An interesting quote from President Theodore Roosevelt:                                            

“Every person who invests in well-selected real estate in a growing section of a prosperous community adopts the surest and safest method of becoming independent, for real estate is the basis of wealth.”

 What was true at the beginning of the last century is still true today.

Average days on market are about the same for the past 18 months, just a 2% increase.

I’m seeing more buyers in the Greater Walnut Creek real estate market.  This holds true for most price ranges.  There is definitely an increase in the first time buyer markets in both single family and multifamily.

Of these sales, the list price ranges were:

Less than $200,000 = 5 sales (14% of total)

$200,000 - $500,000 = 13 sales (36% of total)

$500,000 - $800,000 = 16 sales (44% of total)

$800,000 - $1,200,000 = 1 sale (3% of total)

$1,200,000 - $2,000,000 = 1 sale (3% of total)

This is the first week in quite a while that the number of active listings rose and the number of pending sales dropped.  As of July 12, 2009, there are 333 residential (single family homes and condos) listings active on the market in Morgan Hill, San Martin and Gilroy.  There are currently 357 pending residential listings.  Therefore, 52% of the total listings are pending under contract as of this date.  However, many of the pendings are short sales and therefore take a long time to close.  This keeps our pending percentage up artificially high. 

Twenty-three residential real estate listings closed escrow during the past week in the south county towns of Morgan Hill, San Martin and Gilroy.  If homes continued to sell at this rate it would take 14.5 weeks to sell all south county listings.  Therefore, as of this past week, we have 3.6 months supply of inventory. 

Tune in next week for an update on the number of sales in South Santa Clara County!

Here in Los Altos, the market has really picked up starting in early May. Consumer confidence came back as the stock market rallied, the sun came out, flowers bloomed and sellers got more realistic about pricing. Buyers responded by buying up homes faster than they are coming on the market, mopping up inventory.

In June, there were more homes in contract in Santa Clara County than were for sale. The majority are under $500K, but the buying frenzy has moved into the mid-priced homes up to $1.5M. Buyers are finding themselves in multiple offer situations in some cases, with a homes in Los Altos and Palo Alto occassionally receiving over ten offers. . . . What year is it again?!?

Even this new market activity is being regulated by loan availability. I wish I could remember the name of the banker who said that “the lending pendulum has swung to stupid” last week. He is in Nebraska and was saying he can’t do loans now that his father would have happily done in the 1950’s. Home buyers in the dreaded jumbo market are having to provide tremendous documentation and larger down payments, which are softening the market with inflection points at $1.5M (20% down), and $2M (25% down). Over $2M, you need to bring $600,000 in cash, which is a decent chunk of change, especially if you are in the tech industry these days.

Yesterday, I had the pleasure of spending the afternoon at this lovely home in Oak Valley in Cupertino. It is a beautiful home with views and a sparkling pool, priced at $2,348,000. That is at the top of the Cupertino market, but upper-mid range for south Los Altos, which the neighborhood borders. I had plenty of company, as there were a lot of visitors, most of whom are in the market to buy a home, not looking for decorating ideas. The majority had seen the house online, so they knew the size and price before driving over.

Forecasts for the fall market are varying, at best. So don’t believe what you read in the papers, check with your local Realtor. Hopefully, rates will stay low, and we will see inventory continue to be absorbed.

Stay tuned, and thanks for reading . . .

new listing      1958 Oak Cir, $1,200,000, 3 br 2 ba, 1,666 SF

new pending    

new sold           1510 Yountville Cross RD, $2,540,000, 4 br 4 ba, 3,417 SF

new expired    

withdrawn       

average prices, days on market                  

current listings for sale    29   avg price  $960,309; avg days on market 172

current sale pendings          1   avg price  $898,000; avg days on market 60

sold in last 6 months            6   avg price  $986,750; avg days on market 125

new listing 4, sale pending 1, sold 1, expired 0, withdrawn 2

new listing       1910 Silverado Trl, $399,000, 1 br 1 ba, 990 SF

                             1593 Arrowood Dr, $995,000, 3 br 3 ba, 1,811 SF

                             571 Stanton Dr, $2,275,000, 4 br 3 ba, 2,428 SF

                             196 Pratt Ave, $1,100,000, 4 br 4 ba, 2,991 SF

new pending  1151 Starr Ave, $755,370, 4 br 3 ba, 2,515 SF

new sold           990 Allison Ave, $650,000, 3 br 3 ba, 1,600 SF

new expired

withdrawn       1100 Paulson Ct, $835,000, 4 br 3 ba, 2,300 SF

                             915 Brown St, $975,000, 3 br 3 ba, 1,500 SF

current listings for sale  108   avg price $2,959,360; avg days on market 140

current sale pendings          6    avg price  $742,561; avg days on market 155

sold in last 6 months         22    avg price  $1,164,391; avg days on market 142

