The Campbell, CA, real estate market for condos and townhouses has been a little up & down, but for houses it’s a stronger market.  That does not mean that prices in Campbell are where the owners or sellers would like them to be – just that residential real estate which is appropriately priced is selling pretty well.

Here’s a visual of market conditions (not prices) generally, through June 2011:

What about prices and home values?  Are they holding up?

Campbell houses for sale:  prices appear to be slipping slightly.  Some volatility is to be expected this year and next, so it’s possible to see some up and down (but probably not super dramatic unless you just barely have equity and it’s the difference between being able to sell without bringing money to the closing table or not).  Here are the figures for June – see the whole report on my R E Report site for Campbell CA houses:

The market for houses is good, but pricing is soft, as you can see in the numbers above.

What about for condos?

Condominiums and townhouses in Campbell – see the full real estate report online (updated each month around the 5th – 8th).  Isn’t it interesting that although it’s a cool or cold buyer’s market, prices there are actually inching up pretty noticeably.  That is very good news to condo and townhome owners who want to be doing a “move up”.

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What do you need to know if you’re buying a condominium in Silicon Valley?  Isn’t it simpler and easier than buying a house?

No, not really.

With a condo, you are buying not just the unit (or airspace) that you intend to occupy, you’re also buying a shared ownership in the common features.  This means, of course, that you are also buying into any potential liabilities.

Here are some questions to ask and areas to investigate when buying a San Jose area condo:

• What is the percentage of owner occupied homes? (Too high of a ratio and buyers will have trouble purchasing with a loan, which means you could have trouble selling.)
• Is there any litigation (lawsuits) ongoing?  Again, this can impact saleability.  Often newer condo units investigate any building problems around years 7-9 as there’s a 10 year statute of limitations for finding building errors, so younger homes that are just under 10 years of age could be involved in a lawsuit.
• Is the complex professionally managed or managed by owners? (There will be implications for each.)
• How much have the dues been going up each year?
• How many home owners are currently in default on their HOA dues? (HOA dues are often skipped before distressed home owners default on their mortgage.) (more…)

How is the Campbell condo and townhouse market?  The answer may well depend on both what part of that market we’re discussing and which data we’re focusing on.

The Campbell Condo Real Estate Market Summaries for Summer 2010

The summaries here are from my Real Estate Report.  Get the most current, detailed report at www.popehandy.ReReport.com.

Campbell condominium & townhouse sales in September 2010

The condo market in Campbell, California has been strengthening.  September 2010 was a good month!

August 2010 Condo Sales in Campbell CA

August was slow across Silicon Valley – real estate sales lagged (more than the “seasonal average”)
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Santa Clara County Condo Market

Real estate statistics and trends at a glance – below please find the data for Sept 2010 and Aug 2010 for all of Santa Clara County. (View the whole report online here – Santa Clara County Condo Market Trends Report. It is updated each month between the 5th and 10th, and this link will always bring you to the most current report.)

Countywide, the condo market has had a rough few years – and this year is no exception.  Prices are starting to nudge up again, but the number of sales remains sluggish.

Median List Prices of Condos in Almaden Valley, Los Gatos, Saratoga and Cupertino

A stranger graph you may never have seen – it is very tangled looking! The slate blue line represents the Saratoga condo market, which I can attest first hand has been suffering.  Of these four market areas, it’s the most expensive.  The green line is Almaden Valley, San Jose, 95120.  It has been slipping in price fairly consistently this year.  Interstingly, though, Los Gatos has had a softer ride and Cupertino’s prices are rising!

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There’s quite a bit of confusion around the real estate topic of “Common Interest Developments” (CIDs): condominiums, townhouses (or townhomes) and planned unit developments (PUDs). Given that we have many of these communities in Silicon Valley, I think it’s important to explain what these are, why the type of ownership matters, and how you can tell the difference.  (The explanation here is not a thorough legal definition but is a general description.)

Part of the confusion stems from the fact that there are two things to consider: the architecture of the buildings and the type of ownership.

