Pets Are Innocent Victims

Sad news from the Central Valley. An unexpected repercussion from the mortgage crisis and increasing foreclosures are the unprecedented numbers of abandoned dogs, cats and other pets that are being left behind when homes are foreclosed upon. A shocking number of homeowners are just walking away, leaving dogs tied up in the yard, cats in the garage and rabbits, turtles and lizards in children's bedrooms.
Stockton and Modesto have some of the country's highest foreclosure rates, and shelter operators are finding it impossible to save most of these animals. Pet adoptions are more rare in difficult financial times, and even those families able to stay in their homes aren't bringing home puppies and kittens.
I recently saw a PBS special called "Life After People," and one of the most touching segments was the initial condition of house pets who were left alone and unable to survive without the humans who had made them dependent on their love and care.

Don't Sue the Realtor

A lawsuit taking place in the San Diego area reminds me of the old saying, "Don't shoot the messenger." Just as stockholders tried to sue investment companies when their portfolios lost value during the dot-com bust, a homeowner is suing her Realtor in a declining real estate market. She claims that the five year old luxury home she bought wasn't the "good buy" that they were told it was. Much emphasis is being placed on the appraisal, As I learned in my college appraisal classes, appraisal is an imperfect science, often subjective in nature.
The lender decides who will do the appraisal, and the real estate agent sometimes assists the appraiser in providing documentation that will make sure the number comes in at the right point for the deal to close.
In the sub-prime scandals, some lenders pressured appraisers to come up with the "magic" number that would get the deal closed. They even threatened to withhold business if the appraiser didn't conclude that the property was worth what the buyer was willing to pay.
But this lawsuit seems to be more a case of "sour grapes"...buyers who purchased a home at the top of the market and need a scapegoat as they watch property values decline.

The Time to Refinance May Be Coming Soon

All those phone calls that you've been getting from "hungry" mortgage brokers may be worth listening to pretty soon. The proposed yearlong increase in conforming loan limits will be coming as soon as the federal economic stimulus package is approved.
As of this morning, the new limits expected for California will probably be $625,000, up from $417,000. Because interest rates for these Conforming loans is much lower than so-called Jumbo loans, (and may move even lower when the Fed lowers the prime rate again at the end of this month) you can expect a rush of new refinancing when the bill is passed.
Sue-Baker Dirickson, our in-house lender, advises homeowners with loan amounts in the $425,000-$625,000 range to start their paperwork now, so that they can be first in line to take advantage of these new lower rates...not a bad idea!

I Voted Today

I sent my absentee ballot in this morning, and it made me think about what will face the candidate who wins next fall. Certainly, the economy will not magically turn around by January of 2009. Even though the last two recessions were short-lived, it will take a while for any turnaround to take place. The budget deficit will see to that.
Daniel Gross, in a recent article in Newsweek Magazine, reminds us that the slowing economy brings its own set of problems...higher spending on unemployment benefits, and greater demand for social services, coupled with lower tax revenue. A worse fiscal picture will make it hard for the new president to keep his or her campaign promises, whatever they are.
Gross goes on to say that "the current crises in housing and credit aren't nearly as bad as the situation that Ronald Reagan inherited in 1981, when mortgage rates were nearly 15 percent."

California's Economy...Slowdown or Recession?

Steven Levy, director of the Center for Continuing Study of the California Economy says that the state is about to begin what should be a short and mild recession. More importantly, he expects housing to hit bottom sometime in 2008. He thinks that the half million new residents expected in California every year will use up existing inventory pretty quickly.
Employment in the state may be down somewhat...The unemployment rate increased from 4.8 percent a year ago to 6.1 percent last month....but analysts are not expecting a deep recession like those of the early '90's and 2000/2001. These were caused by industry-related losses. In the nineties, it was aerospace, and at the turn of the century, the end of the dot-com boom was the villain. Levy says, "None of our lead industries in terms of our economic base are threatened."
It's nice to read some hopeful news, even if it's not a magic solution to the economy's problems.

