San Jose’s Cambrian, or Cambrian Park, area is a very hot seller’s market.  Multiple offers are not uncommon, especially in the Union School District, where schools are trending upward.  My Cambrian Park Real Estate Report has just been published with the updated numbers from the closed sales in April. Please click on the link to see much more information there.

Prices are up nicely year over year! Inventory is crazy low – just 35 homes for sale in April compared to 57 in March and 84 in April 2011. Days on market is far lower too. All around, it is a deepening seller’s market.

Even stronger is the Cambrian condo market, which is skyrocketing!!!  Please see the Cambrian Condominium & Townhouse Real Estate Report for all of the numbers, but I’ll include a quick summary below.

Here again, notice the ratio of active to pending homes, the sale vs list price (over 100%), and most of all, the tremendous rise in both the average and median sales price.  Few homes closed escrow in February, so it is possible that these numbers are a little exaggerated.  We will know more in a month – if it’s a trend or if this is a fluke.

Now let’s work with Altos Research’s graphs and get a feel for the Cambrian realty market in “real time”.  These use list prices, whereas my REReport uses sold data.

First, the statistics by quartile for houses in San Jose 95118:

Next, the stats and trends by price quartile for houses in San Jose 95124:

Median list price of homes for sale in 95124 and 95118 (all quartiles combined):

Very interesting that the 95124 pricing appears to be swinging upward while the 95118 pricing continues to go down.  I believe that this is mainly because the schools in 95124 have been trending upward strongly with the API scores.  Prices are also at a higher level, and those are less impacted by short sales and REOs countywide.  So it may be the result of multiple factors.  (95124 is about 2/3 of the Cambrian real estate market.)

Inventory in Cambrian area of San Jose 95124, 95118:

Surprising, isn’t it, to see how differently these two San Jose zip codes are behaving from each other?

Average days on Market in San Jose’s Cambrian area

And again, really different trends on these neighboring zips, both in Cambrian!

Another anecdotal story to share: Recently I closed the sale on my listing at 5114 Nerissa Way in Cambrian with Union Schools and Alta Vista in particular. We were listed at $579,000 and received 4 offers and sold at $585,000. Interestingly, we received 2 nearly identical “best” offers, both at $585,000. One was completely As Is and the other was almost As Is (they wanted a fumigation and pest clearance provided).  That is usually a pretty good affirmation of market value, and the property did appraise at the sales price.  The other two offers we got were below list price.  One was all cash and it was extremely low.  Buyers who are purchasing without financing sometimes misunderstand the type of discount that their all-cash status will get for them, so sometimes the worst offers are all cash and that was the case this time.

Want more info on your neighborhood, your house, or your target home to buy? Please call me!

Showing properties 1 - 5 of 39. See more 95124 zip code real estate.
(all data current as of 5/18/2012)

1. $525,000 : 3418 Manda Dr, San Jose
   
   3 beds, 2 full baths

   Home size: 1,280 sq ft

   Lot size: 6,000 sqft
   
2. $499,000 : 5134 Leigh Av, San Jose
   
   4 beds, 3 full baths

   Home size: 1,472 sq ft

   Lot size: 6,000 sqft
   
3. $440,000 : 1718 Hogar Dr, San Jose
   
   3 beds, 1 full bath

   Home size: 1,288 sq ft

   Lot size: 5,700 sqft
   
4. $598,000 : 2667 Sutro Dr, San Jose
   
   3 beds, 2 full baths

   Home size: 1,444 sq ft

   Lot size: 6,200 sqft
   
5. $399,900 : 15194 Herring Av, San Jose
   
   2 beds, 1 full bath

   Home size: 1,364 sq ft

   Lot size: 7,965 sqft
   

Listing information deemed reliable but not guaranteed. Read full disclaimer.

Showing properties 1 - 5 of 23. See more 95118 zip code real estate.
(all data current as of 5/18/2012)

1. $699,000 : 5740 Park Manor Dr, San Jose
   
   4 beds, 2 full baths

   Home size: 1,700 sq ft

   Lot size: 6,099 sqft
   
2. $799,000 : 1579 Chambers Dr, San Jose
   
   4 beds, 2 full, 1 part baths

   Home size: 1,984 sq ft

   Lot size: 6,825 sqft
   
3. $570,000 : 5057 Lenelle Ct, San Jose
   
   4 beds, 3 full baths

   Home size: 1,734 sq ft

   Lot size: 7,800 sqft
   
4. $609,000 : 1591 Willowgate Dr, San Jose
   
   4 beds, 2 full, 1 part baths

   Home size: 1,426 sq ft

   Lot size: 6,300 sqft
   
5. $779,000 : 5755 Condor Ci, San Jose
   
   5 beds, 3 full baths

   Home size: 2,168 sq ft

   Lot size: 7,102 sqft
   

Listing information deemed reliable but not guaranteed. Read full disclaimer.

Browse lists of Cambrian & Cambrian Park homes for sale:
Houses for sale in the 95118 part of Cambrian
Cambrian Park Houses for Sale in 95124

Mary Pope-Handy, Realtor, CRS, ABR, e-PRO, SRES, ASP, CNHS, ACRE
Helping Nice Folks to Buy & Sell Homes Since 1993
Co-Author: “Get The Best Deal When Selling Your Home In Silicon Valley”
408 204-7673 (Cell)
emailto: Mary (at) PopeHandy.com
Blog: www.LiveInLosGatos.com & www.ValleyOfHeartsDelight.com

Home buyers (and sellers too) here in Silicon Valley like to “see the comps” when trying to determine fair market value or the probable buyer’s value for real estate.  Usually that translates into seeing what sold & closed escrow recently and for how much.

In a rapidly appreciating market and a strong seller’s market, though, the comps are not so much help as you might hope.  They are yesterday’s news!  What closed escrow last week was negotiated 30 or 35 days prior, in most cases.  By the time a San Jose area home is on record as a newly closed sale, it may already be out of date information. Not only that, but the MLS won’t tell us, at least not in most cases, how many offers there were or details about them - such has how many of them were all cash offers.

