Median List price for San Jose 95129

Average Days on Market for 95129

Inventory of houses for sale in San Jose 95129

How’s the Cupertino real estate market right now? Let’s start with the most basic window into conditions: supply and demand. (This graph and more info comes from my Cupertino Real Estate Report. Please click on the link for much more data and information – with statistics and trends dating back many years. Also you will find reports which are monthly, quarterly and annually generated. Finally, there’s a “property analysis” tab which enables you to check sales – and see images – around any Cupertino address. Please allow the analysis tab to do its slow load – it’s worth it – enjoy!)

Cupertino Real Estate Supply and Demand

Cupertino Real Estate Market Barometer of Supply and Demand

The realty market barometer is going through the roof!  This implies that it’s very easy for Cupertino home sellers to get their properties into contract and to the closing table, that it is a hot seller’s market in Cupertino.  Please note the darkest line reflects housing inventory – and it’s been plummeting for months.  (Look at each year for October through December and you will note that the pattern is seasonal – but the actual number of homes available does vary considerably.)  Now please note the pale gray line, which indicates the number of homes selling and closing escrow.  The bigger the gap between these lines, the more choices buyers have, and the narrower the gap, the fewer.  Right now, for the first time covered by the chart above, these lines have met, meaning that homes are selling at the same rate that they are coming on the market.  When supply matches or outpaces demand, prices nearly always rise.

But what about home prices in Cupertino?

Here’s a look at the numbers, in brief, as reported with closed sales in December 2011.  Surprisingly, although the market appears to be very hot, prices don’t seem to reflect that – perhaps “yet”.  The median sales price of houses in Cupertino are off significantly from both the month prior and the year prior, and the average sales price is down a little. The number of sales is off a little and the list price to sales price is off some too (both year over year and month over month). Meanwhile, the days on market are growing pretty steadily.

What’s happening? Why this contradiction between the market barometer and pricing?   First, the days on market reflect the inventory which recently sold, not the inventory which is available today.  This tells us that many homes that have been on the market awhile are now being purchased. (Probably others went off the market for the holidays, which is typical for the season.)

With interest rates for conforming loans dipping below 4% (I believe this is an all time historic low), many buyers are deciding it’s time to get off the fence and purchase a house at last.  But there really isn’t much inventory – it’s about 34% lower than the month before and almost 38% lower than the year before!

I think that we will see prices beginning to move upwards with January’s closings.  The market this month in the west valley areas is much, much more active than a year ago.  This is anecdotal but I have been speaking with a lot of Realtors about how busy they are and everyone seems to be on overload with new buyers trying to get a home before prices or interest rates go up.  I expect to see the prices of houses being sold in Los Gatos, Saratoga, Cupertino – at least in the more affordable price points of these areas – to tick upwards this month.  We’ll know in early February if I’m correct!

Now let’s turn to another tool to see how the Cupertino market is faring for listed properties.  For this I will use graphs from Altos Research, to which I also have a subscription. These are LIVE CHARTS and will automatically update themselves weekly – so even if the article is older, this info is now!

Cupertino Median List Prices Compared to Neighboring Saratoga, Sunnyvale and Los Altos

We know that the median sales price in Cupertino has slipped. But what of the list price, and how does it compare to other areas nearby?

Los Altos is faring the best of these 4 areas. Saratoga was dippping but now rising again. Sunnyvale has been somewhat flat recently. But Cupertino’s prices are continuing to fall. Perhaps these low prices are the drivers for the crazy hot market activity.

Cupertino median list price of houses by price quartile

Focusing just on Cupertino, let’s see how the information looks if we break it down into the pricing tier. Often the entry level houses are a very different “market” than the luxury homes segment.

The last few months have had noticeable declines for the lowest three segments, but there’s been an uptick (until recently) for the most expensive properties in this city.