Gutter Clog Prevention

Sitting at the computer and watching the heavy rain come down, I can't help but realize how timely a recent email from Mr. Handyman is.
Since clogged gutters cause water to pool in the gutters, roof shingles often dip into the gutters. If the gutter fills with water, the water will wick up the shingle, getting between shingle and and the roof sheathing, and then wood rot can start.
At the very least, clean your gutters every fall before it starts raining.
The next level of protection are anti-clog devices you install in your gutters on the downspouts. They don't prevent the gutters from clogging per se, but do prevent the downspouts from getting clogged. Cleaning clogged gutters is easier than cleaning clogged downspouts. One type of these anti-clog devices is the Wedge downspout screen, but the ultimate in anti-clog devices is the RainTube gutter protection system. This mechanism is Green as it's made from recycled milk jugs. You install it in your gutters once, and your gutters never clog again. Even better, you avoid the possibility of water wicking under your roofing shingles...a very good thing.

It's Not Easy Being Green

What takes priority...trees or solar panels? Well, it seems that in Sunnyvale California, despite its stringent tree ordinance, solar panels win. At least that's the decision of the Santa Clara County Superior Court.
The original law was signed by former Governor Jerry Brown, and would normally affect only those trees planted after a neighbor's solar panels are installed, but in the case now being appealed, it can also apply to trees and shrubs that later grow big enough to shade the next door neighbor's solar panels.
Two big, beautiful redwoods are the trees named in this controversy, and the sad part of the situation is that both neighbors are sincere environmentalists. One owns a Prius and the other an electric car. The Libertarians might say, "Your rights end where mine begin," but in this case both parties seem to have right on their side.

5 Tips For a Smoother Move

I was shocked this morning to read about a national moving company with local offices that has been indicted for multiple acts of fraud against its clients.

These pointers that were sent to me by The Move Advocate might prove helpful to you if you are expecting to move anytime soon. Most of the advice is common sense, but it's all worth repeating.
Make sure that your moving quote is based upon a visual survey.
One of the biggest mistakes that people make when booking a move, is assuming that a quote which is made over the phone is guaranteed. The only way to obtain a binding quote is to have your household goods visually surveyed by a moving company. Make sure that you get the quote in writing.
Read all documents before signing.
Once you have been provided a written quote, make sure you read before signing. The quote should document weight, distance, and services to be rendered. If you have verbally discussed any special services make sure that those needs are reflected in the estimate.
Make sure you have adequate valuation coverage.
Standard coverage for interstate moves, which all carriers are required to provide, is 60 cents per pound. This amount will be inadequate if an expensive item, such as a plasma television, is damaged in your move. Additional insurance can be purchased through the carrier or through your home insurance policy.
Use a reputable mover for your move.
The number of choices available for your move is enormous. Make sure that you are using a reputable mover who is licensed, bonded, and insured. A reputable mover will not ask for a deposit up front and will have moving trucks with their own company name on them.
Make sure the mover can contact you.
If you are planning to have your phone disconnected the day of your move, make sure that the moving company has your cell phone number or another way to reach you. This is also applicable for your new residence.

Band aids for the Economy

You can see from his expression that Secretary of State Henry Paulson is less than enthusiastic about the $800 per person credit that President Bush is trying to push through Congress. Hundreds of billions, spent on food, mortgage payments, or flat screen TVs??
A more dramatic action was taken by The Federal Reserve this morning, cutting interest rates three quarters of a percent. The unplanned cut came after two days of massive losses in stock markets around the world but was not enough to prevent Wall Street from opening today to a dismal start.
This move comes after stock markets in Asia and Europe saw some of the steepest one-day slides in decades based on fears that America's economy is collapsing, and a lack in confidence in President Bush's ability to pull the American economy away from recession. The expectation is if America's economy falters, the effects will be felt around the globe.
Mellody Hobson, president of Ariel Capital Management and a "Good Morning America" financial contributor said "A sneeze in the United States can cause a flu around the rest of the globe."
The key Fed Funds interest rate now stands at 3.5 percent, and the Feds may lower the rate even more at their regular meeting next week. We are already seeing fixed conforming mortgage rates of five and a half, with no points, but funds will have to be more liquid for jumbo rates (over $417,000) to drop.