I see this mistake a lot in my real estate practice across Santa Clara County.  Clients want to view sales around a property they’re interested in. With our terribly severe inventory shortage, there may not be enough recently closed sales – so we look further out in location, futher back in time.  If prices are going up fast (as they are in Cupertino, Palo Alto and elsewhere), the only way you will be in step with the market is if you also factor in the appreciation that has likely taken place since each comparable property has closed escrow, whether that was 2 weeks ago or 3 months ago.  And that’s hard to guage.

What to do, then?

Your best knowledge will come from or be supplemented by information from pending sales; the most recent ones and closest ones are going to be the best, of course.  This is where your agent may be of great help to you either from the networking he or she does naturally, from direct experience on sales made or lost, or from proactively reaching out to listing agents to see if they can glean some information.

Addionally, you will want to factor in the number of offers a property is getting before deciding the price you will offer.  It is another very common home buyer mistake to look at the price of sold homes nearby, determine what seems fair, and then plough ahead without considering the level of interest that the house or condo is generating.  If there are multiple offers, you can reasonably expect that most of the time (if not all, in today’s market)  the sales price will be above the list price.  It will be unproductive for you to lowball (writing an offer more than 5% or 10% under list price).  Even if your offer is all cash, remember that sellers want the most possible for their property – they are not going to give you a huge discount on pricing.  Some, yes – in my experience usually around 2-3% – but not a huge amount off. They would rather wait a month and get a lot more money!

Factoring in the absorption rate (months, weeks or days of inventory) may be helpful to you also, especially if you cannot get info on the homes which are sale pending. (My Santa Clara County REReport includes this information, btw.)

In summary, don’t just look at the comps – they are a backward and incomplete view of what happened when the sale was negotiated.  Consider what’s under contract or pending now, and perhaps above all, take into account the current competition for the property you want.

Fabulous opportunity in West San Jose – a beautifully remodeled 4 bedroom, 2 bath house with top Cupertino schools and exquisite English country garden is now for sale, offered at $1,099,000 at 1486 Larkin Avenue, San Jose CA 95129.  This is not just any ranch style home in Silicon Valley, but a lovingly and impeccably updated, remodeled and maintained home on a scenic, tree lined street.  A visit will convince you that this house has been cared for and upgraded with a tremendous level of detail and sophistication.  Please stop by during our open houses:  Saturday, May 12 and Sunday, May 13 2012 from 2-4pm.

Top Cupertino schools, all with API scores well over 900!

Schools are a major driver of real estate desirability in Santa Clara County, and nowhere is that more true than in Cupertino and the parts of San Jose which enjoy its schools.  All three educational levels of school enjoy extremely high Academic Performance Index or API scores.

The grammar or elementary school for this property is John Muir Elementary School (API 944).  The middle or junior high school is Joaquin Miller Middle School (API 981) and the secondary or high school is Lynbrook High School (API 943).  All three of these schools are very highly regarded, and in fact prestigious.

Not just a school district – this is a marvelous West San Jose home and yard!

Lest we treat this as though buyers were only interested in schools, let’s talk about this wonderful house too.

The kitchen is an absolute showpiece with a professional grade Viking range, Vent-a-hood, granite counters, ultra hard maple cabinets (painted white), dramatic vaulted ceilings with 2 large, electronically operated skylights, and much more!  Throughout the home you’ll find high quality elements, including dual pane windows, hardwood floors (some under carpeting), remodeled baths, and on and on.  I invite you to have a look at the virtual tour, embedded below, and to read the description on each page.  There’s even more information immediately below that with the MLS information added too.

1486 Larkin Av, San Jose, CA 95129 (MLS # 81217609)

View Virtual Tour

Beautifully remodeled 4 bed, 2 bath home on a tree lined street with best Cupertino schools! Stunning kitchen features Viking range, Sub Zero fridge, dishwasher, granite counters, vaulted ceiling, skylights & more. Remodeled baths. Hardwood floors, dual pane windows. Living Room includes remod fireplace. Dining room open to kitchen & offers access to lush back yard, an exquisite English garden.

Property Type(s): Residential, Detached Single Family

Last Updated	5/16/2012	Tract	n/a
Year Built	1960	Community	Cupertino
Garage Spaces	n/a	County	n/a
Total Parking	n/a	Walk Score ®	38

Additional Details

Features

Location

Listing information deemed reliable but not guaranteed. Read full disclaimer.

Listing provided by Mary Pope-Handy, Sereno Group

(view all details for MLS #81217609)

How is the Monte Sereno real estate market? Because the city is small, with just about 4000 residents, there usually are few homes listed for sale or selling, and with small numbers we can get seeming volatility.  Here are the quick statistics for the closed sales in the last 4-7 weeks to give a sense of how things are going. Sales data for April comes from my Monte Sereno Real Estate Report  and data for the last 30 days comes from me via the MLS (I crunched them this morning).

Median sales price of houses sold in Monte Sereno in April was $1,415,000.  For the last 30 days, it was $2,169,857.

Average Days on Market of houses sold in April was 97.  But for the last 30 days, it’s 78.

The sales price to list price ratio in April was 95%.  The last 30 days it’s up to 97%.

The market is better all around for home sales in Monte Sereno than it was just a couple of months ago. Next, let’s look at the live charts from Altos to see how active listings reflect the market as seen from viewing the solds.

Live Altos Charts for the Monte Sereno Real Estate Market

The median list price of all homes listed on the MLS in Monte Sereno and in San Jose – an interesting comparison!  San Jose has far fewer dips and jumps than Monte Sereno….Good improvement showing recently, though.

Pricing in Monte Sereno, California, by price quartile – the high end took a nose dive on its list pricing for a few months, but now is in recovery too!

