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Update 12/3/12: Classics at Station 361 announced last week that Phase I featuring 29 beautifully-appointed homes is sold out.  With sales starting at the end of June, the sales absorption rate was just under 1.5 homes per week.  Homebuyers started moving into their new homes in September, so Classics at Station 361 is starting to look like a neighborhood with residents enjoying the community amenities.  Look for announcements regarding Phase 2 in the New Year.  The 36 homes in Phase 2 are sure to be as popular with homebuyers as Phase 1.  Be sure not to miss this great opportunity to own a new home close to downtown Mountain View.

Update 10/4/12: Of the 65 29 phase 1 homes that were made available at Classics at Station 361 only four properties are remaining on market as of October 4, 2012. You can view our Station 361 review on 1SiliconValley.com. Keep reading to learn more about each of the available remaining homes:

Single Family Home # 19 – Plan A
Model Home – $50,000+ in Upgrades
2 Bedrooms + Den / 2 Bathrooms (view the floor plan)
Approx. 1,074 sq. ft.
Price: $910,900

Single Family Home # 23 – Plan B
4 Bedrooms / 3.5 Bathrooms (view the floor plan)
Approx. 1,764 sq. ft.
Price: $1,099,900

Single Family Home # 12 – Plan D
Model Home – $60,000+ in Upgrades
3 Bedrooms / 3.5 Bathrooms (view the floor plan)
Approx. 1,748 sq. ft.
Price: $1,200,900

Single Family Home # 17 – Plan C
Wrap-around balcony and parkside location
4 Bedrooms / 4 Bathrooms (view the floor plan)
Approx. 1,744 sq. ft.
Price: $1,249,900

Contact Alex H. Wang if you’d like more information and/or to set-up and showing.

Now take this same lesson – you only have one chance to make a first impression – and apply it to a home for sale. I ran across the perfect scenario to illustrate my point while showing properties recently.

The first thing we noticed upon arrival at House #1 was that the lawn needed to be edged, watered and mowed. The rest of the landscaping continued with this unkempt look. The home’s exterior was in good shape with the exception of some peeling paint on the front door. Clutter, personal photos, Victorian decorating, and the leftover onion smell from last night’s dinner greeted us once we entered the home. Moving through the living areas to the bedrooms, we noticed that yesterday’s clothes hadn’t made their way completely into the hamper.

A neatly manicured green lawn greeted us as we arrived at House #2. The landscaping shrubs and plants were well-trimmed, and the flower beds were freshly weeded. The rest of the home’s exterior was in good shape and the front door had been recently painted. The interior of the home was light and refreshing. Soft music was playing in the background, and there was no perceptible odor in the home. There were no clutter or personal photos anywhere – you could barely tell that anyone lived in the home.

Based on their first impressions, my buyers decided to purchase House #2 even though it had a higher asking price. When asked why, the buyers cited that House #2 felt more comfortable whereas House #1 simply felt like a lot of work. In other words, they could envision themselves living in House #2 in its current state whereas they would need to update House #1 to make it feel like theirs.

What does this all mean to you – the home seller? First, it means that you need to get your home into top shape by painting, cleaning, and repairing or replacing things that are broken. Make sure your landscaping is neat and there are colorful flowers growing. Beautiful landscaping enhances the home’s curb appeal and entices people to see the home’s interior. ‘Curb appeal’ may seem cliché in concept but it is as real now as it’s ever been.

Secondly, you need to realize that once your home goes on the market, it is as if the home is no longer yours. Homebuyers are trying to envision themselves in various homes and a more neutral home will allow them to do this easier. There are several ways to make your home neutral – paint color and decorating style being the easiest. Another item that focuses the home buyer’s attention on the home itself is the removal of personal photos. The buyers will spend more time looking at your home’s features rather than curiously viewing the photos.

The final key to presenting your home well is ensuring its tidiness on a daily basis. Put away the clean dishes and load the dirty dishes into the dishwasher. Make sure the beds are made and the dirty clothes are in the hamper. Remove all bathroom items from the shower and countertop, and hang new, clean towels on the towel bars. Clean up and put away the kids’ toys. I won’t argue that doing all this every morning while trying to race out the door is a real pain. I will argue that it is a must since you never know when someone is going to look at your home. Remember, while selling your home, you are working on the buyers’ schedules not yours.

