Have you always dreamed of buying a home close to, or in, the western foothills in Santa Clara County, such as Almaden, Los Gatos, Monte Sereno and Saratoga? Some of the prettiest parts of Silicon Valley are snuggled into the base of the Santa Cruz Mountains. With views of downtown San Jose and the southern San Francisco Bay Area on one side, and rolling, grassy and redwood & oak filled hills on the other, its certainly scenic. Additionally, these areas all tend to have very low crime and good schools.
As a saavy foothill-area buyer, you will want to understand some of the unique issues that this geography may present. The most important of these may well be the issue of water control and drainage.
The Santa Clara Valley, and most of the neighboring Silicon Valley areas, is composed of mostly clay soil. This is an extremely strong substance – so much so that settlers used it, mixed only with a little straw and water, to form adobe bricks for building.
The caveat with clay soil is that when it becomes wet, it expands, and when dry, it contracts. In fact, we call this condition ˜expansive. The amazing thing is that the clay is more powerful than concrete. And that is the problem for houses and other buildings if the ground is expanding, contracting, or alternating between the two.
What can a homeowner do? Its imperative to try to control the amount of water near (or under) the home as much as possible.
In many parts of California, there are senior residential communities in which members can purchase a townhouse, condo, or single family house (usually in a gated community). Aside from The Villages in San Joses Evergreen district, there are only a small handful of such areas in Silicon Valley. (There is one small condo community in Los Gatos and another in South County which are ˜buy ins.) For the most part, what is available as dedicated senior housing for folks over the age of 55 or 62 (depending on the community) is primarily rental housing. (Additionally, there are some ˜life care facilities which do involve a buy-in or admission cost, but it functions as an insurance policy too, such that if your money runs out, you would not be asked to leave.) There is not a lot of senior real estate to purchase in the San Jose area.
Types of Senior Residential Communities
Of the main types of senior housing available in Santa Clara County, there are three general types of service available. These could be to rent, or to buy and own in life care or other communities.
1- Independent Living
2- Assisted Living
3- Skilled Nursing (sometimes, when temporary, called Rehab)
Independent Living is for healthy, mobile adults. In many cases, its a lot like hotel living, except the senior typically has an apartment or condo (studio to 2 bedroom) and 1 to 3 meals are provided daily. This type of arrangement offers less work (less housekeeping, meal preparation, shopping) and more security, companionship, and transportation (rides to shopping, banking, worship services, medical appointments). No medical care is provided. If help is needed with administering medicines, for instance, this would not be the solution.
The Villages in San Jose is an example of an Independent Living Community. In that case, people can buy houses, townhomes, or condos, but be in a gated community of seniors. More often in San Jose, though, these communities are apartment rentals with meals, housekeeping, outings, and other non-medical services for seniors. A good example would be The Atrium of San Jose, which is in the Blossom Valley neighborhood near Oakridge Mall on Blossom Hill Road.
Who is it for? If the senior you love is lonely, becoming a bit of a recluse, feeling overwhelmed by taking care of a house and meal preparation, this is a great opportunity to make life easier and more fun for him or her. There is always an adjustment period (not infrequently of about 6 months) but in my own personal experience, a lot of people who move to an Independent Living Community come to really love it as they make new friends and have less stress in their lives. It has been great for my family members.
Independednt Living requires the least staff to resident ratio, the least level of care and therefore is the least expensive, generally. There is usually a lease with the non-buy-in places, and a deposit.
What to ask? Ask what the typical annual increases tend to be, and how hard it is to break the lease if the residents health changes etc. Also inquire about the deposit and what medical conditions would warrant the facility asking you or your relative to move out to a higher level of care.
What are the issues? As with other type of rentals, things can change and the senior may not be allowed to stay there even if he or she wishes to. There is definitely a loss of control. The most common reason for needing to leave is declining health and the need to be more dependent on others for help with the daily tasks of living. Those include things like help with bathing, grooming, eating, or remembering to take medicines. When the resident needs assistance at this level, it will warrant a move out of independent living and into assisted living (or nursing, if the needs are more extreme).
Assisted Living offers more help, whether it is related to taking medicines, assistance with mobility, memory impairment, or overall declining health. Folks in Assisted Living tend to be a little older, more frail, more needy overall than those in Independent Living. More of the residents are confused or have some dementia. This is definitely not a golf course community!