Average days on market in Monte Sereno, CA, by price point Interesting that the most expensive homes are not the hardest to sell:

Inventory for all Monte Sereno listings over the last few years (back to 2005) – quite a jump in homes on the market in 2010 compared to normal for this small city:

About Monte Sereno, CA

Monte Sereno is a lscenic, upscale residential community of about 4000 people. It’s located adjacent to the town of Los Gatos and the city of Saratoga, California. There are no businesses in Monte Sereno – just Daves Avenue School, homes, the post office, and the city office building along Highway 9.  It is semi-rural. Some folks mistakenly think that whatever is happening in Los Gatos with the housing market is also reflective of the Monte Sereno real estate market. They are sometimes quite different, particularly as prices are higher in Monte Sereno and about 1/3 of Los Gatos is served by the Campbell or Union School Districts (while only a tiny sliver of MS is in those districts). A couple of years ago, I listed and sold a lovely home on in this city.  You can check out the information on my popehandy.com website (link above).

More info on this city: Official Monte Sereno city website Wikipedia article on Monte Sereno

Monte Sereno Real Estate

With very few exceptions, Monte Sereno consists of houses and estates or luxury homes (there are a few townhouses). Most lots are larger, usually at least a quarter acre lot.  One neighborhood enjoys a shared stable and horseback riding trails (those homes are on about 1/2 acre lots). As of this writing, properties currently available (listed on our MLS) range from about $1,300,000 to more than $5,000,000.  This can vary tremendously.  A move-in ready house will not likely be found in Monte Sereno for less than one million dollars.  (Last year a fixer on a busy road did sell for $750,000, though.) It is not uncommon to spend upwards of $1.5 million in home buying there.

Find Homes for Sale in Monte Sereno, California

Showing properties 1 - 5 of 8. See more city of Monte Sereno real estate.
(all data current as of 5/18/2012)

1. $2,295,000 : 15630 Michael Ln, Monte Sereno
   
   5 beds, 4 full, 1 part baths

   Home size: 3,924 sq ft

   Lot size: 9,583 sqft
   
2. $1,599,950 : 16172 Rose Av, Monte Sereno
   
   4 beds, 2 full baths

   Home size: 2,212 sq ft

   Lot size: 17,327 sqft
   
3. $1,799,950 : 16215 Rose Av, Monte Sereno
   
   4 beds, 2 full, 1 part baths

   Home size: 3,508 sq ft

   Lot size: 9,147 sqft
   
4. $4,500,000 : 16036 Greenwood Rd, Monte Sereno
   
   7 beds, 7 full, 1 part baths

   Home size: 7,336 sq ft

   Lot size: 1.17 ac
   
5. $2,149,000 : 17281 El Rancho Av, Monte Sereno
   
   4 beds, 4 full baths

   Home size: 3,340 sq ft

   Lot size: 10,509 sqft
   

Listing information deemed reliable but not guaranteed. Read full disclaimer.

Multiple offers continue to be a common occurance in the Silicon Valley real estate scene right now.  When there are an abundance of home buyers for one property, it can be overwhelming for the seller.  Some home owners may want to issue a multiple counter offer to the best qualified, most serious bidders.  But not all do.  You should never count on it.

Sometimes property owners in the San Jose area simply accept the best offer.  If so, that’s the end of the story. It does happen.

Often, the highest price is not the offer with the best terms, even in a bidding war.  Home sellers want both, of course – the least risk with the most cash. (Sometimes there are other factors, too, such as a rent back, escrow length, or other issues beyond cash and risk.)  In those cases, frequently the Realtor or real estate sales person (the listing agent) will coach the seller to counter one or more of the better buyers (best prices and terms) to improve the final sale on both counts.   Some sellers don’t want to do this, though – it’s stressful, they are afraid that everyone will say no and they’ll be left with the property unsold.  Alternatively, then, they may counter only one offer – and tell the buyer’s agent that they are the only one, at least for now. If negotiations don’t work with the first buyer, the listing agent may go back to the others.

Meanwhile, everyone waits, everyone wonders what’s going on.  The longer it takes to hear back, usually the lower the odds are that their contract will be the successful one, or even one getting a counter offer.

Why didn’t I get a counter offer?  Why didn’t the seller at least give me a second chance? Buyers wonder this all the time.  Some buyers submit 5 or 10 offers, all unsuccessful, and they still wonder.  The harsh reality is simple: your offer wasn’t good enough.  Either your price or your terms (or supporting documents) didn’t cut it. Write your contract as if you only have one chance, because that’s the reality most of the time.

What is an exclusion in a real estate contract? What is an inclusion? Both of these refer to fixtures at the property which is for sale.

Generally speaking, a fixture is any item affixed or attached to the house, townhouse, condo or property which is installed with the intention that it be there permanently. For example, cabinets in the bathroom, kitchen or elsewhere are fixtures. So are lights mounted from the ceiling, built-in ovens, in-ground (not potted) rose bushes.  The exception to the rule is anything attached solely for earthquake safety.  This would be the case if you have a large hutch which you have bolted to the wall so that it doesn’t topple in the case of a big quake. In Silicon Valley, fixtures are normally included with the sale of the home.

Exclusions refer to fixtures which the seller does not want to include with the sale of the real property (real estate).  For instance, there may be a light fixture in the dining room which is a family heirloom and the seller does not want to leave it with the house.  It would be noted either in the MLS, with a note at the property or mentioned when the buyer’s agent calls the listing agent to ask about offer instructions. Other examples could be a special fireplace screen, curtains in one or more rooms (may match a bedspread or other decor), or even a rose bush in the garden that has sentimental value.

Inclusions refer to personal property (property which is not affixed) which the seller will leave even though it is not required since it’s not attached.  Commonly we see refrigerators, washers and dryers included, even when they are not attached.  Sometimes furniture may be negotiated also, such as patio dining set, a sofa or perhaps a very large dining table that won’t fit into the seller’s new house, but fits where it is perfectly.

