baths, over 4000 square feet, a pool and tennis court.

Sometimes It takes a Long Time

Sometimes a client calls and everything comes together like clockwork: Inspections, Staging, Photography, Advertising, Tours, Open Houses,Sale, and Closing.
And then there are the "lifetime" listings.
This little house in Mountain View was not a long time on the market...in fact, it sold for full price after a week on the MLS and closed escrow in a month. The challenge was getting it there.
I first met the elderly woman and her adult children more than 18 months ago. Her house and garage were packed full of items that had been collected over a lifetime, plus the "collectibles" from her husband, who loved flea markets. Her daughter and son in law both worked long hours, and the months that followed were spent arranging a move for their mother to a comfortable retirement home, legal paperwork for the trust, and most difficult of all, sorting through a household full of papers, boxes, old furniture, and junk. When the house was finally empty, we were able to arrange inspections, termite work, repairs, landscaping, painting, carpeting, and mini-staging. The house looked great when I brought in the photographer, and a busy open house attracted a buyer whose agent was able to time the close so that his client could benefit from both tax incentives.
We closed a smooth escrow on Thursday, nearly 19 months after our first meeting in September 2008.

The Housing Market Goes Wild

This has been a record setting week! Santa Clara County posted the most new sales since we began tracking in 2001. Additionally, the county inventory actually dropped, which is highly unusual for this time of year. At this pace the California first time homebuyer and new construction incentives will run out very quickly, so you’d better get busy if you want to benefit from these programs. Last week Cupertino broke the record with 33 pendings. This week it is Sunnyvale with 32.
If you need more information on the credit, you'll find it on the State site.

Home Inspections are Essential

Long-time clients and I looked at disclosures last night on a property they're interested in. My first priority was the home inspection. The seller's agent had asked for an as-is offer, pretty common in our area, and the information in the property and home inspections was especially important.
A professional home inspection not only can provide a great education about the home’s systems, but also be a crucial tool in negotiating the fairest price on the home, according to HouseMaster, one of the first and largest home inspection franchisors in North America.
They provide the following tips to ensure that buyers make an educated decision when purchasing a home and get the best price possible:
1. Inspect the Inspector. Look for a home inspector with an excellent reputation and credential and verify that the inspector carries professional liability insurance
2. Look at the report. A poorly prepared report without pictures or clear, concise details addressing all the various systems and accessible elements of the home is less likely to be taken seriously.
3. Inspect ancillary systems. Often, the company will offer a multiple services discount as well as the added convenience of only having to attend one inspection appointment.
One company I often use gives a discount for a combination of detailed property, termite and roof reports.
4. Go along on the inspection. If the inspector discourages you from going along and asking questions, find another inspector. A home inspection is not simply a laundry list of what is wrong with the home. In addition to documenting issues and needed repairs that may exist, a professional home inspector will also show the new buyer how to operate the various systems in the home and provide tips on improving energy efficiency and maintaining the home in general. Being present during the inspection will make the final written report that much more meaningful.
If the inspection has been completed "up front" by the sellers, a good inspection company will welcome contact by the buyers to clarify any questions they might have after reading the report.
A little homework by the buyers can eliminate headaches down the road!

Short Sales...Shorter?

There are new rules on the horizon that require lenders to provide pre-approved terms for short sales. These sales, in which homes sell for less than owners owe, have been driving sellers, buyers and especially Realtors, crazy... as they can drag on for months without resolution.
The new requirements pertain to sellers who have been refused a loan modification.
The minimum amount a bank will take for these houses will be disclosed upfront, so a buyer's bid is more likely to be accepted. That should help to speed up the loan process, at least a little.

Old Blogs, New Blogs

I spent a little time on a rainy Sunday looking over some of the more than 700 posts in this site. I am amazed by the time dedicated to writing daily articles for the first couple of years, and in re-reading them, how timely most of them still are today. The pointers for preparing a home for sale and maintaining it are still valid, and much of what I wrote about the local market is still the same....surprising, since the first input was in the spring of 2007, and so much has happened in the local, state, and national economy since then. My description of our area (Sunnyvale, Cupertino) real estate market as an oasis, nearly untouched by the short sales and foreclosures around us, is still pretty accurate. There have been some exceptions, but our 10-15% loss in value from the top of the market is being slowly regained in the many multiple offers we're seeing.
The most visible local victim of the downturn is the deserted Sunnyvale Downtown Development. I wrote with such hope of seeing a delightful new town center built, and now it sits, an empty shell, waiting for a recovery that we can only hope will come soon.