In the end, if you take the time and do these extra chores, your home will most likely sell faster, and depending on the market, at or above listing price (sometimes substantially). And that is the ultimate goal.

Related:
Home seller blog posts
Top 10 Ways an Agent Can Sell Your Home for the Highest Price
Why Your Home Will Sell Faster, For More Than the One Next Door 

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[Updated 12/13/2012] The Estates at Sunnyvale by Toll Brothers has opened its Sales Center and model homes. Located at 700 Timberpine Avenue in Sunnyvale, the Sales Center is open Thursday through Monday from 11am to 6pm.  Model photographs are now up on the Toll Brothers website if you would like to preview them from the comfort of your home. Homes are priced from the $1.3 million.

Sunnyvale has long been known to offer homebuyers the best value for their money in the Bay Area. It is now seeing a renewal by way of several new home communities under construction. The Estates at Sunnyvale by Toll Brothers will join this renaissance when the new home community opens its doors soon.

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Located at the intersection of Lily and Timberpine avenues just west of Lawrence Expressway, The Estates at Sunnyvale is located in the Ponderosa Park area of Sunnyvale. This part of Sunnyvale is conveniently located near Lawrence Expressway, and highways 101 and 237. Additionally, the population of the Ponderosa Park neighborhood is largely Asian which explains why Toll Brothers interestingly offers a community brochure in Chinese.

The Estates at Sunnyvale will offer homebuyers 51 elegantly-appointed new homes ranging in size from approximately 3,071 to 3,102 square feet on homesites averaging approximately 6, 000 square feet. All three home designs feature four bedrooms and 2.5 baths plus an option to add an additional downstairs bedroom and bathroom perfect for guests and multi-generational families. Prices are anticipated to start from the low $1,000,000s.

We will be updating this post as The Estates of Sunnyvale opens its doors and starts selling. Check back soon for more information.

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Classics at Station 361 is the latest new home community in Mountain View. With models open for only two months and 13 of its 65 homes sold in just three sales releases, Classics at Station 361 has become an instant hit with homebuyers.

Classics at Station 361 has the three L’s going for it – location, location, location. Station 361 is centrally-located in Mountain View which, according to BusinessInsider.com, is one of The 15 Hottest American Cities of the Future – Mountain View will continue to lead as a tech city. Home to such big tech names as Google and Microsoft, Mountain View is sure to stay on the cutting edge of technology for years to come.

Access to the rest of the Bay Area and beyond is a cinch with the Mountain View Transit Center conveniently located just across the street. The Mountain View Transit Center offers residents quick, easy access to anywhere in the Bay Area via the Tasman Corridor Light Rail line, CalTrain, VTA buses, and paratransit in a pedestrian-friendly atmosphere. If you prefer to drive your car, Station 361 offers easy access to highways 101, 85, Central Expressway, and El Camino Real.

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Within walking distance of Station 361 is Castro Street in downtown Mountain View. Castro Street is a gathering spot for locals because of its many restaurants, pubs, and shops. The Mountain View Performing Arts Center can also be found on Castro Street. Located in the Caltrain station parking lot every Sunday, residents of Station 361 can walk to one of the Bay Area’s largest year-round farmer’s markets. There are also many outdoor recreation areas within walking distance including Pioneer Park, Mercy-Bush Park, and the Stevens Creek Trail & Bike Path.

There is no doubt that Station 361 has a smashing location; now let’s talk about the community and its beautiful homes. This community will offer 65 homes – 45 detached homes and 20 townhomes. The 20 townhomes are arranged in four, three-story buildings that front W. Evelyn Avenue, while the 45 detached homes form the community’s interior that is bounded by Del Real Avenue, Villa Street, and Calderon Avenue. Also located in the middle of the community is common open space which includes shade trees, seating, a barbecue area and a children’s tot lot.

The townhomes feature two floorplans, each offering 3 bedrooms and 3.5 baths with approximately 1,700 square feet. Both floorplans feature a first-floor bedroom with en suite bathroom perfect for extended family or a home office. Five floorplans are offered for the detached homes. They range in size from approximately 1,074 to 2,439 square feet, and feature 2-4 bedrooms and 2-4 bathrooms plus flex space such as a den or loft (per plan) in two- and three-stories.