It is important to note that if an inclusion is mentioned in the MLS, it still should be written into the purchase agreement if the buyer wants it (and this is written into the contract form as a reminder). Otherwise the seller is free to donate, share or sell those items.

When in doubt as to whether or not something is included or excluded from the sale, always ask before writing or accepting a contract to avoid unhappy surprises or conflicts later!

Home buyers in Silicon Valley are getting frustrated, discouraged and disheartened as they write offer after offer, only to lose out in multiple bid situations. It’s not just the poor FHA home buyer either – this is happening to those with 20% down and more too.

What can be done to improve the odds of success?

Sometimes the buyer’s agent either does or doesn’t do certain things which can impact how your real estate purchase offer is viewed by the listing agent and seller(s).  Here are 5 important things that the buyer’s Realtor or sales person can do which will help the odds of success:

1. The agent should read the MLS printout carefully to see if there are any instructions regarding offers.  This one may seem obvious. but too many buyer’s agents just draft the offer and send it in, ignoring information that will probably be useful (such as offer deadline, preferred form - CAR or PRDS contracts, availability of disclosures, the request to call before writing the contract etc.).
2. The buyer’s agent should call or email the listing agent before writing the offer (and after reading the MLS!).  Sometimes there are requirements or just preferences that won’t be known unless contact is made.  Additionally, though, the listing agent will simply want to know about the level of interest and not have any surprises – it’s a courtesy call.
3. The agent should ask if it is possible to present the offer in person…and be willing to do it, of course.  Many seller’s agents won’t want a live presentation (most would email), however the fact that your agent is willing to spend the time and make the effort to present in person usually speaks volumes about his or her professionalism. It’s also a hint that the agent is a cut above most.  In my real estate practice, several times I beat out other offers by asking if I could meet with the listing agent and sellers to discuss my clients’ offer, and then doing it.
   
4. Ideally, the offer package should be comprehensive and come with as much documentation as possible, including an offer summary (by the buyer’s agent), pre-approval letter, copy of the initial deposit check, contract with all initials and signatures and all mandatory spaces completed.  A good buyer’s agent will also run comps and coach the clients on offer price and terms and may encourage the buyers to write a letter to the sellers.  Depending on the circumstances, “proof of funds” may be wise to include too.  Each situation is a little different but the more comprehensive the buyer’s offer package is, the better the odds.  Many agents send over only partial documentation. Don’t let this happen to you!
5. Finally, the buyer’s agent needs to behave with professionalism and courtesy.  This is another point that might seem obvious, but sometimes buyer’s agents say things which are not polite to either the listing agent or, worse, directly to the seller.  When in the presence of the seller, the listing agent and the public especially, a buyer’s agent should not loudly or harshly criticize the property.  That’s just plain hostile and it won’t make the listing agent want to work with that agent (now or later).  Realistic assessment of a home’s flaws is totally fair, but doesn’t need to be done with a bullhorn.  Discretion is appreciated.

It doesn’t happen often, but sometimes agents just don’t slow down long enough to get the process and the offer package “just right”.  It matters because frequently there are several equally good bids on a property, and the one that stands out as better, even by a small margin, will either win the deal or at least win a counter offer.

For more reading:

Silicon Valley real estate bidding wars
Is your lender keeping your offer from getting accepted?
Home buyer tips

Real estate professionals are becoming increasingly aware of the need for caution in their line of work.  It is good for our Silicon Valley buyers and sellers to be aware of some of these issues, since it may not be obvious to everyone:

1. Don’t have your first meeting with a stranger at a home for sale, especially if it’s vacant.  It is best for consumers and Realtors to initially meet in a public place, such as the realty office or a coffee house, and for others to know where you are during that meeting.




2. For sellers who are marketing their home for sale without professional representation, be very careful about showing your property to people who call you from an ad or otherwise learn that your home is for sale. A few years back, an elderly woman showing her condo as a “for sale by owner” was attacked and killed in her northwest home by a pretend buyer.  (Real estate licensees know that agents are murdered around the country when alone or sometimes even in pairs, but home buyers and sellers are not usually aware of this risk to our safety.)  Homes which are shown by real estate licensees will usually be on a lock box – you can be gone when the home is shown, and each agent who accesses the key using the box will have his or her information recorded.  Safety is greatly increased. (I have looked but cannot find the link to that story about the older home seller. If any of my readers remember the city or town and can share that info, I’d be most grateful. I think it was in the greater Seattle area where that crime happened.)




3. Similarly, if you have listed your San Jose area home for sale with a broker or agent, buyers should come to view your house through the proper channels (i.e., during an open house or with their agent, who called ahead of time).  Do not open your door and allow entry in by people who simply “pop by” when they saw the sign, whether they are buyers or agents.  If agents, they can pull up your property’s information on the MLS, call and make an appointment.  If you have a lock box, you can perhaps let them enter if the agent is willing to use his or her display key to open the lock box – officially recording the visit with the agent’s ID now known.




4. For buyers who see signs on properties: do not presume that the house is empty and that you can peer into windows or walk around into the back yard of the house. (I have seen people do this and it is creepy at best.)  You don’t know the situation – the house could be for sale but not viewable.  Some homes are offered with the instructions that the home can only be seen once an offer is accepted (“write offer subject to inspection”).  The home could be tenant occupied.  A resident could be ill.  Children could be in the house and if they look up and see a stranger at the window it will scare them badly. Don’t do it.  (Most buyers won’t do this, but I have seen it often enough that it warrants saying.) If you need more information, call your own agent to pull it up.  If you aren’t working with a Realtor, call the listing agent. In all cases, don’t go onto the property except to grab a flier from the box on the sign post.