The need to get medicines administered properly is often a driving force in the move to Assisted Living. Sometimes the elderly get forgetful about what has been taken or missed, sometimes poor eyesight makes correct dosing a problem – whatever the case, at Assisted Living, the staff takes over the meds and gets you, your friend or relative on a schedule to make sure everthing is taken as needed. It is a huge relief for many families. But also with Assisted Living, the staff is a little more involved in the day-to-day tasks of everyday living. Some folks may need reminders to go to meals. Others may need an escort. And others still may need help just getting out of a chair or putting on shoes from time to time. Many Assisted Living residences offer a sliding scale so that residents are charged for the level of care they need. Someone who only needs help taking pills will not be charged as much as another who needs help bathing or toileting.
When someone moves to Assisted Living, often the biggest surprise is how many of the residents there have some stage of noticeable dementia. When interviewing at various communities, ask about this. When a relative is ˜sharp and sits at lunch with others who are very, very confused, it can be disheartening and depressing for the new resident.
Equally surprising can be the reasons why one is asked to leave Assisted Living and go to the next level of care, rehab or nursing. When agreeing to move IN, find out the reasons why the facility may ask you, your relative/friend to LEAVE. In my own experience, I have found some places a bit capricious in getting residents out when it seemed that they could have been allowed to remain. Transitions are very hard on the elderly – so its best to keep the number of moves to a minimum! There are state laws about these issues too. For instance, a diabetic with a pressure sore at “stage 1” or “stage 2” is allowed to be at an assisted living facility and be treated there (usually by a home health care nurse or similar professional). The state of California says that if the wound is a stage 3 or stage 4, it requires skilled nursing rather than assisted living.
While some assisted living homes have been accused of keeping residents longer than they should, presumably to keep the monthly income, in my experience, sometimes these residential care facilities for the elderly try to kick out residents prematurely. Why would they do that? Sometimes it’s because the current residents are paying lower rent than the facility could get with a new move-in. Sometimes it seems the reason is that the resident requires too much assistance. This can be the case with the elderly who are large and not so good with transfers. The facilities would rather assist a 100 lb woman than a 200 lb man to get in and out of chairs, for instance. So moving on the larger person to nursing makes life easier for the facility.
To go into the reasons for dismissal a little more…. Usually there is a specific list that the residential care facility has for agreeing to take, or demanding to dismiss, someone. Get a list and have it explained carefully. One place I am aware of required someone to leave because he needed to be on a ventillator a couple of hours a day, but that was never explained upon move-in. Most assisted level places require that the resident be able to ˜transfer – to get in or out of bed or a chair without aid. I believe the idea is that in Assisted Living, the folks who reside there should be able to get out of the building if theres a fire. But some communities will kick a senior out if they feel he or she is not reliable with the transfering – so you have people who can walk with a walker, get in and out of chairs, etc. but are told they are no longer eligible for Assisted Living. Even so, many folks who need to be wheeled in to meals three times a day are permitted to remain, so to me its anything but clear why some can stay and others are asked to leave. Ask, ask, ask.
Something seldom discussed, too, is the concept of a ˜waiver. Different levels of care have different types of licensing and different requirements from the state. If someone belongs in nursing, for instance, but is at a lower level of care and the family or spouse can provide for in-home care, the facility may object that its not allowed and the family must move the couple or person out from assisted living to nursing. This can be devasatating, especially if the one needing the level of care is clearly dying. If the facility is willing, it can apply to the state for a waiver to enable nursing care to be brought in at the familys expense. Some facilities are willing to go this extra mile to spare the elderly person and family the enormous burden of moving a person who is already suffering tremendously. So ask about policies related to waivers and see how ˜humane the place is. And try to get it in writing!
In rental Assisted Living, it is usually month-to-month (no 6 -12 month lease) and there is usually some kind of non-refundable entrance fee ($1000 to $2500 is what I have seen in my own experience, mostly the lower of the two).