new listing 2, sale pending 1, sold 1, expired 0, withdrawn 1

new listing          1128 Denise Dr, $325,000, 3 br 2 ba, 1,331 SF

                                350 Dutch Henry Canyon Rd, $1,850,000, 4 br 2 ba, 2,000 SF

new pending      1607 Harley St, $299,000, 1 br 1 ba, 764 SF

new sold              1488 Fairway Vista Ct, $962,000, 3 br 2 ba, 2,207 SF      

new expired

withdrawn          1604 Fair Way, $775,000, 2 br 2 ba, n/a SF

current listings for sale    62   avg price  $1,770,573; avg days on market 181

current sale pendings        8    avg price  $1,000,238; avg days on market 212

sold in last 6 months         17   avg price  $601,353; avg days on market 167

There are several reasons the pending sales numbers are high but actual closed escrow numbers are not.  This was pointed out to me by a southern California colleague, Michelle Silverman, a Realtor in La Jolla, California. 

Michelle recently shared this Wall Street Journal blog post, Three Reasons Pending Sales Isn’t a Reliable Indicator.   The article discusses three reasons homes on the real estate market don’t close escrow after getting into contract.  One of the reasons is the one I state week after week, short sale pending contracts.  While the buyer and the seller wait for the seller’s short sale lender to approve the offer, the home sits in pending status on the multiple listing service.  Often the transaction falls through because the buyer gets frustrated with waiting for months and finds another home to purchase and sometimes the short sale lender does not approve the offer.

Another reason that homes under contract don’t close escrow is that mortgage rates have gone up, albeit a small amount.  However this raise in rates can knock out buyers who qualified at a certain interest rate when they first began their home search.  They aren’t able to go through with the purchase because now they don’t qualify for the higher monthly payment.  Buyers may also choose not to purchase due to the higher interest rates.

And the third reason pending sales don’t close escrow as discussed in the WSJ blog has to do with the latest difficulty besetting the real estate market:  appraisals.  There is a new law, The Home Valuation Code of Conduct, or HVCC, adopted May 1, 2009.  The law was formulated to elevate the independence and accuracy of the appraisal process.  To keep influence low, lenders are now required to use appraisal management companies.  In theory, this should be a positive move.  In actuality, many of the appraisers hired by the appraisal management companies don’t come from the area where the property is located and sometimes don’t even have access to the local MLS.   For example, I’ve heard of ill-informed appraisers using property sold in Gilroy as a comparable sale for property in Morgan Hill.  Some sales are falling through at the last minute due to under-valued appraisals.

Lawrence Yun, NAR chief economist, cautions that there could be delays in the number of contracts that go to closing. “Closed existing-home sales have improved but are coming in lower than expected because some contracts are delayed or falling through from the application of new appraisal rules for many transactions,” he said. “Rises in contract activity show buyers are becoming more active even as they face much more stringent loan underwriting standards. Speedy clarification of the appraisal rules could smooth a housing market recovery and support the overall economy.”

Of these sales, the list price ranges were:

$200,000 - $500,000 = 21 sales (64% of total)

$500,000 - $800,000 = 6 sales (18% of total)

$800,000 - $1,200,000 = 6 sales (18% of total)

As of July 5, 2009, there are 317 residential (single family homes and condos) listings active on the market in Morgan Hill, San Martin and Gilroy.  There are currently 370 pending residential listings.  Therefore, 54% of the total listings are pending under contract as of this date.  However, many of the pendings are short sales and therefore take a long time to close.  This keeps our pending percentage up artificially high. 

Twenty-one residential real estate listings closed escrow during the past week in the south county towns of Morgan Hill, San Martin and Gilroy.  If homes continued to sell at this rate it would take 15 weeks to sell all south county listings.  Therefore, as of this past week, we have 3.8 months supply of inventory. 

Tune in next week for an update on the number of sales in South Santa Clara County!

A combination of continuing low interest rates, rising consumer confidence ( we are getting used to bad economic news), and the closing window for tax incentives, is fueling the current buyer activity, so we will see how long this will continue. The state is running out of funds for it’s tax rebate, but the US government has the printing presses running to fund its programs.

The Anderson School of Business at UCLA released its latest report for the California economy last week, and senior economist Jerry Nickelsburg writes “there is nothing happening in California that will help pull the state out of recession in advance of the nation.”

