The Santa Cruz, CA, Lighthouse

Santa Cruz is just 30-60 minutes “over the hill” but in many ways is an entirely different world than Silicon Valley.  I spent a lot of time there while growing up in Santa Clara and Saratoga, mostly because my grandparents lived in Pasatiempo (a lovely neighborhood centered on a golf course) in Santa Cruz and later in retirement communities nearby.  Jim and I lived in Santa Cruz ourselves for three years when we were newly married.  [I taught first at Marello Prep in Santa Cruz (now closed) and later at Notre Dame High School in Salinas while living at the coast, in life before real estate.]

We have a lot of wonderful memories & experience with the Santa Cruz – Capitola – Aptos – Soquel area.  Today I wanted to share a few general tips and food tips for those who may be new to this part of California and spending some time by the coast.

Some general tips

1. Weather: always, always have layers available as the shore is unpredictible.  It might be 100 in Willow Glen but cold and windy with the fog rolling in at the wharf.   The coastal communities have varying degrees of fog, sun and wind: microclimates are the norm.  If it’s sunny and toasty at the lighthouse, it may not be that way at Seacliff Beach. Don’t rely on webcams!
   
2. Restrooms: know where the restrooms are before you visit.  The city of Santa Cruz has a list of public restrooms and a map online. It’s pretty awful if you spend a lot of time shopping on Pacific Avenue (downtown Santa Cruz), only to find no bathroom when you need one.  Your visit will be happier if you plan ahead!
3. There’s more to do than just the beach: the coastal communities near Santa Cruz have loads going on with festivals, shows, musical productions and more.  Check out the online roster of events near the Monterey Bay.
4. The Boardwalk has no admission fee and is a great place to people-watch and get tasty junk food, even if the rides don’t appeal to you.  In summer there are free music concerts on Friday nights (check the website for info) and on Monday & Tuesday evenings after 5pm they celelebrate 1907 nights: rides and hot dogs, cotton candy and most fountain drinks are just $1 each.   This is a bargain!
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Last weekend, my husband and I went to the Monterey Peninsula for a couple of days to celebrate our 25th wedding anniversary.  We had a wonderful time there, but would not return to the hotel where we stayed this time.  The worst issue was the mold in the bedroom along the wall and baseboard.  I brought it to the hotel’s attention and it was “cleaned”, but I think the issue is far from solved.

Mold collage, before and after cleaning with bleach

Since we sometimes run into issues with mold in our real estate transactions, I wanted to take the opportunity of having these before & after photos to discuss what to do about it when buying or selling homes.  Luckily, here in Silicon Valley it is not so humid as it is along the coast, so we are helped on that count.  But it is still very possible that you will run into mold or mildew when trying to buy or sell property.

First, I should state that mold is naturally occurring and it is not possible to completely eliminate mold spores from your home.  The question is whether or not the mold inside the house is the same kind and density as the mold outdoors, or whether something unusual is harbored indoors.

Mildew and mold need moisture and the right, mild temperatures to thrive – eliminate the source of water and the mold will go dormant.  Please note that it will not die when the moisture is eliminated – it just goes into a sleepy state.  If water is later reintroduced, the mold spores will spring back to life.

In my experience, the most common place to find mold in the San Jose area tends to be in bathrooms, particularly around older aluminium windows (which tend to be very cold and collect condensation). Mold on these window frames is easily cleaned by using a solution of water and bleach, and it can be prevented by better ventillation and heat, which allows the window frames to dry out. Likewise it’s very easy for mold to grow in showers and tub areas due to the high amount of water present.  That water needs to be able to evaporate, otherwise you’re inviting mold to take hold.