What if we look back more than a year? Combining the quartiles, the trends look pretty stark:

Here’s the same data just for the top quartile, the most expensive properties in Cupertino:

For the 2nd top tier (upper middle):

3rd level or lower middle:

And most affordable Cupertino houses or lowest quartile:

Cupertino Days on Market by Price Quartile: What’s Selling Fastest

Not surprisingly, the luxury market has had a harder time selling than entry level houses in Cupertino. This is true for most of the West Valley areas of Santa Clara County. Here’s a look at the days on market (DOM) for Cupertino by price point over the last year.

Remember, all real estate is local. For information on your exact area or price point, please contact me. I work with my clients to pinpoint the pricing.

What drives the Cupertino real estate market?

The residential real estate market in Cupertino, California, is driven in large part by the extremely high quality of its local public schools.  Many in Silicon Valley would state that for San Jose area home buyers, Cupertino offers the best “bang for the buck” when one lines up the cost of purchasing a home to the schools’ API scores. (Conversely, some residents are concerned that the very top schools – including but not limited to Cupertino – are so focused on academics that there may be too much pressure on kids and may lack balance for them.)

Other drivers are, of course, the local economy (such as the initial public offerings happening with some of the Silicon Valley tech giants), the availability of more affordable financing, and how the realty market in general is performing for any particular price point or particular school area. (Even within Cupertino, some schools are much more in demand than others.)  Comments in this article refer generally to this city of about 50,000 residents – real estate is local, though, so for precise information in any given area or tier of the market, please contact me!

Houses for sale in Cupertino California

Please browse houses for sale in Cupertino, listed from the lowest prices up to the highest.

Showing properties 1 - 5 of 17. See more city of Cupertino real estate.
(all data current as of 2/11/2012)

1. $649,900 : 10160 Calvert Dr, Cupertino
   
   3 beds, 2 full baths

   Home size: 1,562 sq ft

   Lot size: 5,643 sq ft
   
2. $748,800 : 18920 Tilson Av, Cupertino
   
   3 beds, 1 full bath

   Home size: 1,039 sq ft

   Lot size: 5,400 sq ft
   
3. $749,000 : 10335 Moretti Dr, Cupertino
   
   4 beds, 3 full baths

   Home size: 1,267 sq ft

   Lot size: 4,947 sq ft
   
4. $839,000 : 10240 Yoshino Pl, Cupertino
   
   3 beds, 2 full baths

   Home size: 1,688 sq ft

   Lot size: 3,168 sq ft
   
5. $879,000 : 10285 Moretti Dr, Cupertino
   
   4 beds, 3 full baths

   Home size: 1,787 sq ft

   Lot size: 6,000 sq ft
   

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

Many Silicon Valley home buyers rely on PMI, or Private Mortgage Insurance, to purchase a house or condo. But what is it and who needs it?

Private mortgage insurance is usually required with loans in which the buyer has less than a 20% down payment.

PMI does not protect you, the residential real estate consumer. It protects your lender in case you default!

FHA loans don’t have PMI but instead there is a “government guarantee” and for that you pay a premium – so not called PMI but it works similarly. The cost may range from 1 – 2.5%.

FHA or Conventional with PMI?

If you have less than 5% down, FHA will be your only option. But between 5 and 20% down, you may choose.

If you are trying to decide between FHA and conventional loan products with PMI, talk to you mortgage broker or banker to see which one really costs more in the long run, factoring in the total package of interest rates, premium rate etc. (FHA loans may come at a lower interest rate but with other added costs – so don’t just compare interest rates.)  The result may depend on the loan to value of the property, your credit score, and other factors. There don’t seem to be any “easy answers” as to which one is necessarily better.  This decision will require a little research!

If you expect to be bidding in multiple offers, this is another consideration too – it can be very hard for home buyers in the South Bay to win out in multiples if they are using FHA financing (as opposed to conventional).

Finally, like HOA dues, PMI is not something you can usually deduct from your income taxes (unless the PMI cost was simply rolled into your interest rate).  Please talk to your lender and tax professional for more information on PMI and the tax ramifications.

Related reading:

Is your lender pushing you into an FHA loan?

The challenge of being an FHA home buyer in a seller’s market

First Time Home Buyer with FHA Financing? Make Sure That Your Offer is Well Drafted!