1. What is a townhouse (or townhome)?  A townhouse is a type of building or architectural style, not the type of ownership involved. A townhouse could be a planned unit development (PUD) or it could be a condominium.
2. What is a condominium or condo?  A condominium is a type of ownership of the real estate. (We tend to think of it as an apartment which one buys, but that’s not correct.)  Condo ownership means that the purchaser has 100% rights to the unit and a percentage of ownership in the common lands (fractional ownership in common areas).  Condos can architecturally be a unit that resembles an apartment, a townhouse, or even a single family home.
3. What is a PUD?  A planned unit development is architecturally either a townhouse or a house in which 100% of the unit plus the land under it is owned and the ownership of the unit also provides for a membership in the homeowner’s association or HOA.  The HOA in turn owns all the common elements (such as private roads and ammenities such as a pool, tennis court, parking lots, etc.). With a PUD, homeowners have an easement and rights to use the common area through their HOA membership.
4. What is a CID?  A common interest development, or CID, is a general term meaning the ownership of property in which there are “common areas” such as private roads, a pool, parking, tennis courts, utility rooms etc.

A townhouse that’s a condo can look exactly the same as a townhouse that’s a PUD. This is also true for other types of construction too. In Los Gatos we have some freestanding homes (or properties with the only common wall being at the garage) which are in condo ownership.  Same with the beautiful Villas of Almaden community. Both have “common areas” and mandatory membership in the home owner’s association.

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“Why isn’t my Silicon Valley townhouse selling?” wonders the home owner. Real estate agents know why the home isn’t getting any offers, or worse yet, any traffic at all. In fact, local Realtors who’ve seen it probably wonder if the owner of the property has seen the MLS printout at all.

1. Terrible  photos (or not enough of them): in our San Jose area MLS we are allowed 9 photos.  How many are in your listing?
2. More on photos: Would it be so hard to turn the lights on in the home when photographing the property? Real estate looks much better when well lit than when dark.  Even beautifully remodeled kitchens can look so-so if the lights are not all on!  A bright room will make you money…a dark room will cost you!
3. Is there a video or virtual tour?
4. Is the listing syndicated so that buyers can find it on multiple websites?
5. How is the pricing? Did you price a 2 bedroom townhouse as if it’s a 3 bedroom? That’s a very common but huge mistake!  Compare apples to apples – the buyers are doing that, and when you bought your home, you did too!  Did you price the home using comps from 6 months ago, or comps from 3 miles away, or a different school district? Huge mistake!
6. What’s your competition?  If you’re a short sale, you need to be competitive against other short sales.  Don’t be satisfied that your home is less expensive than a “regular sale”. They are two entirely different things!
7. MLS description and comments: what kind of comments are in the precious few words allowed to describe your home in the multiple listing service? I have seen inane things use up that space.  It is imperative that the descriptions be strong.  For example, not “nice kitchen” (that could mean almost anything), but instead “slab granite countertops” – specifics that buyers want to hear about!
8. Commission rate: if your townhome is a “regular sale” and everything in your area is selling with a buyer’s agent commission rate offered at 2.5% or 3% but you’re offering 2%, guess what happens? Little or no traffic, that’s what!  Remember that agents are selling homes as their livlihood, and while many will overlook a low commission, many others will not.  (When I list homes I run the CR of similar homes so that my sellers can make an informed decision on this point.)

There are many reasons why Silicon Valley townhouses might not sell. It is hard to sell a short sale listing, for instance, but many do sell and close despite the odds. If yours isn’t selling, have a look at the price, the photos, and the description and see if anything is amiss. These are the most important areas to consider.  Other issues may be at play, but if these are correct your home should sell despite other challenges.
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If you are purchasing a condominum or townhouse in Silicon Valley, you will need to consider a few things more than if you were buying a house that’s not held in condo ownership*.

Like what?

Most of all, with a condo or townhome (or planned unit development) you are buying a fraction of the entire complex as well as your own living space (condo or townhome). Condominium ownership includes a percentage of the community’s property. You will benefit from it, but you also will be responsible for it.

Additionally, there are a lot of  documents to read and understand when purchasing a condominium or town house. You will need to be able to accept the rules, bylaws, financial statements, meeting minutes, articles of incorporation and more.  You will want to read the newsletter (and minutes) carefully to see if there are any “issues” in the complex.  Plan to invest several hours in reading and digesting the information in the 2-3″ stack of papers.

Naturally another difference is that your neighbors will be in very close proximity.  If you are a non-smoker but the neighbor in the unit next door smokes, you may not be too happy about it later.  A few months ago I showed a Rivermark (Santa Clara) townhouse that was just darling but the next door neighbor came out and smoked on the front porch while we were there.  My buyers didn’t want to purchase the home for that reason – they did not want to deal with the smell later. You may have similar concerns about other odors or noises. 

Perhaps most important are the financial issues and risks:
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