When it comes to in-home amenities, the homes at Station 361 are designed with you in mind. The homes feature private outdoor living space, fine hardwood cabinetry, and interior laundry rooms or closets (per plan). The kitchens feature granite countertops, hardwood flooring, gas range/oven, and double stainless-steel sink with garbage disposal standard. The latest in energy-efficiency and media wiring can be found in the homes as well. As is fitting for homes located in a city that offers free city-wide Wi-Fi, all building systems have the ability to be controlled via iPad.

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What is a 1031 Exchange you may ask? A 1031 Exchange allows investors to ‘exchange’ ‘like-kind’ properties rather than sell them through the use of a Qualified Intermediary who holds the sale proceeds from the first property until a replacement property(ies) can be purchased within a very specific, non-extendable time period. Let us walk through the salient points of this description one-by-one so that we can get a better understanding of the 1031 Exchange requirements.

A transaction is considered an exchange rather than a simple sale when the seller expects to acquire a replacement ‘like kind’ property. That means that if you are selling an investment property, you must state that you plan to acquire replacement investment property(ies) within a specific time frame. A special note, acquiring investment property outside of the United States in exchange for investment property within the United States is not considered ‘like-kind.’

When you acquire the replacement property(ies), you must roll all the net proceeds from the first property into the replacement property(ies) or you will be taxed on the unused proceeds. Additionally, the value, equity, and debt on the replacement property(ies) must be equal to or greater than the value, equity, and debt on the relinquished property.

You may choose one or more replacement properties to replace your relinquished property though you do need to satisfy one of the following requirements:

1. Three-Property Rule – Up to three potential replacement properties may be identified regardless of their value.
2. The 200% Rule – Any number of properties may be identified as replacement properties as long as their value does not exceed twice the value (200%) of the relinquished property.
3. The 95% Rule – The taxpayer may identify any number of properties for exchange but you must acquire 95% of the aggregate Fair Market Value (FMV) of all identified properties by the end of the exchange period. Put another way, in order for the exchange to be valid, 95% (or all) of the identified properties must be purchased.

The timeline (wiki link) for a 1031 Exchange is very specific and does not afford anyone room for error. Firstly, you must identify the property for exchange in writing, signed by you , and delivered to an independent party, i.e. a Qualified Intermediary, prior to the closing of said property. After closing, the countdown begins. First, you enter the Identification Period in which you have 45 days to identify the replacement property(ies). Secondly, you must acquire the replacement property(ies) within 180 days of closing commonly referred to as the Replacement Period. One must note that the Identification Period and Replacement Period overlap and both begin with the closing of the relinquished property. These two time periods must be strictly adhered to and are not extendable even if the 45th or 180th day falls on a weekend or holiday.

To facilitate the exchange transaction (wiki link), a Qualified Intermediary (QI) must be used. Your relationship with the QI generally begins when you identify the property for exchange. Of course, there are several rules by which you must abide when choosing a QI. The QI may not be related to you or have had a financial relationship during the two years preceding the property exchange. In other words, your current attorney, CPA or real estate agent may not act as your QI.

The Qualified Intermediary preforms three functions during the exchange. They acquire the relinquished property and transfer ownership to the buyer. The QI then holds the sale proceeds , thereby preventing you from having actually realized any funds from the sale of the relinquished property. The QI then acquires the replacement property(ies) and transfers it to you within the time limits to complete the exchange.

Interestingly enough, there are some situations where you can combine the 1031 Exchange with the Internal Revenue Code Section 121, which allows a married couple to exclude up to $500,000 of gain on the sale of their personal residence. In order to use both the 1031 Exchange and Section 121 in tandem, you must comply with all the rules in both sections, with Section 121 regulations applied to gain before applying the 1031 Exchange regulations. Revenue Procedure 2005-14 explains how the two statutes may be combined for one property.

As with any tax legislation, there are numerous rules and regulations that you must follow – more than I can possibly cover well in this article. I strongly recommend that you consult a tax attorney or CPA before deciding to embark upon a 1031 Exchange or a Section121/1031 Exchange combination. For more information on 1031 Exchange, please visit www.1031.org.