5. When entering a home that you have scheduled to see, be cautious and enter slowly to avoid surprising anyone or being surprised yourself.  Sometimes sellers forget that you’re coming, have the time mixed up, or someone in the house failed to tell someone else about the appointment.  When I go into a property with my clients or alone, while previewing, I do so slowly.  First I knock and/or ring the doorbell.  I wait. Sometimes people are in the bathroom, have stepped into the yard or can’t respond fast.  Give it a minute.  Then I’ll use the lockbox, and while opening the door and stepping in I’ll call out loudly, “hello! Real estate!” so that anyone in the far reaches of the house can hear me.This is where you’re most likely to encounter a surprise – when you first enter the home.  I’ve seen just about everything, including unclothed people running for cover, couples who were occupied with each other (they knew we were coming right at that moment!), all kinds of things.  Once I had a small child with a baby snake come running at me, pushing his pet into my face.  (Good thing I like animals and didn’t freak out.)   Sometimes sellers are home but don’t answer the door, so as you go through the house you may find them. (I hate that!  They should at least hollar for us to use the lock box.)  I’ve stumbled onto sellers sleeping on a couch, showering (we leave fast) etc.  It’s not good to either suprise sellers or to have them surprise you!




6. Be cautious when trying to locate the correct house, especially in the foothills or mountains where it can be hard to find some addresses due to private roads, unmarked houses etc.  Once I went down the wrong driveway and had a man emerge from his house holding a rifle.  Another time I went down a wrong driveway – should have been the one next door – and the owner drove up behind me and blocked me in such that I had no exit, came over and started hollaring at me in  a very threatening way.  Turns out I needed to be at his sister’s house next door, but the homes were not well marked and I simply had the wrong leg of the road.  He apologised but it was harrowing.  Both of those experiences have made me appreciate cell phones and GPS (both happened in the early to mid 90s). (The listings agents for these homes should have directional arrows and alert the neighbors about properties for sale nearby.)

It’s very important, when buying or selling homes, to keep your wits about you.  Crazy things can happen so pay attention and follow some basic rules of caution for your safety and that of those around you.

One of the mental traps I see that can foul up real estate expectations across Silicon Valley is the over emphasis placed on “price per square foot“. Here’s where the internet can seriously mislead people into thinking they understand home values more than they do, resulting in botched negotiations, frustration and disappointment. So let’s talk about it.

As one factor among many, it’s completely fair to include the price per SF when trying to determine what a home’s probable market value ought to be. (Remember, too, that a house, condo or townhouse isn’t worth one exact number, but a range – because the terms involved also impact the sales price.)  Although price per square foot is one way of finding approximate value, often is not the best, especially if you use it alone, because there are other factors besides the square footage of the house.  Here are some of the other factors that can mess up that valuation based on price per SF alone:

• precise location (view, proximity to something undesireable)
• lot size
• lot shape & access (flag lots may sell for less than homes directly on the street)
• whether the house is below or above grade/street level (most people don’t prefer being down from the street)
• back yard size
• amount of remodeling (and how recently it happened, whether with permits/finals)
• care for the home
• additons vs original square footage
• whether the street is a good one or full of parked cars & RVs
• sale type – regular vs distressed
• landscaping (especially “hardscaping” – patios, pools, summer kitchens etc.)
• amount of down payment
• whether it’s all cash, conventional financing or if the seller carries a note
• whether there were multiple offers soon after it hit the market or if it was one offer after languishing for weeks or months

The variance from “all original” to “all remodeled” alone can swing value 10% – 20% in the San Jose area.  Add to that other factors and the divergence in value can be much, much greater.

Additionally, smaller homes tend to sell for more on a per square footage basis than larger houses. The reason why is that kitchens and bathrooms are the most expensive rooms, but often there is just 1 kitchen and a similar number of baths with smaller vs larger homes.  Even if the properties are comparable in many ways, a 10% difference in square footage can make the price per SF very wrong.

What about new construction?

In a tract neighborhood of NEW HOMES, if the locations are similar and finishes are similar (no upgrades), there’s a better shot of the price per SF being useful information. Many new homes, though, offer a completed home with basic finishes, and the buyer must opt for upgrades such as adding a fireplace with custom mantle to the family room or master bedroom, better appliances or counter tops to kitchen and baths, etc.  Further, some new homes have basements and it’s possible that they may not be included in the square footage – and yet, of course, they may have immense value!

So even with tract homes, there are lots of caveats.  Additionally, the older a home gets, the less likely this approach is to be accurate because some owners will remodel their home every 10-15 years and others won’t do a thing, not even basic maintenance, and the home will be “tired”( at best) very soon.

Online and automatic valuations

Often when home buyers look at Silicon Valley properties for sale they compare the list prices via online valuations.    The difficulty is that the “auto-comp” figures are often wrong because they are based primarily, if not exclusively, on the “price per square foot” of the house’s listing. The online valuations often pick the middle of the viable range between “total fixer, probably needs to be demo’d” to “completely remodeled or brand new home”.  Most of the time, the “range” is about 10 – 15% from fixer to fixed, so most of the time, the online valuation will be right in the middle with a 5% swing either way. But some of these sites (if you read their disclaimers) say that they are within 80% of market value most of the time.  That’s not too accurate.

Let’s use round numbers to make this easy.  Let’s say that the online real estate pricing says that a home is probably worth $1 million dollars.  It might be that the actual pricing range goes anywhere from $900,000 to $1,100,000, but the virtual pricing tools don’t know if the home is next to high voltage lines, a busy road, is in the lesser school district, is remodeled or what.  Or, conversely, if it’s a short sale, has been a rental property that got totally trashed, or has terrible terrible neighbors in the immediate vicinity who have garage sales on a weekly basis and need safari gear to get through their front yard.  The true market value could be 5-10% higher or lower. It just depends.