For several years, we’ve seen declining residential real estate prices in much of Silicon Valley.  In many areas, though, prices are now either flat or bouncing up and down within a small range such that the probable buyer’s value or market value is very close to where it was a year or two ago.  Today’s San Jose Mercury News reports

“In a report to be released Monday, Clear Capital, a real estate valuations company in Truckee, predicts that prices will remain almost flat this year — compared with a 4.7 percent drop in 2011 — in the San Francisco-Oakland-Fremont metropolitan area, including Contra Costa County. Silicon Valley should see a 1.6 percent increase in home prices, compared with a 2.5 percent drop last year, the company said.” (Bolding mine.)

A small, modest increase in pricing is usually healthy for home sales as it gives buyers the confidence needed to finally take the plunge. It’s immensely challenging for people to buy when they believe any product – cards, home appliances or houses – will be cheaper in a day, a week or a month.

Home sellers who have wanted to move up from a starter home to the one they hope to spend decades in have felt somewhat trapped by lack of equity in many cases.  In others, the idea of selling for less than at the peak was so upsetting that they felt terrible about moving ahead prior to a full recovery.  Most now understand that getting back to prices at the peak of the realty market in San Jose and Santa Clara County will take many years.

Some of them are tired of waiting and are electing to forget about the profit they could have had if they’d sold at the peak.  These folks have decided to make the jump now to get on with their lives, despite less equity than hoped for initially, while at least interest rates are so favorable.  (It should be added that the move-up home will now cost less also!)  This can be a very wise decision since buying a house, townhouse or condo is usually not one purchase but two: you’re buying the loan product also and the total cost of home ownership should factor in both the costs over the lifetime of the loan as well as the purchase price.

Have you been “on hold” and “waiting for prices to recover” before moving up?  It could be a long wait.  What else is on hold with it?  Better schools for your kids?  More room for visiting friends & family?  The view you’ve always wanted?

A client of mine said to me the other day, “it’s time for us to ‘bite the bullet’ and make the move“.  They know that they won’t get the price they originally wanted, but instead only what the market will bear.  They want to get on with their lives and quit waiting on the market – which is completely out of their (and my) control.

On the positive side, though, two years ago interest rates were hovering at 5% for a 30 year fixed, conforming rate loan.  Today they are at 3.91%.  The home they want to buy is 3-5% less than it would have been 2-3 years ago.  Prices are lower for selling, but the cost of buying their next place and also the cost of a loan is lower too. The math may work out very much in their favor after all.

Some Silicon Valley home buyers do not want to have their own buyers agent, but instead expect that they can find properties in the San Jose area that they want to see and request that the listing agent show it to them in a private appointment.  These same potential buyers may be surprised that the listing agent may refuse to show them the listing outside of a regularly scheduled open house – that is, if the seller is permitting open houses.

What’s going on?

In earlier articles we’ve discussed the need for a buyer broker agreement (verbal at the least, but possibly in writing) and why you, as a buyer, ought to have your own representation at the negotiation table.  (If you missed these, see the links under “related reading” below.)   Today I want to dispel the myth that the listing agent is required to open up and show condos or houses for sale to anyone who calls and requests seeing them and explain why that’s the case.

Showings of homes for sale are determined by the listing agreement or contract between the home seller, the listing agent or Realtor and the broker

The most important thing for buyers to understand is that the accessibility of the home for viewings depends upon the agreement, verbally or in writing, between the owner of the property and the agent/brokerage hired to market, negotiate, and sell the real estate.   It’s not an “on demand” situation where an interested buyer can insist on seeing the property as desired. Here are some of the expected scenarios and reasons why showings are somewhat restricted most of the time:

• Some properties are tenant occupied and it may be the case that you cannot even see the house or condo until after your offer is accepted. Most often it will be challenging to see homes with renters in them, but it is possible, usually, to see them prior to purchasing. (This is less true with duplexes, triplexes and four plexes. Apartment buildings are always sold “subject to inspection”.)
• Other times there may be a restriction such as 24 or 48 hours notice required for showings when homes are owner occupied.
• Most of the time, the seller has requested that any private showings, by appointment, involve ONLY pre-approved buyers. The sellers don’t want to waste their time with tire-kickers.  They want serious buyers.
• Most of the time, a seller will not want the listing agent to also represent the buyer and will expect serious home buyers to have a buyer’s agent.  If you are working with your own agent, that’s who should show the home to you.  If you have your own buyer agent, he or she can see what is involved in showing the property to you by looking at the agent version of the MLS (which includes showing instruction information and restrictions)
• Some sellers want open houses, some don’t.  For those selling a home during the holidays, often the for sale sign and lock box are removed and it becomes harder to get into these properties.
• Safety is a HUGE concern, both for home owners selling on their own and for realty professionals. Each year, Realtors and other real estate professionals are injured or killed in their line of work. If this surprises you, ask yourself how smart is it to meet total strangers at an empty house? It’s not.  If you want the listing agent to show you the house, expect to be asked a lot of questions (are you preapproved? if so, with who? how can we verify that?) and usually expect to meet the agent at the office first. Many Realtors will ask to photo copy your driver’s license prior to taking you to the home – this is for personal safety reasons. We realize that you will feel uncomfortable but please remember that real estate is risky for us and we absolutely must be cautious.

Related reading:

Do You Need a Buyer’s Agent? Or Should You Find a Home, Then Use the Listing Agent?

Silicon Valley Home Buyers: Should You Use a Buyer Broker Agreement?

Should you market your home for sale through the holidays?  It’s now mid November, and if your property has been listed for sale but not gotten an acceptable purchase offer, you may be thinking of taking your house or condo off the market until sometime in the new year. Is that a good idea?  Below, please find some considerations for you as you decide what to do. We’ll

Pricing: will the home sell for more now, or in the new year or spring?

No one can tell you whether prices will be better or worse in the first quarter of 2012 than they are now.  I just returned from the annual conference for the National Association of Realtors (of which I am a member), and quite honestly, I got conflicting information.  Some reports indicate that prices will be lower in the spring, others that they will be higher – or interest rates may be higher, which puts pressure on pricing since affordability is strained when that happens.   Pricing is local, though – so no matter what’s happening nationwide, it could be different in Silicon Valley, in Almaden, Cambrian, or Los Gatos, or in your subdivision or school area.  But bottom line: we really don’t know what pricing will do, we only know the probable buyer’s value – a range of likely sales prices – right now.

Being disturbed during the holidays

Many home owners really don’t want a lot of traffic coming through the home from Thanksgiving through the New Year due to visiting relatives, events planned such as parties at the home, the presence of gifts and concerns over theft, etc.  They may also be worried about rainy weather and carpets getting soiled.

At the same time, though, during the holidays many of us make our homes warm, bright and inviting, particularly if we decorate for Christmas, Thanksgiving, Hanukkah, etc.  Even the smells can do wonders: gingerbread cookies, Christmas trees, hot mulled wine…. With family and friends coming to visit, we tend to “deck the halls” and make our houses really feel like homes.  For many condos, townhouses and houses, during the holidays these homes really show at their best.

The potential to sell a home in December is actually a lot higher both because of the decor and ambiance, but also because so much of the competition is withdrawn from the market.  The odds shift much more in your favor if you keep your home on the market!

Market the home – but differently!

A great solution is to continue to market the home for sale, but to do it differently:

• remove the for sale sign & outside flyer box
• remove the lock box, showings by appointment only (by agent or seller)
• remove the seller’s phone number from the MLS – all appointments will be by appointment only
• flyer stand, disclosure binder and other marketing materials out of sight
• keep home listed for sale on MLSListings.com but more restricted hours

This sort of marketing will result in fewer showings but showings of more qualified, more motivated buyers.  It will be less intrusive to you and everyone in your household too.