The New Tax Credit's Not All It's Cracked Up To Be

There's so much talk around about the California State Tax Credit, that I thought it was time to clear up any misconceptions.
Some home buyers feel that if they get into contract on a house this month, they will be automatically eligible for both State and Federal Credits....not so... in fact it may signal an automatic audit.
The limit on funds from the State ($100 million, and when that runs out, it's over) is not the only limitation on the California credit. These tax credits are limited to the lesser of 5 percent of the purchase price or $10,000 for a qualified principal residence. Taxpayers must apply the total tax credit in equal amounts over 3 successive tax years (maximum of $3,333 per year) beginning with the tax year in which the home is purchased. The tax credits cannot reduce regular tax below tentative minimum tax (TMT). The tax credits are nonrefundable and unused credits cannot be carried over.
This is not the only complication. Why am I not surprised?
For more detail, go to the Franchise Tax Board site.

Ways to Make a Home Sell Faster

With Spring finally here, we are starting to see more property coming on the market. I've written before about ways to differentiate and add value to a house before it comes on the market, but these tips from HGTV are still especially timely.
Courtesy of HGTV’s FrontDoor®:
Make a big impact with some minor (and some not so minor) home improvement projects. See the top ten picks below.
# 1: Top Budget-Friendly Project: Clean and Conquer Clutter

Cleaning and decluttering is by far the most cost-effective way to add value to your home. A clean and clutter-free home looks larger and makes a great first impression on homebuyers. So scrub, dust, mop and vacuum each room until it shines, and while you’re at it, seriously scrutinize your possessions and toss or donate anything you haven’t used in a year.
If you’re selling your home, put away your favorite knickknacks and family heirlooms. Buyers want to see a clean, neutral space where they can envision their own belongings.

# 2: Top Energy Efficient Project: Add Insulation

# 3: Top Outdoor Structures Project: Build a Fence

# 4: Top Big Ticket Project: Finish the Basement

# 5: Top Home Exterior Project: Repair Gutters

# 6: Top Outdoor Living Project: Add Outdoor Lighting

# 7: Top Landscaping Project: Tidy Your Lawn

# 8: Top Storage & Organization Project: Maximize Storage Space

# 9: Top Bathroom Project: Refresh Fixtures

# 10: Top Kitchen Project: Upgrade Appliances

For more ideas and details on the top 10 projects that add home value, click here.

A Timely Reminder

A friend of mine mentioned that he missed the deadline to appeal his property tax assessment last year, so I thought that I'd take this chance to remind my readers about the dates.
The Santa Clara County assessor’s office is one of 10 in the state that mails assessment notification cards to homeowners early every year. This year the cards will be sent out to 465,000 property owners on June 23.
Larry Stone, the county assessor, has said that last year his department reduced the value of 98,000 properties, which took a total of $19.3 billion off the county’s assessment rolls. He believes most will carry over this year, and an additional 30,000 to 40,000 properties will be placed on Proposition 8 temporary assessment relief status, as well.
Homeowners should wait until they receive their notification card before asking for an informal review or appeal. In the meantime, they can gather information regarding the value of their home based on values at the beginning of the year.
Remember, in accordance with Proposition 8, the market value of a property has to drop below the assessed value before a homeowner can seek a property assessment reduction.
Once homeowners receive their assessment notification card, they have until August 15 to seek an informal review. Homeowners can do this online by going to www.sccassessor.org. Homeowners have between July 2 and September 15 to file a formal appeal, and requests for appeals will not be considered after the deadline.

Don't Believe Everything You Hear

A while back, I ran a standard credit check, and had a real shock. All three credit bureaus had listed me as deceased as of 2005. Obviously someone pushed the wrong button on a computer, and that mistake certainly never kept CitiBank and other creditors from collecting their monthly payments over the years. However new credit for "the late Bobbie Lemberg" would certainly be hard to get. Two credit bureaus were willing to accept a letter, current driver's license and phone bill as proof that I'm still here, but Equifax demanded a notarized letter too...pretty untrusting.
A friend who knew what had happened sent me this article about a San Francisco woman who had the same problem. Her situation was even worse, though. Her insurance, Social Security and pension were cancelled when she "died."
Anyway, despite any rumors running around, I'm very much alive and kicking...and selling real estate!