So please take these things with a grain of salt.  If you look at the online pricing and decide it’s correct but the house you’re buying is in a lesser location or in worse condition, you’ll overpay.  And if it’s better, you’ll be too low and will wreck your odds of succeeding.  Don’t forget to include market heat when trying to determine the likely selling price of the home you want. If similar homes are getting multiple offers and selling 5% or more over list, then the sale from 3 months ago is only old news, not today’s prices. In those cases, if you only rely on comps, you will find that you miss the mark every time.  Home buyers who lowball their offers in a rapidly appreciating market will find that an expensive mistake to make, with the biggest risk being that they could even price themselves out of the market entirely.

My suggestion is to hire a good Realtor who can assist you with pinpointing the pricing, whether you are buying or selling, so that you can negotiate competitively and get the best deal you can for your home.   I don’t mean buyers hiring the listing agent, either.  When you do that, the agent also represents the seller and may be inclined to fight just for the other side – or for the highest price. Get your own real estate sales person who’s in your corner, helping you to evaluate properties and market value, and who will provide you good counsel all the way through the shopping, contract writing, negotiations, inspections, closing and beyond. There’s no reason to go it alone, and in fact doing so could cost you more in the long run.

For more reading on the same topic:

Assessed Property Value vs. Market Value of Silicon Valley Real Estate

Sometimes the List Price Isn’t the Expected Sales Price, So Run Comps!

What’s my home worth? Home owners may request an online evaluation by me by filling out this form. (The more info you provide, the more accurate the results will be

Several years ago, perhaps around 2005, there was an elderly woman I met (at my dad’s retirement communithy in San Jose) who wanted to hire me to list her Santa Clara house for sale.  She was a nice lady, very kind, but mentally, she seemed to “come and go”.  One moment she appeared lucid and could comprehend our conversation.  A few moments later, her mind seemed to be gone.  She was suffering from dementia and it came and went like a fast moving tide.

What to do in a case like this?  I could not take her listing with her signing the paperwork because I knew that she did not have the mental capacity – at least not consistently – to understand what she was signing. (One cannot legally enter into a contract if the mental capacity is lacking.)   As much as I had wanted to list and sell her home, I could not do it if she was to be the one signing the contract.

I spoke with her adult son, and I explained my concerns. I suggested that he obtain a power of attorney so that he could sell the property for his mother and provide for her best interests regarding the real estate transaction.   He expressed to me that he wanted his mother to be in charge, to feel that she was in control.  When I reviewed with him my experience, and explained that I felt that she lacked the mental capacity to enter into a contract, he stunned me by replying “that’s what the other Realtor told us, too”.  They had met with another agent who was equally uncomfortable getting this home owner’s signature on the paperwork.  That should have told them something!

Sadly, the grown son would not agree to working as his mom’s signer with a power of attorney. He insisted that if they hire me, she do all of the paperwork.  I knew that this would be a disaster on every level.

So I had to bow out.  I don’t know how many other real estate licensees they talked with before finding someone here in Silicon Valley who would list the house, but I am hoping that each Realtor said the same thing so that they didn’t put this poor woman in the position of having to deal with the contracts, disclosures, and other paperwork which would no doubt agitate and confuse her further.

It’s a tricky thing when our elderly relatives need to sell a beloved home or investment property but aren’t mentally sharp any more.  For their own protection, it is best if they can allow someone trusted – ideally a close family member – to take the reigns on the home sale.  If a real estate agent or broker suggests to you or to your family that perhaps someone else should be signing the paperwork, there’s a good chance that this is something to be investigated a little more.  Talk with other Realtors or brokers. Speak with a good real estate attorney.  Real estate licensees seldom ask for family support regarding signatures, but if they do, please take it seriously – it is most likely in your loved one’s best interest.

For further reading:

Can home sellers back out of the contract or force a buyer out?

What is a seller contingency?

What’s the Silicon Valley real estate market doing? Silicon Valley is composed of many micro markets, and they may all behave independently of one another, but we are seeing some general trends.We’ll have a look at them today.  Things have really, really changed from six months ago. It’s very dramatic.

First, a city by city comparison of the numbers for the county and Campbell, Cupertino, Los Gatos, Saratoga, San Jose (as a whole), Sunnyvale, etc. This first chart is for houses in the cities and towns of Santa Clara County. On the first line, which is for the entire county, please notice the sales price to list price ration – it is over 100%.  This is perhaps the best indicator of the market heat we see here.  Also note how low inventory is for the county – from a year ago, it’s off 29.2% (and that year was low also).

Santa Clara County residential real estate statistics by city for single family homes March 2012

Perhaps not surprisingly, the sales price to list price ratio is highest in Palo Alto, where it was nearly 109%. Mountain View came in at 103%, Cupertino and Los Altos at 102%, Los Gatos, San Jose and Sunnyvale at a little over 100%.  Some areas, such as Monte Sereno, have so few sales that their numbers fluctuate wildly (in the case of Monte Sereno, best to look to similar areas of Los Gatos for the best sense of pricing, usually, as they share schools, parks, police etc.).

Next, the same type of data but for condominiums and townhouses rather than houses & duet homes:

Santa Clara County residential real estate statistics by city for condos & townhomes March 2012

The condo market has been taking a beating for years, but at long last, the sales price to list price ratio is now very close to 100% (99.9% for the county) and many areas are more than 100%: Campbell, Cupertino, Los Altos, Milpitas, Mountain View, and Palo Alto. Most of the rest of the county is at 99% with just a couple of exceptions.  What’s happening? The inventory here tells the story: county wide, it’s down 74% from last year.  In Campbell and Los Altos it’s off 75%.

Inventory is at record lows, buyer demand is way up: we have a strong sellers’ market with multiple offers and overbids

First, there’s extremely low inventory. In February there were just 1389 single family homes for sale in Santa Clara County.  A balanced market is somewhere around 3000 homes – so this is quite severe!  In fact, it’s the lowest amount of inventory for any February going back 10 years.  Here’s what it has looked like in other Februarys, per my Santa Clara County Real Estate Report (you can see these numbers yourselves):

2012  1389
2011  1812
2010  1739
2009  5443
2008  5338
2007  2876
2006  2235
2005  1412
2004  1672
2003  3410
2002  1965
2001  1784

Prices are moving up

Second, prices have started to climb in much of San Jose and other areas, especially in cities or towns with really good public schools like Cupertino and Palo Alto.  Talk of triple or other “dips” is long gone. Looks like 2009 was our low point for pricing, and since then we’ve been bouncing along the bottom – until now.