“The dire conditions surrounding the state budget will contribute to prolonging tough conditions in California, according to the report.

Yet that the real risk for California, Nickelsburg writes, is the possibility that there will be no budget agreement at all and that the chaotic and inefficient spending cuts that would likely follow would have an even more severe impact on the ability of California to stem the downturn in economic activity this year.

Overall, the forecast for California is for a very weak first two quarters of 2009, to be followed by very little growth in the last six months of the year. The economy will begin to pick up in 2010 and return to more normal levels of growth in 2011.

The expectation is that total employment will contract by 3.5 percent in 2009 and will not grow in 2010. Once growth returns in 2011, it will rise at 1.8 percent.”

The high-end, over $3 million continues to lag, as usual, but the lack of stock profits and the international economic downturn has really depressed the market for luxury homes over $5 million. Two noteworthy listings in Portola Valley and Woodside really symbolize the luxury market currently.

1990 Portola Road in Woodside has been on the market for two months, and just was reduced from $12,500,000 to $8,500,000. That isn’t a mis-print. So much for the benefit of Larry Ellison living next door. . . . This could be an excellent opportunity for the right buyer. If you are interested, I’d be happy to show it to you.

In Portola Valley, 5070 Alpine Road is Portola Valley’s first REO property. Priced at $7,895,000, the bank is willing to provide attractive financing terms on a $1.2 million down payment. Again, I’d be happy to show it to you if you are interested and a $6.6 million mortgage doesn’t frighten you.

On to the numbers:

Atherton:

Currently, the Median Price of a Single Family Home in Atherton is $4,095,000 with a range of $1,075,000 to 16,800,000. 36% (versus 48% last month) of the homes in Atherton have had price reductions, as Sellers are accepting that the market has shifted, and the average number of Days on Market is 132 days versus 133 last month.

Menlo Park:

The Median Price of a Single Family Home in Menlo Park is $1,297,000. 39% (versus 38% last month) of the homes in Menlo Park have had price reductions, as Sellers are resisting that the market has shifted, and the average number of Days on Market has risen to 135 days from 127 last month. If you look at individual homes, the ones that are well prepared and marketed are still selling quickly, some with multiple offers, while those that are overpriced, or are less desirable due to location, odd floor plans or deferred maintenance issues are being passed over.

Palo Alto:

The Median Price of a Single Family Home in Palo Alto is $1,595,000. 41% (versus 41% last month) of the homes in Palo Alto have had price reductions, as Sellers are resisting accepting that the market has shifted, and the average number of Days on Market has fallen slightly  to 96 days from 99 last month.

Sales Under  Contract per MLS: 

Jan 09 - 3
Feb 09 - 0
March 09 - 3
April 09 - 4
May 09 - 4
June 09 - 8

One reason for this is that sellers now realize that our current economic situation is not a quick fix and the solution to getting on with their lives is to understand their goals - as a first step.  Once they understand their goals, if one of the action items includes selling a property, they are doing what it takes to sell it – preparing it, pricing it properly, and presenting it as best they can.  Buyers, too, are realizing that even in a declining market, the best and most unique properties will not last.  We’re moving to a phase where buyers and sellers are coming to the table more prepared, resulting in more sales going into contract.  Even though Lower El Granada is a small market, this activity is consistent with other markets in which I’m working now.

In my opinion, the most notable new listings within the last month in lower El Granada are:
179 West Point - a waterfront home in the Princeton Harbor area.
*523 Francisco St - a lot of house for the money plus tons of charm and character.
(*full disclosure:  this is my listing)
779 Palma St - a cute small house on a large lot with potential. 

What makes Lower El Granada so special?  Location. Location. Location.  Half way between Half Moon Bay and Montara on the mid-coast in the heart of Daniel H. Burnham’s unique design in the early 20th century.  Also located in the local “coastal sunbelt”.  Quaint neighborhoods and streets with mature trees and some ocean views.  Close proximity to the beach, Princeton, Pillar Point Harbor (where many people drive for miles to pick up fresh crab), close proximity to Cafe Classique, and great restaurants and the new Harbor Village, close proximity to the Coastal Trail, and much more.