Some nice Assisted Living communities include Belmont Village in San Jose (next to Santana Row), Atria in Willow Glen, and Carlton Plaza in Blossom Valley. There are many, many of these type of places in San Jose
A helpful link on Assisted Living: California Assisted Living Association
Skilled Nursing or Rehab is the highest and most expensive level of care. In fact, as you progress through these levels, typically the cost goes up and the living space goes down. By the time someone is in Nursing, it is usually a shared room and no longer an apartment (and at that will cost significantly more than a separate apartment in Assisted Living). Currently, the cost for a shared room may run from $250 to $300 per day. At this level, many long-term residents are extremely dependent, many have advanced dementia and need assistance with almost everything. It can be very hard on the sharp-minded person whos there to nurse a broken hip, or someone who lost the ability to get in and out of chairs alone but is otherwise quite mentally astute.
I have seldom seen a Rehab Facility or SNF (slang ˜sniff for Skilled Nursing Facility) where the family felt the care was very good at all. It just seems to be rare and so it is especially crucial to not just interview carefully, but drop in often and at different times to make sure everything is satisfactory. Elder abuse is a big issue too, especially for patients with dementia – so please make it a point to be there often. Your loved one needs an advocate here more than anywhere!
Multiple Levels of Care in One Campus Setting
A growing tend in Senior Residential Facilities is to offer several levels of care all on the same campus. This is great as long as the care is equally good at all levels! In such a multi-level of care place, though, once a resident lands in Nursing, it can be hard to get back to Assisted Living. Why? Because the Assisted Living facility has to agree that the resident is ˜safe to return. It does not seem to matter what the senior or his/her family members want – if the facility says no, the answer is no. It can be very frustrating. Again, the compassion of the community is at the heart of the situation – so interview carefully and get references before deciding on a move to a community, especially one with multiple levels of care where its hoped that if the need for nursing is short-term, the resident can move back to Assisted Living as soon as possible. Its necessary to look at all the contingency plans, just as if you were buying a house, to use an analogy from my work.
An example of a multi-level campus is Saratoga Retirement Community in Saratoga.
Senior Housing Links
Links & Information for Seniors
Entertainment & Fun for Seniors
Senior Health Issues
Walking Tips for Seniors
Links and Articles of General Interest to Seniors
Senior Law: This is a Web site where senior citizens, their families, attorneys, social workers, and financial planners, can access information about Elder Law, Medicare, Medicaid, estate planning, trusts and the rights of the elderly and disabled.
The city of Sunnyvale, CA, is known for low crime and high tech. Its a city of about 100,000 residents and many businesses. Its a quick hop to the Cal Train in Mountain View, so is in a good commute location both for Santa Clara County but also for jobs ‘on the peninsula’ too.
Like the rest of California, Sunnyvales history goes back to the days of Land Grants (first Spanish, then Mexican, then US Patents). The first non-native beginnings of this city were in 1842 with the Rancho Pastoria de las Borregas land grant, held by Estrada and Inez Castro and later becoming Mountain View and Sunnyvale. (The arrangement with land grants was that the land was free, but the owner had to occupy it. Such a deal!) Its interesting history, so take a look!
|Wikipedia on the history of Sunnyvale, demographics, facts and interesting trivia.
Great Sunnyvale Info from Wikipedia
|Information on Sunnyvale from my other website, www.PopeHandy.com
Sunnyvale Community Info
|Tonos of information on city resources, city government, permits, and more.
City of Sunnyvale – Official Site
|Great information for folks just arriving to Sunnyvale! From the City itself.
Sunnyvale New Resident Guide
Los Altos, CA
Los Altos is a lovely town with everything to offer but affordable housing. It recently made a list of the best places to live in the US (low crime, great schools, quality of life). Theres a vibrant downtown to boot with superior restaurants, shops, and more. Its a great community for pedestrians and cyclists (lots of paths), and is a quick jaunt to both Palo Alto and Mountain View.
|Great information from my other site, www.PopeHandy.com.
Community Info on Los Altos
|Wikipedia information on Los Altos|
|Official city of Los Altos website
Los Altos – official government site
|The local paper, the Los Altos Town Crier.
Los Altos Town Crier
Several people, companies, and systems assist me in my work with buyers and sellers in Silicon Valley. Most often, my clients will not see or speak with many of them much (if at all), but they are all part of the package, if on the “back end” much of the time.