How do we know that they are rising? For those of us who are in the market, we are seeing it each time we have a listing that gets multiple offers and sells so high that we know that we have an “appraisal problem” or when we put offers out for buyers that are over list price with great terms but we lose out to a bidder who’s all cash and $100,000 over the list price, where there are NO comps to support it.  And that is what is happening right now in many areas and price points.

Also, of course, we can do the math.  I’ve been crunching numbers on what’s happening in Cupertino (insanely fast rising prices), Saratoga, Los Gatos, Campbell, Almaden, Cambrian, Willow Glen, Santa Clara and more  – all with rising prices very noticeably but not 10% per month, which appears to be what’s happening in Cupertino.

Other things are at play, too – unemployment is better, Apple stock is trading at $600 per share, and of course, there are IPOs happening on the Peninsula and in the South Bay.

How is this different from the seller’s market we’ve been in for the last few years?

It is true that it’s been a seller’s market for awhile here, but it was a seller’s market with soft or even falling prices.  Buyers were willing to buy as long as the prices were so low that they hurt.

Now the shoe is on the other foot.  Almost overnight, it went from a seller’s market with soft pricing to a seller’s market with rising prices, and in some areas such as 95129 with Cupertino schools, it’s dramatically rising prices.  Really not the same thing, though the following chart might mislead you into a complacent sense that nothing has really changed.  That would be a mistake.

Every market is good for someone. Right now, it’s good for sellers, especially if they are selling and moving out of the area. But many sellers continue to wait, hoping that in a year they will sell for much more.  They may well be right.  Meanwhile, the dire shortage of inventory combined with buyers who’ve been sitting  on the sidelines for years waiting for prices to quit falling have all jumped in at once.  It’s been like this before – it was like this in the late 80s when Jim & I were trying to buy our first home, and a decade later when we did our move up.  We saw craziness in 2000 and again in 2006-2007.

The risk, of course, is that in this overheated market, what we really have is another bubble.  It’s certainly possible but one never knows when it’s happening if that’s the case or not.   To those sellers who want to wait, please understand that this can be a risky game. It’s very hard to time the exact top or bottom of the market.  If you are ready to move, analyze everything.  What you hope may be the sales price in a year may or may not be there.  It could be better than today, it could be worse.  My sense is that it is likely to be better but we don’t ever know what’s around the corner.  If you are thinking of selling now, the opportunity is fantastic.  Call or me if you’d like to discuss your plans and hopes.  I’ve been selling homes since February of 1993 and know the ups and downs of the market in Silicon Valley.

Mary Pope-Handy, Realtor

Working with home sellers and buyers in Santa Clara County
and focusing on the “West Valley” areas of Los Gatos, Almaden, Cambrian, Saratoga, Willow Glen, Campbell, Cupertino, Monte Sereno, Santa Clara, and other parts of San Jose and the rest of Silicon Valley

Sereno Group
408 204-7673
mary (at) popehandy (dot) com

The Oaktree Park neighborhood in San Jose is a scenic residential community with wide appeal to home buyers due to good Almaden schools, close proximity to large parks and is one of only a few areas in Almaden Valley which includes a cabaña and swim team.  Additionally, this area is very convenient as it’s  close to schools, shops and commute routes to downtown San Jose and much of Silicon Valley. It is a fairly intimate neighborhood with 156 homes.

Where is the Oaktree Park neighborhood?

The Oaktree Park subdivision is within the boundaries of Meridian Avenue, Redmond Avenue and Mcabbe Road on three sides and the Jeffrey Fontana Park on the north side.

The census bureau (and perhaps also the city of San Jose) has attributed names to some parts of Almaden and this neighborhood falls into the Crossgates section.  I do not believe that most residents refer to this area that way, though.  Perhaps more likely they’d call it part of the greater Fontana Park neighborhood.

Oaktree Park Neighborhood in San Jose (Almaden Valley area of SJ) - click on image above to go to live Google Map

What schools serve the Oaktree Park neighborhood in San Jose?

The public schools for Oaktree Park are within the San Jose Unified School District:

Los Alamitos Elementary School (API 916 in 2010)
Castillero Middle School (API 806 in 2010)
Pioneer High School (API 823 in 2010)

Los Alamitos Elementary and Holy Spirit Elementary (Catholic) are both just a couple of blocks from Oaktree Park.  Additonally there are 2 preschools really close too:  Precious Preschool and Shepherd of the Valley Lutheran Preschool.

For more information and links for schools, school districts, API scores and maps of boundaries lines for schools in the Almaden area of San Jose, please also read:

Schools, API Scores & Maps of School Boundaries in San Jose’s Almaden Valley

What are homes like in Oaktree Park?

Homes in Oaktree Park are single family dwellings – all detached houses (no townhouses or condominiums).  These are primarily ranch style or two story ranch style houses, built in the early 1970s  on lots of about 8000 to 9000 square feet, though a few are more than that.  Interior size runs between about 1600 square feet to about 3000 square feet (if added on). Prices may be in the mid 600s for a smaller home, needing work and a less desirable location (such as on a busy road or immediately adjacent to the high voltage power lines that run through the park) to perhaps a little over a million dollars for a beautifully updated or rebuilt larger home in an ideal location within the neighborhood.

Oaktree Park Neighborhood Home for Sale: 6064 Ostenberg Drive

This week I put a fabulously remodeled and expanded Oaktree Park neighborhood home on the market!  This exquisite house has an awesomely open floorplan with an amazing kitchen – a gourmet’s delight!  Have a look at the details! Open Sat/Sun, April 21-22, 2012 1-4pm.