Spring Fever

Looking at the history of my blog, I realize that I have gone from publishing daily to bi-weekly, and lately, to about once a week. I don't know if this is a normal progression or a minor burnout.
It's certainly not writer's block, because I have a backlog of subjects I'd like to cover. I've been busy preparing two new listings for market, and trying to get buyers in contract in a multiple offer market, but that's nothing new...so I'll chalk it up to Spring Fever and promise to do better. Since this is the first day of Spring, and my cherry tree is beginning to blossom, that is the perfect excuse.

Sunnyvale in Top Ten Cities Where Prices are Rising

Yahoo Real Estate featured an article from Forbes Magazine that had some positive things to say about the housing market.
Asking prices on single-family homes have increased as much as 36% from the previous year in some cities, an indicator that Michael Simonsen, CEO of Altos Research, a Mountain View, Calif. market research firm, says reflects "a bounce off the bottom of the bubble bursting."
To find out where prices are increasing the most, Altos Research pulled data for every U.S. city with at least 100 homes on the market (roughly 8,000 cities), and found those with the biggest price jumps from the previous year. Altos tracks asking prices for single-family homes but not condominiums.
Asking price, or list price, can be revealing because it records the price of a home at the earliest point in a sale. If sellers are asking for more money, it means they sense demand.
Lexington, Mass., has seen prices increase more than anywhere else. List prices rose 36% since last year, to a median $1,197,923. But this more likely reflects a change in the type of house for sale than an increase in the price of a typical house.
Three of the top 10 markets for rising prices are here in California, a state at the heart of the real estate boom and bust. But because markets in here were inflated earlier, many were well positioned to make a comeback even before the larger economy recovered.
That's true in the cities of Sunnyvale (here in Silicon Valley), Poway and affluent Arcadia, outside of Los Angeles, where prices increased an average of 28%. Inventory has dropped in these markets, suggesting demand is up, and prices in California rose overall from January 2009 to August 2009. That’s a natural seasonal trend for healthy markets, but it hadn't been reflected in California since the bust.
However, it's futile to draw conclusions about the national market from a few cities, and it's just as difficult to predict what turns a local market will take based on national trends. But data that bores down into local trends and uncovers positive signals, alongside indicators of a broad national recovery, together tell a story that the country's beleaguered housing market may be finding solid footing.

What's Up with Fannie Mae?

I was listening to Bob Brinker's talk radio show on the way to a weekend appointment, when he rattled investors by mentioning that Rep. Barney Frank had said that debt issued by Fannie Mae and Freddie Mac is different from bonds issued by the Treasury Department. Frank also raised the possible risk that investors in the companies' debt may not be paid back.
To calm worried investors, Frank later issued a statement adding that "this status does not prevent the Treasury from treating the debt of Fannie and Freddie in the manner that it believes best supports the important goal of stabilizing the financial system."
Treasury Department was forced Friday to reiterate its financial support for Fannie Mae and Freddie Mac. "As we said in December, there should be no uncertainty about Treasury's commitment to support Fannie Mae and Freddie Mac as they continue to play a vital role in the housing market," Treasury spokeswoman Meg Reilly said in a statement.
While their debt doesn't carry an explicit government guarantee, the Treasury has taken numerous steps to reassure investors that the government will keep the companies running. Late last year, the Obama administration pledged to cover unlimited losses through 2012 for Freddie and Fannie. So far, the companies have needed $126 billion in taxpayer aid.
Frank's statement unsettled investors because it injected a measure of uncertainty into the market. He has scheduled a hearing for later this month on the two companies' future. The Obama administration, however, wants to wait until 2011 to propose an overhaul.
Fannie Mae admitted last week that it needs another $15.3 billion from the federal government to stabilize its finances. Fannie, which is controlled by the federal government, has been making some financial progress. It reported a fourth-quarter loss of $16.3 billion, including $1.2 billion in dividend payments to the Treasury Department, as compared to a loss of $25.2 billion in the same period in 2008.
(I guess that this is improvement.)
Its problems stem from a continuing stream of bad loans, with over 5 percent of its single-family loans more than 90 days delinquent, up from 2.42 percent in 2009.