Better Real Estate News

Sometimes it's good to get away. Catching up on the news after a wonderful weekend of dancing, I saw that the San Jose Mercury had moved the upcoming presidential primary to headline status, and lowered the state of the economy to the bottom of page one. Even better, they admit that the Silicon Valley outlook is more positive than the rest of the country's and that we may make it through without major damage, mostly because of global demand for technology.(I guess that good news isn't worth banner headlines.)
They also realize that my "oasis" description may be accurate when they state that "It's a split market in which parts of San Jose are seeing hundreds of foreclosures while demand remains strong in the northern part of the county."
That's especially good news for the owners of my new listing in westside Sunnyvale!

Time to Go Dancing

I opened up The Mercury News this morning to huge headlines...HOME SALES DIVE TO LOW. Of course, the smaller print reads "Prices increase 4.6% in Valley, fall elsewhere in the Bay Area," but the damage is done. They go on to explain that our median price rose slightly because cheaper homes are selling less than more expensive ones, skewering the statistics. A further explanation would be the lack of inventory that we in the business have seen in our "Oasis" and the multiple offers that still continue on a regular basis. Reports of extremely busy open houses were the norm at our office meeting this week.
But no, the doom and gloom theme of the article continues with hints that consumers are losing confidence in the market and the economy, and the theme is extended by the stock market news in the business section...Fear Reigns on Wall Street.
Oh well, I think it's time for this Realtor put down the newspaper, pack up and head for a dance weekend in King City. Nothing like a change of pace and a fresh outlook!

House Lust

The real estate article in this week's issue of Newsweek was an excerpt from a new book, "House Lust:America's Obsessions With Our Homes."
It helped to remind me that our interest in real estate is much more than economic, even in these currently gloomy times. Sure, we used the increase in our home equity as an automatic savings plan for years, but we also watched the reality-based makeover shows on HGTV and were fascinated by programs like "House Hunters", their top rated show.
Daniel McGinn, the author, notes that real estate has had a peculiar hold on the American psyche, as far back as several of our founding fathers, who were land speculators. We still spend rainy nights playing Monopoly, and despite the downturn, we are expected to spend $170 billion on remodeling this year.

I received a really interesting email this morning from Gary Dulleck at
The Home Inspectors, a local property inspection company. It contained a link to a group of interesting and informative short videos on home repair. If you're having trouble with doors that won't stay open, faucets that turn the wrong way, faulty dishwasher air gaps, or just want to see why you really need a GFI, this is the place to go.
Hope that you enjoy them. The one on doors certainly solved a mystery for me!

Don't Let Your Heat Go Up the Chimney!

When the fire is burning, the fireplace puts out very nice heat. But when the fire is not burning, having an open fireplace damper is like having an open window. Your furnace creates heat, and much of it goes through the fireplace and up the chimney.
The easy solution is to close the damper when the fireplace is not being used. However, due to the heat of fires, the metal of the damper sometimes warps over time. When that happens, it can never be fully sealed.
There is however an interesting product on the market called a Chimney Balloon which can be used to fully seal your chimney.
It's basically a very large and thick plastic bag and a very long plastic fill tube. Using the fill tube as a handle, your shove the plastic bag up into your chimney, then you inflate it. Once inflated you close the valve on the end of the fill tube. Your chimney is fully sealed and the fill tube hangs down into the fireplace area so you can see it and know the balloon is still up there.
To remove, simply open the valve on the fill tube, wait a few seconds while it deflates, and pull it down.

Preparing for a Property Inspection

I am about to order property inspections for clients who are preparing to market their home soon. Because many of our sales are still "as-is" in this area, it is doubly important for buyers to know what work is needed on a property for sale.
Here are are some cheap and fairly easy items to check and repair before a home inspector or pest inspector shows up to inspect your home.
These are the top 9 items that show up on reports. By checking these items, you can have a cleaner inspection on your home. Most of these items you can do yourself.