Each year, Inman News sponsors a “people’s choice” voting for the most influential person in real estate.  Inman nominates 100 strong candidates but voters may also write in someone not listed.  This week, I was very deeply honored to have been included on such a prestigious list of real estate leaders nationwide, and I’d be thrilled if you would consider voting for me.

Where to vote:  follow this link and the fields for entering your desired winner’s name and info will be about 20% of the way down (midway through the article and just after a large ad) – deadline is Dec 1, 2011:

http://www.inman.com/news/2011/11/2/2011-peoples-choice-real-estates-most-influential

What is Inman looking for with this people’s choice voting?  I’ll quote a couple of passages and then comment.

“It’s time to vote for a leader who you believe has had the most substantial impact on the real estate industry in the past year. “  

“The Inman 100 list recognizes those whose voices and actions have the power to change the industry. Among them are individuals who embody strength, common sense, innovation, ingenuity, perseverance and progress. They include the industry’s brain trust and dealmakers, and those outside the industry who impact the business of buying and selling homes.”

So how did I, Mary Pope-Handy, a Silicon Valley Realtor with Sereno Group in Los Gatos and not a CEO of a big brokerage or large vendor, get named with realty’s best & brightest? It’s very humbling. But I think I have a few ideas as to why I’m getting the national spotlight. I’ll break it into a few bullet points, for those who may only know me from local blogging or home sales.

• In 2007, together with Frances Flynn Thorsen, I won the Project Blogger contest (sponsored by Inman and Active Rain) and have been a leader in blogging and web marketing circles ever since.
• In 2011 I was named “the best real estate agent in Silicon Valley” by the San Jose Mercury News. (Many of my clients now come to me from my blogs.)
• Speaking & training: In addition to residential real estate sales in the San Jose, Los Gatos, Saratoga and greater Silicon Valley area (Santa Clara County and nearby), I do speak at real estate meetings, trainings and classes on blogging, social media, real estate and related topics; to keep it short, I’ll post a link rather than list my involvement:
  Read more about my speaking & training on my Valley of Hearts Delight website.
• While blogging is the most important part of social media for me, I am engaged on Facebook, Twitter, Linkedn, YouTube and other venues too. Through these, I have a pretty good reach or impact on the web.  This is good for my realty business generally but also good for the owners of homes I list, as they get fantastic exposure when listed for sale with me.
• I don’t just have one website or one blog, but rather a network of them.  I may be a little crazy for embracing blogging to this extent (yes, it is time consuming), but I  hear time and again how much the info I put out there is helping people, both consumers and other real estate licensees alike (and not just folks buying & selling homes).  I’ve had agents at Sereno Group thank me for blogging, saying that it raises the bar in the industry, makes the company look good, and in one case, by association, apparently I helped a colleague to gain a listing (he told me that I make him look good because it shows the strength of our firm).  That’s a positive influence too.
• When I train, speak to or blog for a real estate agent audience, I try to provide helpful tips and encourage authenticity and transparency and to skip the games, the slick closing techniques or any smoke & mirrors. In other words, I really do try to raise the bar on our standard of practice.   I can be outspoken on what I believe is right or wrong with either the way the business is worked or, perhaps more of interest at the moment, the way social media is being employed to help agents to run their business. Sometimes I hold positions that aren’t popular but I hope that at a minimum, it helps agents to reconsider putting their values into action for the betterment of consumers as well as the real estate community.

Who, then, is a big real estate influencer?  I suspect that everyone on this highly esteemed list really is one.  Heads of brokerages directly impact how those companies work, their standards and requirements, how they hire and train and so on.  Real estate coaches (and there were several of them on this collection of super stars) directly impact their clients – agents and brokers – and help them to improve the way they work, suggest how those individuals can best use their time, etc.  I could go through the list and indicate why each category matters.

Only about a dozen of us on the list are simply Realtors, in the trenches, selling and networking and changing to meet the changing demands of the industry.   My hat is off to each person named, whether a real estate agent, vendor, CEO, manager coach or any other category.  And there are many other great people who weren’t there in writing who also deserve kudos as well.  I think it’s fair to say that everyone listed this year or in recent years past has been a highly influential force in the real estate landscape today.  We can’t vote for them all.  I do hope that you will vote for me!