I know what you’re thinking, “Home sellers have the advantage in a bidding war.” Yes, home sellers currently own the home on which the potential homebuyers are trying to outbid each other. But, it isn’t always the highest bid that gets the home. I cannot count the number of home purchases in which I have been involved where a lower bid is awarded the contract because of other favorable contract conditions. Being a well-prepared homebuyer is the key to positioning yourself in the best light when it comes to a bidding war.

Back in 2008, I wrote an article entitled ‘Winning the Bidding War’ in which I explained two of my winning strategies to help buyers win the bidding war – be the last presenter and bring the clients to the bid presentation. Those two strategies have helped me produce many winning bids for my clients over the years, but they focus solely on what happens at the presentation table. The choices and preparation that proceed the bid presentation are just as important, if not, more important.

Being a well-prepared homebuyer starts when you begin your home search and you choose a real estate agent to represent you – commonly known as a buyer’s agent. When you start looking at home listings on any internet site, such as Redfin, Zillow, or MLS Listings, you will notice that the same agent names keep showing up over and over again. These are the top producing local agents for the area, and you should choose one of them.

Again, I know what you’re thinking, “My relative/friend is a good real estate agent. I’ve used Bob Agent before. They’ll represent me better than any local agent.” I’m sure these agents are good agents in their market. But unless they are a good agent in the market where you are now conducting your home search, you will be better off choosing a good local agent that has intimate knowledge of the local market.

There are several reasons why a good local agent may help you win the bidding war. Local agents will bring in-depth knowledge of the local market, and all its nuances and expectations. I have seen contracts not be considered for many reasons, some as trivial as the wrong boxes being checked.
Secondly, a good local agent has a reputation in their local market and that reputation may put the seller’s agent at ease. In a high demand market, home sales happen quickly, and the seller’s agent will want to know that this transaction will be completed efficiently and on time.

Once you have chosen a good local agent and found a home on which to bid, the second step to becoming a well-prepared homebuyer is to know everything you can know about the property condition. A good local agent should help you complete this due diligence ( they might even have represented a previous buyer or seller on this exact property). A good local agent will get all the disclosure packages and inspection reports from the seller’s agent for you to review ahead of time. They should also research the permit history of the home in the County records. And, they should complete comparable (comp) reports – Homes for Sale, Homes Pending, and Homes Sold – to review together so an educated decision can be made regarding offer price.

All this up-front research will lead to good terms on the offer with little or no contingencies. This is a win-win for everyone. The buyers know the condition of the property as much as possible and the sellers have a pending sale that will not cancel.

Remember, in bidding wars, it usually comes down to the little details that make or break the sale. Stack the odds in your favor by doing everything you can to make yourself a desirable homebuyer.

Related: ‘Winning the Bidding War’

The MSI and DOM for Palo Alto are shown on the chart above.  The DOM has seen a mostly downward trend since May 2010 without large cyclical changes.  For the most part, the level of inventory has been decreasing since May 2010 with a slight uptick in the last couple of months.  Inventory supply is currently sitting at just over one month.

From May 2010 to May 2012, the sales absorption rate has been steadily increasing.  In May 2012, the current sales absorption rate was 43.5% of properties under contract and 39.0% of properties sold.

Palo Alto’s median price only dipped slightly in late 2010/early 2011, then saw an early start to its upswing in July 2011 as opposed to the September 2011 upswing start in the Mountain View, Los Altos, and Los Altos Hills.  As far as price, Palo Alto’s continuing median price increase is the most consistent of Mountain View, Los Altos, and Los Altos Hills ending in May 2012 at $1,654,500.

Due to its higher median price range of $2,376,000, the inventory levels of Los Altos Hills fall into that of a more balanced market, and even at times a buyer’s market.  The May 2012 level of inventory is currently sitting at 2.5 months which is a drop of almost five months from April 2012.  The DOM for Los Altos Hills is not cyclical like Mountain View or even Los Altos due to the extremely high price range and more exclusive properties.

 The chart above reveals that the sales absorption rate for Los Altos Hills was unsteady between May 2010 and May 2012.  The fluctuations such as this are to be expected at this more exclusive price range.  In May 2012, the current sales absorption rate was 27.3% of properties under contract and 10.4% of properties sold.

The median sales price line for Los Altos Hills more closely follows the line of Mountain View with a slight uptick in late 2010 and a dip until September 2011.  At that point, the uptick pace for Los Altos Hills more closely follows the pace of Los Altos.