1. Seismic Strap Water Heater
Kits can be bought at any hardware store for $15-$25. It is required by the seller to install the straps before the close of escrow. The straps are usually pretty easy to install but sometimes can require the water heater to be removed and then the straps installed. The kits come with directions for correct installation.
2. Smoke Detectors
Make sure all smoke detectors are working. Smoke detectors should be installed within 15 feet of all bedrooms and there should be at least one on all levels of the home. Newer construction requires smoke alarms in the sleeping areas also.
3. Loose Toilet
This is an item that shows up on many inspections. Stand in front of the toilet and put slight pressure on the front right side of the toilet and then the front left. If the toilet is loose you may be able to tighten the bolts. Don't over-tighten, as it can be easy to crack the toilet.. It is also possible that the toilet will need to be pulled up and wax seal replaced. You may want to hire a Plumber or Handyman to repair this item.
4. Lower Soil from Wood Siding at Least 6 Inches
Soil should be lowered from the wood siding or stucco weep screed at least 6 inches. When untreated wood and earth are very close there is increased risk of wood damage from moisture and or wood boring insects. Remove the excess soil, but in such a fashion as to not cause water to stand against the foundation. Water should always drain away at least 3 feet from the home.
5. Cut Back Shrubbery or Remove Clinging Vines from the Side of the Home
Any plant growing on a home may eventually damage the siding and other parts of the home. Clinging vines can also create an environment for insects and other pests and may hold moisture against the home. Also the inspectors may not be able to inspect the entire exterior of the home due to limited access.
6. Clean Debris from the Roof and Gutters
Excessive debris on the roof and in the gutters can limit the Visual Inspection. Typically the home inspector will recommend further inspection of the roof. It is best to use a blower to clean the debris off of the roof. Brooms or rakes can damage the roof shingles or granules. Use extreme care when on the roof. Roofs can be slippery. If you are hesitant about walking on the roof, hire someone to do the work for you.
7. Remove Debris under the Home
Most houses have some scrap wood or debris under the home. This is always called out on a home inspection and termite report. It is recommended that all debris be removed to a rakeable size. While under the home, be sure to check for leaks on water and drain lines. Also check for separated heating ducts (if present) and or any other damage.
8. GFCI Ground Fault Circuit Interrupt
In the late 1990s GFCI type receptacles were required in all wet area. This includes within 72 inches from sinks and exterior outlets including in garages. Although these receptacles may not have been required when the home was built it will show up on the Home Inspection Report as a recommended upgrade. These receptacles generally cost about $20 each. You may want to hire an electrician or handyman to install the receptacles.
9. Excessive Storage
It is not uncommon to find a garage or room full of storage. Because the Inspectors can't see all areas of the room or garage (walls, floors etc.). Be sure locks are off all electrical panels or sub-area doors and that all sub-area and attic access doors are accessible. They will recommend a re-inspection if they're not. This can cost the seller of the home extra money if the inspectors have to come back.

More things to do to get ready: If the house is vacant, be sure that all utilities are left on for the inspection. Repair any broken screens or windows, and check the windows to insure that they open and close easily. Check for ripped foundation and attic vents. Make sure that light fixtures are working, and replace burned out bulbs. Patch holes in walls and ceilings. Repair any plumbing leaks, and replace missing caulking in bathtubs, sinks and shower pans.
This may sound like a lot, but a little work up front can avoid big problems later.

Is There ANY Good News?

Reading the newspaper has become a trial for me in the last week. The stock market drop, the demise of Countrywide Financial (and its takeover by B of A), the devaluation of the dollar, and now the state of California's economy...all of these make me want to hide my head in the sand for a couple of years. Will there really be a recession, and just how severe will it be? Will we finally see repercussions in our Sunnyvale-Cupertino "Real Estate Oasis"?
According to Leslie Young, chief economist for the California Assoc. of Realtors, the areas being hardest hit in California are the outlying areas where there has been overbuilding. The resale market in California’s major markets will continue to be strong. In fact, the closer you are to a metropolitan area, the better the sales are. In the million-dollar plus price range, there has been essentially no change from 2006 to 2007. Let's hope that this trend can continue in the future.

Why Monte Vista High is Special

The speaker at our local Realtor's tour meeting yesterday was April Scott, the principal at Monte Vista High School in Cupertino, a very impressive but approachable woman.
There are 6 area high schools listed in US News & World Report as being among the top 100 high schools in the country. They are, by ranking:
# 49 Mission San Jose High
# 59 Monte Vista High
# 66 Henry Gunn HS
# 72 Saratoga HS
# 73 Lynbrook HS
# 85 Palo Alto HS
Monte Vista has a reputation as being particularly strong in math and the sciences, but she made it clear that their true emphasis is on the student "as a whole person." For that reason, they solicit parental and student support for athletic, music and art programs...they even have a wood shop! Despite recently completed new construction, the school still has attendance beyond capacity. Ms. Scott promised that through strict enforcement of area attendance rules, they will still be able to accommodate all students who live in the district.