The Census and Real Estate

Starting in March, Census forms will be delivered to every residence in the United States and Puerto Rico. A couple of clients have asked me why they should bother, and why the government is spending so much money on this.
First of all, they have no choice. The Census is required by the Constitution to take place every 10 years. The 2010 Census will help communities receive more than $400 billion in federal funds each year.
What does this mean for us? Well, in addition to helping our community to receive federal funds for things like hospitals, job training centers, schools, senior centers, and emergency services, the Census will arm us with statistics to better know our community and potential home buyers.
The resulting data also gives us a better idea of trends in the market, who’s buying homes, and home ownership statistics. To see recent reports on housing topics from the Census, visit U.S. Census Bureau Housing Topics.
And don't forget, the data collected by the Census also helps determine the number of seats our state has in the U.S. House of Representatives, further ensuring that voices are heard....we hope!

Zillow, Trulia, and True Value

I often hear from clients who want to know why the estimates of value they get on their houses on Zillow.com is so far off from what they think the prices should be. I explain to them that this site uses any comparables that have the same zip code and square footage, regardless of builder, condition, and school district.
I guess that Money magazine agrees with me. In this month's "Web Guide 2010," they have a section called: Don't Try to Do this Online. Under the heading 'A Waste of Time' they say, "Don't think that Zillow.com tells you what your house is really worth." They say that the "Zestimates" are based on limited comparables, and are inaccurate unless there have been a lot of sales in your neighborhood lately. They suggest using an appraiser to evaluate the property in person.
For buying a home, they recommend Trulia.com...a site that I find "truly" helpful.

Divorce and Real Estate Sales

I just read an online article about the hassle of trying to reconcile a divorcing couple enough to get a house sold. Nowadays, there are fewer reasons that homes are put on the market. Years ago, a "move up" was caused by a wish for an extra bedroom or a different school district, or even something as minor as the desire for a pool. In 2010, homeowners are more concerned about job security and volatile investment portfolios, and our inventory is low because most people are staying put if they possibly can.
If they are selling a house, it is usually because they are forced to sell. Causes range from knee problems that make two story living difficult, to more serious ones...money problems, death and divorce.
I remember regular speaker phone conversations between the Realtor I tour properties with and her acrimonious divorcing clients. One would OK staging the house, the other would veto the expense. One would agree to a reasonable listing price, the other would insist on an inflated value....and on and on. It's a wonder that the house finally sold.

Staging, Vacant Houses, and Lazy Agents

Yesterday, a couple of us went on our regular tour of new listings in the area. It was a shock to see the difference among the properties for sale. The sky was overcast, and the cold and cheerless feeling of walking into a locked and unheated house didn't help. The dark, bare rooms accentuated all the negatives in these houses, and the lack of a listing agent there to greet us...and perhaps point out unseen positive features such as copper plumbing...made for a quick departure. With no heat on a chilly day, the interior of these vacant houses can be 10 or 15 degrees colder than outside. Our tour rules in the local board of Realtors do not require the listing agent to be present if the house is vacant, but...
Contrast these houses to properties that were warm, beautifully staged, and well lit. The listing agent was there to greet us and answer questions, and was prepared with colorful flyers describing the home's features. Often refreshments were set up in the kitchen or patio to induce us to linger, and to remember that house when we showed properties...so much positive enforcement for so little effort!

Local Market Trends

We might see a much earlier spring selling/buying season this year because of the upcoming deadline for the home buyer tax credit. The "hot" season typically takes off in March and runs through May. But buyers who want to claim this year's tax credit, which ranges from $6,500 to $8,000, must purchase their homes by April 30 and close by June 30. So look for more activity than normal in February and March as we head toward the finish line. Some better economic news has also prompted more people out along with the continued low interest rates.
Inventory is still an issue in most markets, leading to busy open houses, and many homes are being sold with multiple offers...helping to firm up sales prices.
Buyers are circling attractive listings and many are willing to make all-cash offers to win out. Cash is still king, because appraisals continue to be an issue, and because lending is taking longer.

Valentine's Day Realtor-Style

The Cupertino/Sunnyvale District of the Silicon Valley Association of Realtors celebrated Valentine's Day in a festive manner again this year, and it was all for charity.
The District's Valentine Auction for Charity, held yesterday at our weekly tour meeting, featured many beautiful, sweet and some very delectable treats. Agents and affiliates bid, laughed and rooted one another on to contribute to the annual event.
The Cupertino/Sunnyvale District is known for its charitable contributions to area causes, such as Sunnyvale Community Services. Gift donations generously made by some members added to the fun of the event.
Carolyn Miller, chair of the auction, said, “Some newcomers asked if the weekly meetings are always this fun. We said, ‘It's not always an auction, but the meetings are always fun and informational!’”
The District first held the Valentine auction three years ago “as something different to do,” and it has turned into an annual event.

