Recently my family and I vacationed in San Diego, where, naturally, we saw a lot of information related to animals, the environment and global climate change (sometimes called global warming).  We saw films regarding the rapidly shrinking polar bear habitat (due to thinning ice), for instance, and heard that they have a significant risk of being extinct in the wild in the next 20 years. 

Mapped estimation of flooding due to sea level rises of 1, 7 and 14 meters

But what about Silicon Valley? And Silicon Valley real estate?  As the ice melts, sea levels rise.  If or when this trend continues, the San Francisco Bay Area, including Santa Clara County, will be impacted quite seriously.   Where will all the water go?  Our “Natural Hazard Reports” now list things like “dam inundation zones” and “earthquake fault zones” but not rising sea water zones.  

Geology.com has an interactive map which you can view and tinker with (see link at image above or here: http://geology.com/sea-level-rise/san-francisco.shtml) to get a sense of the projected flood areas.  As you might imagine, the low lying areas closest to the bay are most at risk – parts of San Jose, Alviso, Santa Clara, Sunnyvale, Milpitas, East Palo Alto and Mountain View are all threatened. Some of these are already in a 100 year flood plain, which forces buyers to pay for flood insurance and makes homes a bit harder to sell.   How much harder it might be if the water were to begin to rise rapidly….

There are a number of responses to this climate crisis, many of which you may know about such as the effort to reduce carbon emmissions.  Locally, there’s also an effort to restore the wetlands around the south bay as these can help to absorb increases of water from storms (or potentially a rise in sea levels) and also trap carbon. About 85% of the wetlands have been lost over time, so there are many reasons to restore them.  The South Bay Salt Pond Restoration Project has a very helpful website with maps and information. 

Other solutions may arise too.  Having been to Holland, I have to wonder if there will be dikes built to protect certain areas.  Or would we fight the water like they do in Venice, by creating islands of sorts or floating blocks?   Time will tell.  Meanwhile, I see the popularity of the “green” movement becoming more & more relevant each day.

For more information, please watch this public television video “Climate Watch: California at the Tipping Point”.

QUEST on KQED Public Media.

This post was very much inspired by a good friend, fellow Realtor and blogger, Laurie Manny, who died very unexpectedly this week.  I dedicate this post to Laurie, who always encouraged, mentored and inspired many of us.  My blogs have been influenced by her and our friendship, and I will miss her immensely.  I exchanged messages with her on Monday, wrote this on Tuesday (and sent her a note on Facebook to let her know she’d motivated this post), and Wednesday learned that she died sometime between Monday evening and Wednesday morning.  Her influence will continue to be felt for many, many years to come. Rest in peace, my friend.

How important is the marketing of homes for sale in Silicon Valley?  First it’s important to understand what we mean by the term marketing: generally, it is the way we attract potential buyers to the homes for sale.  This is more than just the flyer or newspaper ads.  It includes:

• pricing the home
• photographing the property
• describing the home on the MLS (and including good pictures)
• the quality of the flyers
• the print advertising
• the online advertising & exposure
• the networking with other agents
• the direct outreach and appeal to consumers
• the accessibility of the home
• staging the home to sell (appeal, cleanliness, no odors, etc.)

Marketing can be good, bad, or somewhere in between. Bad marketing will likely cost sellers money and good marketing will likely make them money.  

Today we’ll go over the most important elements of marketing because sellers should evaluate them when hiring a Realtor to assist them in the marketing and sale of their home.  While there are many areas of marketing, the most crucial, by far, are these three: pricing, photos, and the description on the MLS.

Pricing:  The biggest marketing mistake which is commonly seen is overpricing.  Sellers sometimes believe that their home is worth more than the buying public do and a home will remain unsold no matter what else is done right.  In fact, you could fly airplanes aroud the home and put full page color ads in every paper around the world but if the home is overpriced, it still won’t sell!  Pricing is the most important part of marketing.   With a too-high price, traffic will be diminished and offers will be low at best (lower than actual market value).

Of course, most homes are worth not just one exact dollar amount but somewhere within a range of prices, depending on terms, the speed of the sale etc.  If the pricing is well done and the rest of the marketing is also quite good, the home ought to sell on the high end of what is possible at that time.

Pricing mistakes are very costly and very easy to make.  Here are some of the ways which sellers can be misled about the probable market value of their home:

• using old comps
• relying upon online home valuations
• basing their home’s sale price on what they “need”
• hiring an agent based on his/her suggesting the highest list price (we call that “buying the listing” when an agent overstates value to secure the listing)
• expecting 100% back from all improvements done to the home
• believing buyers can “always make an offer” (if it’s overpriced, they usually won’t)
• thinking there’s no harm in just reducing the price later (if the market is going down, you will be “chasing the market down”)

The one thing that neither the sellers nor their Realtors control is the real estate market, which is fickle and can change.  In recent years it’s been up and down, depending upon location, price point, school districts and more.  Using six month old comparable sales to establish current market value just isn’t appropriate.  Sometimes even the most recently closed sale is not enough, especially if the market is sliding.  Instead of just relying on the solds, also look at the pendings and the current competition.  The less competition your home has, the better odds you have of selling it – and for more.  But a surge of inventory will cause home values (including yours) to drop.   To understand the probable buyer’s value, all of these must be factored in together.  (The online valuation sites do not do that.)