My daughter, Clair, assists me about half time. She is unlicensed and does not usually interact with my clients. Most of her work is computer related or errands-running: tagging disclosures for electronic signing, duplicating keys, dropping fliers off to listings, research for my blog posts, help with the monthly newsletter, and driving me while I videotape neighborhoods are some of her tasks.
Within My Brokerage:
At my brokerage, Sereno Group in Los Gatos, my escrow coordinator, Sonia Sisto, makes sure that the paperwork is complete. With a myriad of places to sign and initial and papers not to forget, it’s helpful to have a second set of eyes on the file. Additionally, other agents also review the file on behalf of Sereno management. When there are legal questions, which can come up from time to time, we have a legal counsel available through Ryan Iwanaga, my manager, or Chris Trapani, the CEO of Sereno Group, and we get answers back within a business day, if not a few hours. Finally, there are several agents who assist me in some cases (vacation, sickness, family emergencies). So I’m well supported on the office or firm level. When you hire me, you get a full staff behind me.
Whether buying or selling a silicon valley home or investment property, good inspections are critical. I don’t have one list for buyers and another for sellers – no matter which end of the transaction you’re on, you want excellent information. Surprises tend to sour escrows, so part of the plan in helping you avoid trouble is to avoid surprises. Only with excellent information can you make good decisions and have more control of the way your real estate sale progresses.
1. Home or Property Inspectors. It is crucial that your property inspector be exceedingly well trained, experienced, careful, clear, and through. In California, there is no license for home inspectors. However, there are a couple of trade groups which have a very high standard of practice. One is ASHI (American Society of Home Inspectors) and the other is CREIA (California Real Estate Inspection Association).
There are many good home inspectors in the San Jose area, but my #1 choice is Duane Serrano of Tri Star Home Inspections. Duane is an ASHI member with 15 years experience. I have not found him to either miss or over call issues (I have sometimes had inspectors who say a chimney or roof is bad, have the clients hire more experts, only to find out that it was fine – that aggressive over-calling is expensive, time consuming and upsetting). Duane also provides my clients with suggestions as to solutions and how to make the home last longer with proper care. He gets the reports out, with digital photos, on a same-day basis. Duane’s website is http://www.tristarinspections.com/ or he can be reached by phone at 408 266-2706.
Yesterday I met with some seller prospects – actually, I consider them clients since I’ve been assisting them, updating them, and giving them staging advice for about six months now. Their Blossom Valley home has been sliding in value and I have been concerned about the situation and trying to get them on the market sooner rather than later since they do want to sell. A couple of months ago, I told one of them that they’d now have to bring money to closing; I asked if they knew this and if they planned to do it. “I think we’ll be OK” I was told.
But now it’s the middle of March and prices have slid about 10% over the six months we have been chatting about their home sale. They’d told me that they were ready to list so I had spent hours getting comps and stats and trends pulled together as well as the listing paperwork. But I knew the issue of “bringing cash to closing” was the major hurdle.
So that’s where we started. One of them was clear that this was an issue, but one appeared surprised. Before I said the amount, I heard “well we might be a short sale”.
“A short sale?” I was just surprised to hear that idea even floated.
Both of them are very gainfully employed. They want to move, but I don’t see a “have to move” situation. It was clear to me that the short sale concept was not well understood, nor the punishment it brings appreciated.
I guess it sounded like an easy answer. After all, wasn’t everyone else doing it?
Certainly, in this particular area of San Jose, and in this particular price point, a good 80% to 90% of the homes appear to be short sales – and they are dragging values down for everyone else.
Let me briefly explain what a short sale is and isn’t:
(1) What is a short sale?
- it is usually a pre-foreclosure situation
- the buyer cannot continue to make the payments and will go into foreclosure if the short sale doesn’t happen (or this will happen in the near future)
- there is a significant “hardship” (job loss, sickness, death, divorce) causing financial problems
- the owner wants to sell the home but cannot pay off the lender in full because the home has declined in value – there’s not enough equity
- it is going to hurt one’s credit badly, but only half as badly as a foreclosure
- short sales often do not go through – most of the time, they end up becoming full blown foreclosures
(2) What a short sale isn’t:
- it isn’t a help to people who simply want to upgrade and don’t want to pay off the bank
- it is seldom an option if you have other assets (like other properties or money in the bank) – the bank will want your money!