Thirty Eight Years in the Business...and Still it Surprises Me

I had a new experience this weekend. My clients found a house that appealed to them, and we prepared to write an offer. We were to meet on Sunday, and offers were scheduled to be presented on Monday.
Yes, "offers." Almost every house for sale in our area is seeing multiple offers...even those in the million and up price range, as this one was. On Saturday night, the listing agent called me. The sellers had canceled the weekend open houses, and hinted that they wanted to move out of the retirement community where they had recently settled, and back into their long-time home.
I asked the listing agent what she thought that I should do, and she suggested that we still write the offer...just in case...which we did. But today, the MLS showed the listing as withdrawn. Back to square one.
Realtors from Sonoma to Carmel and San Francisco to Danville are noticing a surprising trend –a critical shortage of homes for sale. At the entry level, and in many mid-price level markets, we have plenty of people willing to buy, just not enough homes to go around. My how things have changed in the past year! To quote one of our managers, the new lament among local Realtors is, "so many buyers, so few listings.”
What’s happening? First-time buyers are rushing to take advantage of the federal tax credit before it expires this spring. Unfortunately, we aren’t seeing a commensurate number of sellers bringing homes to the market to capitalize on this. There are inventory shortages throughout the Bay Area. Open homes are attracting a flood of serious buyers. The result is that attractive, well-priced homes in good neighborhoods are getting lots of interest and, in some cases, multiple offers.
So by and large, it’s pretty much a conversation about inventory when you talk about our Bay Area real estate market. Even the luxury market, while admittedly slower than lower price points, has inventories trending down. Accuracy in pricing and attention to detail in showing condition remains critical in the luxury markets, but sales activity is picking up and inventories are going down.

Look Ma...I Can See

I haven't written in this blog for a week, but I've been busy taking care of some minor health problems. Thanks to wonderful Doctor Volpicelli and his staff in Mountain View...and two cataract surgeries... I am now able to see to read and drive without glasses again. What a pleasure! It's more than annoying for a Realtor not to be able to see house numbers. "Lola," my GPS finds the street and general location, but then I'm on my own. Last night, I bought my first pair of non-prescription sunglasses in years.
Anyway, I'm now back to my normal schedule of meeting with buyers and sellers and previewing properties, just in time for what is shaping up to be a busy real estate season.

A Positive Move

An item hit the business news this weekend that reflects a good change in the rules affecting real estate...for a change.
FHA is suspending the "Anti-Flipping" rule that has been on the books for ten years. It had required that investors hold a property for 90 days before it could be resold. This was originally written to eliminate fraud and 'serial' flipping of the same property.
With the large numbers of foreclosures in poor condition now coming on the market, though, this gives buyers with low down payments a chance to buy renovated homes. It usually takes 60 days or less for an investor to buy, rehab, and list a house for sale. Now FHA is making these homes available to buyers with small down payments, not just those who have 10% or more.

Is it Tax Season Already?