The Craftsman Home

Clients that I am working with lately are especially attracted to older traditional homes, especially in the Naglee Park and more attractive areas of downtown San Jose.
A summer afternoon spent in a porch swing, or a winter Saturday spent sketching in the living room, warmed and brightened by big sunny windows. This is the lifestyle
of the Craftsman style house, part of the early 20th century arts and crafts movement.
In every city, especially in established neighborhoods, you’ll easily find many examples of Craftsman homes. Still a very popular home style, this style home is known for its attention to detail. You’ll find lavish use of natural materials such as lovely woods in the many built-in cabinets throughout the house. Outside, the large inviting porch (a signature element of the Craftsman style), is often supported by triangular columns, built of stone.
The Craftsman style home usually features a half story room built into the high sloping roof, but could also feature a second story, set into the roof and set off by dormers.

The Silicon Valley Phenomenon

I'm still seeing mixed forecasts for the year to come...anywhere from predictions of a full blown recession to the opinions of Alan Nevin, chief economist for the California Building Industry Association, who expects the construction of new homes to increase slightly this year, and says "The economic basics of the state remain strong." But even he hedges his bets. He called the foreclosure rate in California a short term phenomenon that isn't as severe as in many other states, but he said that if consumer confidence worsens and interest rates rise substantially "that would put a damper on my cautious optimism."
Maybe I'm being a Pollyanna, but I prefer this quote from Paul Erdman: " Silicon Valley is the economic engine that drives California...and California is the engine that drives America, and America is the engine that drives the world! I've always admired the late economist, Joseph Schumpeter, and he said, "You create wealth by combining three things: Technological Innovation, Venture Capital, and Entrepreneurship. Well, Silicon Valley is the classic example of that. It all starts right there!"

Walkable Communities

A client recently thanked me for the link to Walkscore because they hope to buy in an area that encourages walking. High energy costs are making Americans think twice about rampant development, and they want their communities to be less dependent on cars. The National Association of Realtors and Smart Growth America recently conducted a survey of 1000 U.S. adults. Asked to select the best ways to reduce energy use, more than 80 percent said that they favor building communities so that people can walk more, and the same percentage preferred redeveloping existing areas to building new ones. In a similar vein, 75% said that the cure for escalating traffic problems isn't more roads, but walkable communities and more public transit choices.
On the heels of the survey comes an engaging new book by Chris Leinberger...The Option of Urbanism:Investing in a New American Dream. He talks about the growing demand for walkable communities, and describes the zoning and other policy changes we would need to get there.

What's Hot...What's Not

Watching the trends can be fun. In housing, as in fashion, things are always changing, and it's fun to watch...although I don't jump on every style or decorating bandwagon. I stick with classics and comfort.
Anyway, for 2008: Cozy small houses on a big lot are in, McMansions are out. Earth colors...brown, green...as well as handmade accessories are in, the cold look of modern is out. Informal living spaces like an oversized family room and an open kitchen are in, formal dining rooms are out. Exotic hardwood floors like bamboo and Brazilian cherry are in, carpeting is out. Mudrooms with cubbies, chests, and benches are in, leaving all the junk in the foyer or coat closet is out. Marble, limestone or concrete kitchen countertops are in, marble is out.
And anything "Green" will be in this year...from building materials to energy efficient appliances.

Preventing Dryer Fires

My relatively new Maytag dryer is taking longer and longer to dry a load of clothes. I strongly suspect a clogged vent, and called a dryer vent cleaner that I found in the yellow pages. The service isn't cheap, but can you really put a price on peace of mind?
FEMA keeps statistics on clothes dryer fires. There are about 15,600 of these fires each year in the US (42.7 every day) with an average loss of $8,900 each.
Most dryer fires can be prevented by cleaning the lint from the duct and the bottom of the dryer.
If you are a "do it yourselfer," at least once a year, pull out the dryer, disconnect the duct, remove as much lint as you can easily from the duct and the duct connector on the back of the dryer, and vacuum out the rest. Do this on the other end of the duct (at the register to the outside) as well. In some dryers, lint accumulates in the bottom of the dryer, too. To remove lint from this space, remove the bottom kick plate, clean it out, then vacuum.
It's a small task that can make a huge difference.