Find mold on sheetrock, wood or carpeting?  First you must discover the source of the moisture.  Most likely, there’s a leak somewhere, either a plumbing leak or around a door, window, roof or flashing.
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Today we’ll look at the ratio & relationship between real estate listings and sales of houses and duet homes in Silicon Valley over the last eighteen months. The goal is to get a sense of the market trends in terms of the overall absorption of homes for sale.  (We’ll give a glance at condo and townhome sales but the focus is on single family homes.) How hard is it to sell a home?  The answer has to do with supply and demand – the number of listings and the number of sales.

In the graphs below, the reddish brown line represents the number of pending sales.  The blue line indicates the number of listings or homes for sale. Put simply, the closer these two lines are together, the hotter the market – that is, the more of a seller’s market it is.  When they are far apart, it’s more cold, more of a buyer’s market.  If the lines cross, it is a wild frenzy (that does happen in one case, as you will see). Below please find the graph for the homes in Santa Clara County overall (all areas).

Santa Clara County listings to sales Jan 2009 to June 2010

 You can see that these two lines pinch together in about December 2009 to January 2010.  Prices had dropped and investors were swooping in! The  market has cooled since then.

Santa Clara County condo & townhome listings to pending sales Jan 2009 to June 2010

 For condos and townhouses, all of Santa Clara County:Here the two lines  – or the market – were close together for about 3-4 months.  Buyers understood that condominiums in Silicon Valley were bargain priced, and they responded by buying.Now let’s look at various areas around the county.  We’ll take these in Alphabetical order, beginning with Almaden Valley.

Almaden Valley listings to pending sales Jan 2009 to June 2010

 As you can see, the market improved but never got as “hot” as in the county generally.  This is because it’s a more expensive area, and most of what was selling in winter consisted of entry level housing.
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How many home buyers and sellers understand what a default is?  Consumers often confuse the term default with cancelling the sale at any time – even backing out of a contract during the contingency period for a legitimate reason.  Cancellation does not always mean default, though – there are some  fair ways and times to get out of contract without it being a default. 

Default is a strong word which refers to a failure to do something promised in contract or not doing it on time; we sometimes call it “non-performance”.  In the purchase agreement, buyers and sellers both make promises to do certain things within a certain timeframe, so either one could potentially default.  For instance, the following items are areas where a buyer could default:

• not putting the initial deposit (good faith deposit) into escrow on time
• cancelling the sale after removing all contingencies or without cause allowed by the contract
• not removing contingencies on time (or possibly ignoring other deadlines)
• not completing loan papers on time

Sellers, too, can be guilty of defaulting on contractual promises. Here are some areas in which a seller could default:

• not moving out on time
• not providing completed disclosures or reports on time
• not having work done which was contractually required (such as pest work or repairs)
• not keeping the power & water on for inspections and final walk through
• causing a delay in closing due to not signing off on time

In Silicon Valley, there are two purchase agreement forms in use: the California Association of Realtors (CAR) contract and the Peninsula Regional Data Service (PRDS) contract.  Generally speaking, the PRDS & CAR contracts are similar on many points.  They are not so similar in the treatment of defaults, though.

Oddly, the CAR contract only mentions the word default twice, and in both cases the topic is a buyer’s default, first in the liquidated damages paragraph (25) and next in the other terms & conditions paragraph (27).
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A couple of days ago, I showed a home for sale along the Los Gatos border with Cambrian Park (area of San Jose) to a buyer couple.  It’s tenant occupied, was pretty much a mess  (and on top of being in disarray was dark – curains drawn, no lights on etc.) and the person who lived there walked us through the property, telling us things about the owners and the situation that really didn’t make my buyers want to purchase the home at all.  Between the condition of the property and the info-packed narrative, my clients could not wait to leave.   No sale!

If you own income property (or rental property) in Silicon Valley and want to sell it, you may be aware that a 1031 tax deferred exchange is something to consider.  What you may not remember to do is to strategize about what to do with your tenants.  How do you get them to be cooperative, responsive to showing requests and neat? And preferably, to be absent or at least quiet and out of the way when the home is shown?