Even though it's not yet February, every day's mail seem to bring more statements needed for my 2009 taxes.
Nothing about taxes is easy, and deciding how to fill out your return is no exception. Should you hire a tax preparer or do it yourself? Go with one of the free online options or stick with the old-fashioned paper forms? If you’re like approximately 80% of tax filers, you’ll turn to tax software or a tax preparer. But that doesn’t mean the end result will be error-free. I have the newest version of Turbotax Deluxe installed on my computer, and combined with Quicken, that seems to work for me, but I have a background in tax preparation...admittedly many years ago.
When the Government Accountability Office sent secret shoppers to 19 storefront tax preparers, each and every one goofed up something. More mistakes were found in returns prepared by so-called tax experts than by individuals, the 2006 GAO report found.
The obvious solution is to simplify the tax code, but the IRS can’t change tax law; that’s up to Congress. So instead the IRS is focusing on the oversight of tax preparers. Currently, anyone can be paid to prepare tax returns without registering with the IRS, but the agency recently announced that in future tax seasons, all paid tax preparers will be required to register. Competency testing and 15 hours of annual education will also become a matter of course, although CPAs, attorneys and enrolled agents will be excluded because they already adhere to similar standards to keep the letters behind their names.
But some worry these new rules don’t go far enough.
It’s a valid concern, especially after recent reports of more than 100,000 suspicious claims relating to the first-time home buyer tax credit.
You are ultimately on the hook for your return, even if your tax preparer goofed it up.
So what can you do? Be careful, especially this year, since new tax breaks designed to stimulate the economy: energy-efficient home improvements, the home buyer credit, education tax changes to name a few, will make filing for tax year 2009 even more confusing.
Get recommendations. Ask your family, friends and business associates. Look for someone with experience preparing returns like yours. For instance, if you run a small business or own rental property, look for a preparer who understands the related tax code.
-Ask questions. How do they keep up with new tax laws? Do they have additional credentials? Will they be preparing your return or will they pass it off? Don’t hire a question-dodger.
Find a year-round preparer. For most of us, tax season ends on April 15. But the IRS is open year-round and might send taxpayers letters asking for additional documentation or announce an audit in the middle of summer.
The IRS suggests taxpayers avoid preparers who claim they can get you the most money back or base fees on the size of your refund. And only work with a taxpayer who will sign your return and provide a copy.

Will Major Support for Housing Be Ending?

If the government carries through with its plans, major support for the housing industry could end by April, leaving the sector to fend for itself. That could happen because of two critical decisions: the tax credit for home purchases that will end with contracts signed by April 30 (buyers have until June 30 to complete their purchases, and the possibility that the federal reserve will stop buying mortgages by the end of March.
The central bank indicated at its last rate-setting Fed Open Market Committee meeting that it intended to purchase $1.25 trillion of agency mortgage-backed securities and about $175 billion of agency debt by the end of the first quarter of 2010, and to "gradually slow the pace of these purchases to promote a smooth transition in markets."
Both dates could be extended, depending on market conditions. The FOMC emphasized that it would continue to evaluate the timing and overall amounts of its purchases of securities in light of the evolving economic outlook and conditions in the financial markets. If the Fed doesn't see private money coming back into the mortgage market, it will either need to change its mind or let mortgage rates rise back to the 6%-plus range they were before the Fed started its intervention.
Mortgage rates are currently below 5%. If they jump back up to 6%, lots of people won't be able to afford a home that may have been within reach at the lower interest rate.
This Could Be Just a Test
Clearly, Congress got the message that the housing industry hadn't yet healed enough to go it alone. With foreclosures continuing to mount, there's no reason to think it will be ready on May 1. Considering the election that's looming this year, it's likely that Congress will decide to extend that tax credit as well.

FHA...Some Good News, Some Bad

Rising defaults on loans insured by the Federal Housing Administration have led the agency to impose future policy changes to its home loan program.
The FHA is federally mandated to maintain reserve funds at 2 percent or greater. As of November, the agency reported that its fund had declined to .53 percent. The funding is used to cover losses on mortgages insured by the FHA that go into default.
Loans insured by the FHA generally are less expensive to borrowers because of the lower down payment requirements. However, these loans also have fees, such as up-front mortgage insurance. To help the agency raise its cash reserves, the FHA is increasing the up-front mortgage insurance premium from its current 1.75 percent to 2.25 percent. HUD released a Mortgagee Letter today making the premium increase effective in the spring.
The agency also is raising the minimum credit score requirements. Currently, borrowers with FICO scores as low as 500 have been approved for FHA-insured loans. Under the policy changes, new borrowers will be required to have a minimum FICO score of 580 to qualify for the FHA’s 3.5 percent down payment program. New borrowers with less than a 580 FICO score will be required to put down at least 10 percent.
The new policy also will reduce the amount of money sellers can provide to home buyers at closing to 3 percent, down from its current 6 percent of the home’s price. The change brings the agency in line with industry standards and removes the incentive to inflate appraisals. The FHA expects these changes to take effect in early summer after it passes the normal regulatory process.
So what was the good news?
HUD/FHA eliminated the need for second appraisals on high balance loans in declining markets effective January 25, 2010.
Loan amounts that exceed $417,000 will no longer need two appraisals.
This benefits our clients reducing costs and increased efficiency in their loan processing. I guess that we should be happy for small favors.