- it isn’t a “get out of jail free” card – there are built in punishments for those who must resort to doing a short sale (trashed credit AND paying taxes on any amount “forgiven”)
- a short sale is never a happy thing – it is always the lesser of two evils (vs foreclosure)
I explained to these nice folks that it didn’t appear that they would qualify for a short sale (no hardship, no inability to pay the loan etc.).
What options exist for Silicon Valley folks who want to move but have no equity?
Here are a few thoughts:
- A promise was made to repay the loan, so the obvious first answer is to wait out the market or come up with the cash to buy out of the situation.
- Walking away: In some parts of the country, we are again hearing about “jingle mail“, in which owners simply turn in their keys to the bank and walk away. I remember decades ago that happened in Alaska when the market there tanked. Now it’s happening here too.In Sacramento, where some owners bought a home at 50% more than the identical house is selling for now, some folks are first purchasing the new home (same floorplan as current one) at the cheaper rate, then walking away from their old home. In effect, they get a home with half as much mortgage. No, it’s not very nice. It’s defaulting (a strategic default) on their promise to repay a loan. The lenders could potentially persue them for losses. Will they? I don’t know – this is a crisis of epic proportions!
- Renting it out: another possibility is to simply rent out the house (rents are rising due to increasing demand) and to move to the next house.
I don’t think anyone now doubts that we are in a recession which is fueled by the housing crisis. For every person who just “walks away” from a house, that’s the recession deepening for everyone. I’m not going to encourage it – it worsens the economy and trashes the borrower’s credit.
Rents are increasing with this crisis. So my suggestion: rent out your house and move on if you can. Talk to the nonprofit credit counseling agencies. Give it a few years, Then call me when you’re ahead of the market and we’ll sell it for you. Or keep it until you have kids going to college and you can then use it to pay tuition.
Eventually, the market will improve. You don’t have to sell when it’s at a low point.
Thanks for reading this article – I hope you find this Silicon Valley real estate blog to be of help to you!
Please see also these related posts:
Underwater & Considering a Short Sale or Loan Modification?
What is a “Kick Out” Clause?
How Long Does it Take to Buy a Silicon Valley Home?
Short Sales in the West Valley Areas of Almaden, Los Gatos, Saratoga, Campbell, and Nearby
Real Estate Inventory & Sales in Silicon Valley’s “West Valley” Areas of Los Gatos, Saratoga, Campbell and Cambrian Park
Interested in Buying a Los Gatos Short Sale?
All posts relating to “short sales” on this blog for real estate in Silicon Valley
Which part of the Santa Clara Valley
is seeing all of this foreclosure and pre-foreclosure activity?
Depending on where you live in Santa Clara County, you may be seeing a whole lot of distressed properties on the market – or you may be seeing none at all. This is part of our current “bifurcated market” situation.
Generally, the more expensive areas of Silicon Valley (Palo Alto, Cupertino, Saratoga, Monte Sereno, Los Gatos, Almaden Valley and Silver Creek) are not suffering from a huge number of listings in which the sellers are in financial straits. There are some, though.
It is the less wealthy areas in San Jose (including parts of downtown, the east side, south San Jose, Santa Teresa, Blossom Valley) and the south county cities of Morgan Hill and Gilroy) where there is an inundation with short sales – in the lower price ranges especially.
Generally speaking, most short sales, preforeclosures and bank owned homes are priced below $600,000.
How can you tell if a home is in pre-foreclosure?
Homes listed for sale in your neighborhood of San Jose, Saratoga or Los Gatos that are in pre-foreclosure may look like any others available. They may have granite in the kitchen, beautiful baseboard and crown molding, new dual pane windows, and on and on. The sellers may have borrowed and borrowed to improve the property, be unable to make the payments due to job loss, divorce, or other problems, and now be in default on a loan, heading toward foreclosure.
This status usually doesn’t “show” unless you have access to the county records or have a subscription to a service that lets you know the status (and those services are no where near 100% reliable, by the way). Your real estate agent, who should have a subscription to the MLS with full information, can see a report at no cost that shows the foreclosure history. (Not all pre-foreclosures are short sales.)