We're sorry, but we couldn't find MLS # 81213394 in our database. This property may be a new listing or possibly taken off the market. Please check back again.

More information on the Oaktree Park Neighborhood!

Oaktree Park Neighborhood fun: the cabaña, clubhouse, swim team and parks

The cabaña and community grounds are located on Crestoak Court (where a large oak tree did once stand).  The swim team, the Sharks, serve children up to age 18.

The HOA has a “welcome new neighbors” page with some great information on nearby amenities.

There’s a huge amount of open space and parkland adjacent to Oaktree Park, with both trails for walking, biking or rollerblading as well as expanses of lawn and natural open spaces which invite deer and other indigenous wildlife.  Nearby parks include the Jeffrey Fontana Park, the Guadalupe Oak Grove Park  just beyond that and the TJ Martin Park a little to the west of these two.  These three parks are connected and provide a fabulous network of trails.

Turnover is pretty low in this neighborhood as residents appreciate the access to the community pool, the parks, schools, shops and commute venues.  In many ways, this tidy little neighborhood offers the very best of Almaden: community, multiple reasons to be outdoors and a pretty location with lovely views.

Please stop by a Sereno Group office in Los Gatos, Los Altos or Santa Cruz to take part in a FREE e-waste, e-recycling
collection event on   Sunday April 22    9:30AM- 3:30- PM.

Metech Recycling has an incredible 95% success rate with getting these items securely recycled for manufacture!

Items accepted:
Monitors/TVs
Computers/Laptops
Cell phones/Telecom Equipment
Wire/Cable/PC Boards/Scrap Metal
Video tapes
Mice/Keyboards
Printers/Fax/Copy Machines
Stereo Equipment, Speakers
DVD/CD/MP3 Players
Microwave Ovens

Please, No Household Appliances:
Vacuum Cleaners, Toasters, Ovens, Etc.
Also no lights of any kind, no batteries

Where to go to drop off the approved items?

Los Gatos/Saratoga
214 Los Gatos-Saratoga Rd.
Los Gatos 408-335-1400

Los Altos/Palo Alto
369 S. San Antonio Rd.
Los Altos 650-947-2900

Santa Cruz
2407 Porter St. #150
Soquel 831-460-1100

Service Provided by
GreenMouse, Inc. a CA State Approved Col lector , CEW ID# 103153
442 Reynolds Ci rcle, San Jose, CA 95112
(408) 464-9999
www.greenmouse.com

Historic Naglee Park Home Tour in San Jose April 21 2012

The historic Naglee Park Home Tour in San Jose will take place April 21,2012 from 10am to 4pm.  Sponsored by the San Jose Woman’s Club, this is the third annual tour.  Iit includes an elegant tea served in the garden of the Catholic Bishop of San Jose, Patrick J. McGrath, a Naglee Park resident.

For all of the details on this event, please see the SJWC website page:

http://www.sjwomansclub.org/tour.html

The Silicon Valley real estate market is so overheated in many segments (some areas, some pricepoints) that there’s a lot of exhaustion to be found among consumers, Realtors and others involved (inspectors, title company employees, etc.).  Why is that?

• Home buyers in the San Jose area are finding that most of the time, they have to write a few offers before one can get accepted. The rejection is both disappointing and exhausting, and every successive attempt is stressful since most buyers understand that with multiple offer situations, the odds are against them.
• Home sellers in Santa Clara County are finding it a challenge to work like crazy to make their property as close to ideal as possible, only to find that multiple offers either aren’t ideal (or still seem scary, if they are ideal) or perhaps they don’t come at all. Even in a hot market, not every home sells!  Some home owners work so hard at fixing up their house or condo to sell that they somewhat fall in love with it all over again…and that makes it hard to sell. Their pre-sale exhaustion also can make them prone to feeling overwhelmed.
• Real estate agents or licensees are exhausted because there is so much URGENCY that it’s hard to get any down time (let alone a day off). Most real estate licensees  I know are really burned out – or very close to it – due to working 24/7 for the last 2+ months.  (Buyers are very time consuming and may require many many attempts before being successful in getting into contract. Sellers may have worries and find themselves needing a lot of reassurance – even when it’s not really urgent at all.)

Together with the extra stress of the market which changed so fast are a LOT of emotions (as well as mistakes that might not be made if everyone were calmer and better rested).  Buyers grieve when they lose the house.  Sellers worry that they sold too fast, too low, too easily.  Buyers, when successful, worry that they have overpaid (“buyers remorse“).  Agents are burning the candle at both ends and can find themselves a little frazzled too.  Sometimes when our clients have a bad day, they can make it contagious by yelling at us or otherwise being overly difficult because they are stressed. Even agents dealing with other agents can be a headache if the other one is upset, burned out, sloppy or emotional.

Time out!  What most everyone needs (myself included) is a breather.  Everyone needs a little time, a little down time, to feel a bit more human.  Take a day off. Decide not to answer the phone or email before or after set hours.  As for me, I’m going to work on that.  I hate to see email accumulate in my inbox, I feel like I have to address it right away (as if it were a text message about a house burning down).  But being in reactive mode, no matter who we are, is not so good in the long run. When the going gets tough, it’s more important than ever to get enough sleep, exercise (esp time away from the computer) and diversions.  Too much intensity can make for more friction, and in the long run, that is bad for the transaction, bad for our relatinships and even bad for our own personal health.

So in this overheated, stressful market – let’s all try to step back enough so that we can clear our heads a little and keep a semblance of balance. It will make for better real estate transactions in the long run, no matter whether we are buying, selling, or assisting clients as realty professionals in the South Bay.

More reading:

Qualify The Advice You’ll Accept When Buying or Selling a Home in Silicon Valley

Impulsivity and caution in home buying