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new listing      

new pending    

new sold           35 Forrester Ln, $675,500, 2 br 2 ba, 1,069 SF

new expired    

withdrawn       

average prices, days on market                  

current listings for sale    28   avg price  $954,963; avg days on market 171

current sale pendings          1   avg price  $898,000; avg days on market 53

sold in last 6 months            5   avg price  $676,100; avg days on market 88

new listing 7, sale pending 1, sold 1, expired 3, withdrawn 2

new listing       1111 Oak Ave, $685,000, 4 br 2 ba, 1,668 SF

                             1151 Starr Ave, $755,370, 4 br 3 ba, 2,515 SF

                             1788 Sulphur Springs Ave, $1,150,000, 3 br 3 ba, 2,474 SF

                             1590 Chablis Cir, $1,495,000, 3 br 2 ba, 1,936 SF

                             1122 Victoria Dr, $1,500,000, 2 br 2 ba, 1,591 SF

                             1444 Adams St, $1,845,000, 3 br 2 ba, na SF

                            989 Greenfield Rd, $6,796,000, 2 br 3 ba, 2,528 SF

new pending  1390 Silverado Tr, $1,120,000, 3 br 2 ba, 2,026 SF

new sold           1745 Stockton St, $1,600,000, 3 br 2 ba, 2,000 SF

new expired    1375 El Bonita Ave, $739,000, 3 br 2 ba, 1,841 SF

                             121 Knoll Pl, $2,500,000, 4 br 5 ba, 2,499 SF

                             100 Pratt St, $8,500,000, 3 br 3 ba, 3,400 SF                              

withdrawn       1236 Sylvaner Ave, $987,500, 4 br 3 ba, 1,873 SF

                             391 Crystal Springs Rd, $5,500,000, 3 br 3 ba, 3,552 SF

current listings for sale  105   avg price  $2,939,174; avg days on market 134

current sale pendings          7    avg price  $862,000;  avg days on market 147

sold in last 6 months         22    avg price  $1,188,818  avg days on market 139

new listing 2, sale pending 4, sold 0, expired 5, withdrawn 0

new listing          1601 Cedar St, $1,150,000, 4 br 2 ba, 1,916 SF

                                1102 Pine St, $1,395,000, 7 br 6 ba, n/a SF

new pending      2429 Debbie Way, $339,000, 3 br 2 ba, 1,361 SF

                                1300 Cedar St, $789,900, 5 br 6 ba, 3,959 SF

                                4020 Silverado Tr, $999,000, 3 br 2 ba, n/a SF

                                2375 Pickett Rd, $4,495,000, 3 br 5 ba, 6,006 SF

new sold                    

new expired       1906 Carli Dr, $699,000, 3 br 2 ba, 1,509 SF

                                1403 Greenwood Ave, $1,485,000, 2 br 2 ba, 1,742 SF

                                2054 Grant St, $1,500,000, 2 br 2 ba, 1,788 SF

                                1151 Bennett Ln, $2,395,000, 3 br 1 ba, 1,024 SF

                                3230 Old Lawlet Toll Rd, $9,850,000, 3 br 5 ba, n/a

withdrawn          

current listings for sale    62   avg price  $1,782,894; avg days on market 181

current sale pendings        7    avg price  $1,100,414; avg days on market 219

sold in last 6 months         17   avg price  $565,941; avg days on market 160

Of these sales, the list price ranges were:

Below $200,000 = 3 sales (8% of total)

$200,000 - $500,000 = 19 sales (49% of total)

$500,000 - $800,000 = 13 sales (33% of total)

$800,000 - $1,200,000 = 3 sales (8% of total)

$1,200,000 - $2,000,000 = 0 sales (0% of total)

$2,000,000+ = 1 sale (2% of total)

As of June 28, 2009, there are 329 residential (single family homes and condos) listings active on the market in Morgan Hill, San Martin and Gilroy.  There are currently 375 pending residential listings.  Therefore, 53% of the total listings are pending under contract as of this date.  However, many of the pendings are short sales and therefore take a long time to close.  This keeps our pending percentage up artificially high. 

Twenty-eight residential real estate listings closed escrow during the past week in the south county towns of Morgan Hill, San Martin and Gilroy.  If homes continued to sell at this rate it would take 11.75 weeks to sell all south county listings.  Therefore, as of this past week, we have 3 months supply of inventory. 

Tune in next week for an update on the number of sales in South Santa Clara County!

active bank owned condo gilroy Homescopes housing listings Morgan Hill pending real estate residences San Martin Santa Clara County short sale single family sold townhouse

new listing      

new pending    1510 Yountville Cross Rd, $2,795,000, 4 br 4 ba, 3,417 SF

new sold           

new expired    

withdrawn       

average prices, days on market                  

current listings for sale    28   avg price  $957,213; avg days on market 164

current sale pendings          3   avg price  $1,464,000; avg days on market 211

sold in last 6 months            4   avg price  $676,250; avg days on market 102