I should add that it is harder to sell a property that has issues such as high voltage power lines, deferred maintenance, messy tenants who make showings difficult, busy road, junky neighbors, or some other undesirable element.  Many agents will suggest a lower price to compensate for whatever issue is hurting the marketability of the home.

While it’s true that there is no problem that a better price cannot fix, most sellers are trying to maximize their sales price.  For that reason, I’d always suggest asking your real estate agent if there’s anything that can be done to improve the market value aside from that lower price.  Sometimes fresh paint and carpet and a professional house cleaning can do wonders for the home’s saleability.  Or giving tenants a lower rent in exchange for their cooperation during the sale will create an easier time for buyers wanting to see and purchase your home.   A little effort may have a great payoff.  (Some agents focus almost exclusively on price and may not be worried about any other element of marketing.  This is a mistake, so be aware that you may run into an agent with this belief.)
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Stop by downtown Saratoga’s Wildwood Park (20764 4th Street off Big Basin Way) on Sunday 8/8/2010 from noon to 6pm to enjoy an afternoon of free music plus activities & entertainment for kids, including an appearance by a magician!  A variety of bands will be onstage, and Saratoga’s own Mike Gurley will be performing too.

This is a benefit for the Susan G Komen breast cancer research fund, so will be a live auction and donations would be very much appreciated.

In some parts of Silicon Valley, by crossing a particular road or driving a few feet, the whole look, feel and pricing of an area can change.

Bel Estos Drive near Rosswood Drive in San Jose

This is true for Rosswood Drive at Union Avenue in Cambrian Park.  On both sides of the intersection, there are many homes of 1200 to 1400 square feet (some larger too) all built around the same time.  Both are San Jose 95124 addresses.  Both are good areas – but the 2000 and 2100 blocks are  nicer than the 1800 & 1900 blocks of Rosswood and those homes sell for more. Why? What makes one area sell for more than another?

In the case of Rosswood Drive, part of it has to do with the beautiful canopy of trees that line the two thousand block of Rosswood and the adjoining streets (Bel Escou, Bel Canto, Bel Estos, Esther, etc.). Part of it is just that the homes are a little better maintained.  Historically, Union used to divide the schools too, and that used to be part of the higher prices – but that’s not really the case now.  (A similar jump happens along Los Gatos-Almaden Road by Harwood too – same builder, Leep, but prices nudge up just a little for homes closer to Blossom Hill Road.)

How can you tell, from looking at a neighborhood, how it compares with nearby streets in the same part of town generally?  Sometimes you cannot know from looking alone (for example a flood plain, earthquake fault or school boundary won’t show), but I’ll give you some cues as to what makes areas more or less desireabile visually.

These are some things I teach my San Jose area buyers to watch out for (lower values) in terms of appearance and sounds:
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San Jose is the largest city in Santa Clara County (or Silicon Valley) with about one million residents.  The districts or areas within San Jose vary tremendously in many ways, including their respective real estate markets.

Today we’ll have a comparative look at the median list prices in the housing market in three areas & zip codes of San Jose: Almaden Valley (95120), Cambrian Park (95124) and Willow Glen (95125).  First, how these three areas line up against each other and against San Jose as a whole in terms of the median list prices of homes for sale in the last year.

Please note: the charts below are “live” html and the commentary is appropriate as of today, July 30, 2010.  The charts will continue to change and be updated,though, so it’s possible that a year from now the commentary may seem disjointed.  Now you’ll know why!

First, a glance at Almaden, Willow Glen, Cambrian and San Jose genererally.  Overall, it looks like the higher priced homes are having the most trouble.  A closer look, though, shows that although Almaden is pricier than Willow Glen, Willow Glen’s median list price has gone down far more than Almaden’s.  My guess is that the school districts are having a large influence here – the schools in Almaden range from good to great, whereas in Willow Glen most of the zip code has only average schools.

San Jose as a whole, by price quartile is next.

The lowest priced homes have been inching up over the year. The second price point from the bottom seems to be about even with a year ago, the second from the top is down and the most expensive homes are down by about 5%.

Next, let’s focus on the Almaden Valley area of town by price quartile also:

What a change from San Jose as a whole – all of these price points are down from a year ago. (Buyers, take note: it’s easier to buy a home when you see these conditions.)  The price points are high, so Almaden is behaving like other more expensive areas of San Jose.  Next, Cambrian Park…
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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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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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