The chart shown above graphs the MSI as well as the DOM for Los Altos.  The chart indicates greater fluctuation in DOM statistics when compared with those of the Mountain View market though Los Alto does still follow the seasonal real estate cycles.  Currently, the DOM is between 20 and 30 days, and the level of inventory is currently sitting at just over one month.

As with MSI, the sales absorption rate has also been fluctuating a bit more when compared to Mountain View though it has been trending upward overall from May 2010 to May 2012.  In May 2012, the current sales absorption rate was 46.3% of properties under contract and 40.7% of properties sold.

The median price in Los Altos is showing a healthy, and likely sustainable, upward trend over the last two years.  When discussing Mountain View, Los Altos, Los Altos Hills and Palo Alto, Los Altos is the only market that did not see a dip in late 2010/early 2011. Since September 2011, this upward trend has become a bit more pronounced with the median price in May 2012 being $1,786,500 which is more than $300,000 higher than May 2010.

The chart shown above graphs Mountain View’s MSI as well as the DOM.  Traditionally, DOM is cyclical in nature decreasing in the spring and summer, and increasing in the fall and winter, and the Mountain View market is no exception.  For the most part, the level of inventory has been decreasing since May 2010.  It is currently sitting at an astonishing low inventory level of .5 months.

As you can see by the chart above, the sales absorption rate in Mountain View has been steadily increasing from May 2010 through May 2012.  In May 2012, the current sales absorption rate was 64.6% of properties under contract and 54.6% of properties sold.

Over the course of the last two years, Mountain View had a swing in median price of about $200,000 as shown in the above chart.  The solid line showing average median price  has been relatively stable with a slight dip in late 2011.  Since February 2012, Mountain View has seen a stable median price just over $750,000.

Days on market (DOM) describes how long a home is active on the market before its status changes to pending.  The average days on market is determined by adding each listing’s days on market in a month, then dividing by the number of active listings for sale at the end of that month.

Month’s supply of inventory (MSI) is an estimation of how long it will take all the homes on the market to be sold.  It is based on the current number of homes for sale and the past absorption rate.  MSI is used to determine if the market is considered a seller’s market, a balanced market, or a buyer’s market.  Though opinions vary, 0-4 month’s supply of inventory is considered a seller’s market, 4-6 months is a balanced market, and anything over 6 months is considered a buyer’s market.

Sales absorption (SA) rate is a percentage rate that shows the ability of the real estate market to sell, or absorb, all the homes for sale (inventory) currently on the market.  It is calculated by dividing the number of homes sold in a month by the number of homes for sale at the end of that month.  A higher percentage rate means that the market is absorbing its inventory at a faster rate.

Median sales price is the middle price where half the homes were sold above this price and half were sold below this price.  The median sales price is considered less biased than average sales price since a small number of high priced homes won’t weigh as heavily on the outcome.  Since it is important to know specifics about the homes that make up this number (i.e. number of homes sold in a month, type of home sold), this number is just another piece of the formula.

Now that we have defined the key statistics, let us see how they relate specifically to the housing markets in Mountain View, Los Altos, Los Altos Hills, and Palo Alto.

Mountain View Market Analysis – May 2010 to May 2012
Los Altos Market Analysis – May 2010 to May 2012
Los Altos Hills Market Analysis – May 2010 to May 2012
Palo Alto Market Analysis – May 2010 to May 2012 

In the Silicon Valley (Santa Clara County) the median sales price for all homes was $460,000, a 2% drop from the same period last year. But looking at resale homes, we saw a 1.9% increase to $529,000. Looking at number of home sales in the area, there were 1,424 sales for all homes, a drop of 10.9% from last year; in resales, 987 sold, which was 5.6% less than last year. We’ll soon see in the spring and summer months of 2011 if it picks back up, when the majority of sellers and buyers are on the market.

Overall, Los Gatos Los Altos zip code 94024 had the highest median sales price of $1,569,000, but Palo Alto/East Palo Alto zip code 94303 had the highest $/SqFt at $883. On the other side of the scale, San Jose zip code 95133 had the lowest median sales price at $230,000, and Gilroy zip code 95020 had the lowest $/SqFt at $195.