What’s a short sale? Being in “pre-foreclosure” means that the seller has missed payments on a loan in which the real estate owned is used as collateral, or security. Let’s say a home is worth $1 million, but the amount in default is a small loan, perhaps of $25,000. If the home is sold, it can pay off the debt in full.
Sometimes, though, a distressed seller bought higher than the home is now worth. When prices fall (and if the owner bought the home with a low down payment especially), selling the home will not be enough to pay off the loan. So again let’s imagine that a house is worth $1 million, but the owners owe $1.1 million on it (and to sell they have to worry about closing costs to boot). By selling the home, foreclosure can be averted – but to do so, the bank will have to agree to not being repaid 100%. This is a “short sale”. (Not all short sales are in preforeclosure, though, as not all home owners of these properties have missed payments on their mortgage.)
We’re seeing a lot of short sales in the entry level markets. In these cases, current owners bought their properties a year or two ago – for 10% or 20% more than those houses are now worth.
In the higher-priced regions of Silicon Valley, it’s less common to see a short sale than it is a straight pre-foreclosure because someone just can’t make the loan payment (due to some new problem like divorce or job loss, or because the adjustable loan went up and the payments are now untenable).
Recently I viewed a piece on Forbes.com that said that San Jose was on it’s “top 10” list of good places to be a landlord. Investors, take note!
Recently I had a listing in Sunnyvale where an enormous tree graced not only the front yard of my clients’ house, but stretched over a next door neighbor’s yard and even over the neighbor’s roof. We got the home I’d listed sold quickly, but prior to closing, the neighbor complained about the limbs.
The sellers, wanting to close escrow on time, agreed to trim the large bough that threatened her roof. They only wish that she had mentioned it sooner so that it could have been a “non issue” during the time of the sale. Ideal would have been a request in spring, which is the better, healthier time for trimming a tree.
And more recently, something similar happened in Los Gatos (with a home not for sale). A property manager of a tenant-occupied house showed up on the doorstep of a tree owner whose large tree arches over the fence. The property manager demanded that the tree be trimmed and that the tree owners pay for it. “It is your responsibility,” she asserted. (Interestingly, she showed up with a gardener – not a tree professional – and had no business card so that she could later be contacted about this issue. So it wasn’t the most amicable approach.)
My understanding of laws around trees and property lines was simple: the neighbors can cut the tree if they want to back to the property line, but the tree owners don’t have to pay to cut it unless it is truly damaging or about to damage the others’ property. If the neighbors harm the tree while pruning it, they can be liable for damages.
But just to be sure, I phoned the California Association of Realtors’ Legal Hotline and spoke with an attorney about it. My understanding was correct: the lawyer cited case law and verified that the tree owners can’t prevent the neighbors from trimming the tree if they want and that the neighbors cannot force the tree owners to trim it unless it is truly causing (or immediately threatening to cause) damage.
The property manager was mistaken and out of line.
A friendly phone call and inquiry about tree maintenance goes a long way toward neighborliness. Most tree owners will take good care of their trees and do pruning in spring, and will discuss the timing with their neighbors so that it is convenient for the arborist to also clean up any dropped branches in adjacent yards. Open communication is always helpful for neighbor relations. It helps when requests come in a pleasant way without rushing or pressuring. But that would be true about any issue, whether it’s trees, fences, noice, odors, junky cars or anything else.
(This topic was also addressed on my Live in Los Gatos blog, if you would care to read more about it.)
I’m going to be blunt here: it is really hard to help when we, as agents, don’t know what is truly going on. It’s not a whole lot different than keeping important things from your doctor or lawyer. If you want help, it is imperative that you tell your hired professionals what is going on.
For that matter, if you are interviewing agents to list your home or to help you to buy your next home, expect those agents to ask you about your needs and motivation. Hiring an agent (and the agent agreeing to take you on as a client) is a two way relationship. Both sides need to be clear and honest with each other.
Let me give you an example. Years ago, I had some prospects (not yet clients) in Monte Sereno who inquired off and on for years about selling their home. At one point, it became a “hurry up” situation. Luckily, they told me the truth: one of them had been diagnosed as terminally ill. The sick one did not want to saddle the survivor with selling the home after the death.