When residential real estate is for sale, the occupants’ lives are turned upside down.  It’s no small amount of inconvenience and risk to them with the traffic in and out, the calls at all hours, the loss of privacy and on top of everything else, the risk of personal propertybeing stolen.  If you are a homeowner, you are motivated because you will get cash out of the deal at close of escrow.  If you are a renter and the home you’re renting or leasing suddenly goes on the market, there’s not really a “silver lining” built into the scenario most of the time.  That can set the stage for trouble and even financial loss.
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Buying and selling homes is stressful no matter who you are or what the occasion may be.  It is even more difficult for those for whom English is not their native language and for whom the US is not their native land.

First there’s a language challenge (depending on English fluency).  Even more, there’s a cultural challenge in terms of how homes are bought and sold. Add the normal stress to the cross-cultural confusion and there’s a recipe for misunderstanding, bafflement, surprises and upset.  One of the biggest areas for clashes is how negotiations are carried out.

I have had the pleasure of traveling to many places around the globe and to live in Italy for the better part of a year while in college (in Florence, and yes, I loved it).  I remember very vividly some of my own cultural frustrations and although I was fairly fluent, missing a whole lot of social cues. I had to work to learn to negotiate for simple things like fruit and sweaters in the open air markets.  And I was just 20, not trying to purchase anything as significant as a house or condo.

My clients today come from all over. Typically, at any given time, more than half of my clients are foreign* (and I love working with them and hearing about their experiences, customs and traditions).  Every once in awhile,  we discover that buying and selling expectations are vastly different from Silicon Valley to wherever they came from. Here are a few:

1. Expecting to negotiate at every turn, starting from the time the seller accepts the buyer’s offer and continuing until close of escrow (not done here: you negotiate at most two times – first when writing and countering offers and second prior to removing contingencies, if something new is learned during the course of the inspections.  If you negotiate at every opportunity, you will have everyone angry at you!)
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Since early July, fire danger signs have been out at Belgatos Park in Los Gatos (and I suspect at other parks throughout Santa Clara County too). To the right is the sign at the park’s main entrance.  It admonishes the visitors:

“High Fire Danger  No Smoking No BBQs”

To anyone who’s lived in Silicon Valley long, this is understood – the fire danger is quite high here in summer.  Unlike most of the east coast, it does not rain here in summer (at least not often and not much), and our green grasses and plants of spring turn to kindling very quickly.  One stray match, hot cigarette butt or one illegal firework can smolder into a flame which grows fast with the smallest amount of wind to destroy property, animal life and potentially human life, make breathing bad for days and leave a scar on the land.

This sign at the entrance may not feel very compelling to some as the lush green grass in the background would seem to contraindicate restraint.  But venture to the park’s side entrance on Bacigalupi Drive (or hike up the trails) and you’ll understand immediately why this is nothing to take lightly.

Except for one little tuft of partially green grass, “cardboard hill” is entirely dry. So is the rest of this beautiful open space.

If you live close to or have open space in San Jose’s Alum Rock, Almaden, or other east foothill areas or the west valley places like Los Gatos, Monte Sereno, Sartoga, Cupertino or anywhere the foothills, your property is likely considered to be in a high risk fire hazard zone. If so, each year you are mailed information from Cal Fire reminding you of your obligation to provide clearance around your home and to cut down the dead brush.

Just outside of the main entrance to the park there’s a large and open lot which has a few trees, some prickly pear, and a lot of grasses and weeds in winter and spring.  (It also had a rattlesnake it in by the prickly pear when my daughter walked past with our dog one day a month or two ago.) Below is a pan of two pics I took with my Blackberry and later stitched together – the park entrance is out of sight but is a little to the left of this photo.

These owners have done as needed and disked the field to help prevent fires or the spread of fires.

There are things you can do to “harden” your own home is you live near open space – that is, to make it more resistant to fire. Check out the whole list on the Cal Fire site, “Ready For Wildfire“.