A New Take on the Old Caucus

First of all, when Mike Huckabee made a strong showing in Iowa yesterday, I realized that I needed to add his take on taxes and property to the mix. The tax plan Huckabee has proposed, called the "FAIR tax," would eliminate federal income and investment taxes and replace them with a 23 percent federal sales tax. The poor would pay no net sales tax up to the poverty level, and every household would receive a rebate equal to sales taxes paid on essential goods and services.
Getting back to the caucus system itself, I loved Anna Quindlen's analogy in the December 24 issue of Newsweek. She said " Every once in a while you see a Frankenstein monster of a house on a suburban street. The original structure might have a bumped-out second story too heavy for its foundation, an addition that looks tacked on, a sunroom around back meant for a different place entirely. And that's before you even get to the gazebo. From a common sense standpoint, the whole thing is a mess"
She goes on to say, "That's the equivalent of the American election system, at least if you add a couple of cars on cinder blocks in the side yard."..."The Iowa caucuses are like evening coffee klatsches with a serving of trigonometry."
If you'd like to read her Last Word column in full, it's a great take on our mixed up electoral system, and some possible solutions.

Bobbie's Caucus 2...What Do They Say About Real Estate?

Today. I'll cover the Republican candidates. The top GOP contenders are competing for recognition as tough tax cutters and budget balancers...but they would leave it to market forces to fuel economic development and solve the subprime mortgage crisis. They are generally unified in their belief that fiscal discipline and low taxes are crucial to maintaining the low-interest rate environment that underlies healthy real estate markets.
Rudy Giuliani would make President Bush's tax cuts permanent, would eliminate the estate tax, and index the Alternate Minimum Tax to inflation.
Mitt Romney suggests zero taxes on investment for households making less than $200,000 a year.
Fred Thompson goes even further. He would dissolve the IRS in its current form and "create a new tax code based on simplicity, fairness and economic growth."
John McCain says that he would prohibit government from taking property for economic development, and that he would appoint judges who take a strict constructionist view of private property rights. Most amazing of all...he pledges to balance the federal budget.

Bobbie's Caucus...What Do They Say About Real Estate?

Today, I'll cover the leading Democratic candidates, and tomorrow I'll give equal time to the Republicans.
In general, the Democratic contenders agree on restoring fiscal discipline to the federal budget, but they also favor bolstering development and addressing the aftermath of the subprime mess.
Hillary Clinton's positions: Provide $1 billion to states to help borrowers avoid foreclosure, and provide an additional $1 billion to support state and local affordable housing trust funds. She's also pushing for higher FHA loan limits to maximize borrowers' refinancing options.
Barack Obama's Goals: Strengthen detection and punishment of mortgage fraud, create a White House Office of Urban Policy to improve delivery of federal funds to urban areas, and channel a portion of Fannie Mae and Freddie Mac profits into a national affordable housing trust fund.
John Edward's ideas: Create a fund to help homeowners to renegotiate subprime loan terms, move subsidized renters out of concentrated housing by adding a million new rent-subsidy vouchers, and give households a tax credit for every dollar they save (up to $500 annually) to help spur home ownership.

New Year's Resolutions

I thought that I'd treat today as a "non-working Sunday" and spend time with the newspaper and breakfast...a mistake, as all the columns looking back at 2007 and making predictions for 2008 were unanimously negative in tone and substance. I should have gone for a long walk, instead.
Despite all the naysayers, I'm excited to see what the New Year will bring.
Money Magazine did a poll recently, asking readers what their top financial goals were for 2008. Their resolutions were: Pay Down Debt...33%, Save for Retirement...23%, Build an Emergency Fund...11%, and Buy Real Estate...11%. Of these, one in three think they'll definitely achieve their top financial resolution, but 51% think that they may not have the money to make it happen.
What about you? What are your goals for the New Year, and how will you go about reaching them?