How is the Williams Elementary School area of San Jose’s Almaden Valley 95120 doing in terms of the real estate market? Today we’ll look at the Williams area as compared to Almaden as a whole to see. First, the basic realty trends and stats for this nice section of Silicon Valley side by side for this year only (I pulled and crunched all of this data from MLSListings.com myself tonight, “deemed reliable but not guaranteed”):

1. Comparison of the average price per square foot for all of Almaden (including the Williams area) with just the Williams area of 95120:

While there is some fluctuation from one status to the next, at the end of the day there’s one number that matters the most, and that’s what actually sold and closed.  In the Williams area, homes have sold at an average of $418 per square foot while in Almaden generally (including this area), the price is $399 per square foot – about 5% less. This is tremendously important to understand if you are trying to purchase a home in the Williams area – homes there do, in fact, sell for more than in most parts (perhaps all parts) of the Almaden Valley.

Next, the stats for just the Williams area followed by the stats for all of 95120.

2. Real estate market statistics for Williams area of Almaden year to date by status:

3. Real estate in Almaden (San Jose 95120) as a whole (including Williams neighborhood):

4. Some graphs on the market in these two areas of San Jose 95120:

All Almaden - average sales price per month

And next, just the Williams area within 95120:

Average sales price per month in Williams School area of Almaden

Days to sell (days on market prior to going under contract) in Almaden…

Almaden (all) days to sell over time

Same data but just for the Williams Elementary School neighborhood in San Jose:

Wiiliams area of Almaden: days to sell over time

Supply and demand -  San Jose 95120 homes for sale and homes sold each month:

All Almaden homes for sale vs sold

Next, supply and demand in just the Williams area (most months, the ratios are tighter in Williams):

Williams neighborhood - homes for sale vs sold (supply demand)

New listings – first, all of Almaden (buyers will be interested in seeing the price spread):

Almaden listings by price range each month

Wms area price spread – it’s a smaller neighborhood with fewer inexpensive, and more expensive, properties:

Listings by price range in Williams area of Almaden Valley (San Jose 95120)

Months of inventory for San Jose 95120 (Almaden Valley or Almaden area) – six months is considered “balanced”, less a sellers market and more a buyers market.  It’s been pretty good in this corner of Silicon Valley, as you can see, except for the worst of the market in 2008-09 especially.

Months of inventory for all of San Jose 95120

Next, same info but just in the Williams subset of the Almaden market:

Months of inventory in Williams area

Note that the market in the Williams area has been a little harder hit than Almaden as a whole for the months of inventory. Why is that? My hunch is that it’s a couple of things: first and foremost, these homes are more expensive. The typical 4 bed, 2 bath home is about $1 million in Almaden generally but about $1,150,000 in the areas with the best schools, including Williams and Graystone.  The more expensive homes have been challenged by the financing regulations – these are not FHA homes and require a lot of cash down. Many would be move up buyers are stuck due to lack of equity.  A secondary reason may be the further commute.  Many buyers are more frugal now that gas is hovering near $4 a gallon.  Whatever the cause, these premier homes are not selling as well as many of their owners would like to expect.

List price to sales price ratio Almaden

And finally the same list to sales price ratio just in Williams:

Sale to List Price Ratio in Williams area of Almaden

I hope you’ve found this information and analysis helpful.  Whether you’re buying or selling, it’s very helpful to know the local market.  These types of posts do take a lot of time to produce, so I don’t do them so extensively so often, but I can do this type of thing for my clients. If you are looking for a Realtor who’s committed to giving you top grade information so that you can be best informed, please call or email me. I’d love to have the chance to chat with you and see if we might be able to work together on your next purchase or sale in Almaden or anywhere in Santa Clara County.

mary (at) popehandy (dot) com

Related reading:

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

The RE Report for Almaden Valley (updated monthly, stats also quarterly and annually going back 10+ years)

What should you look for when buying a luxury home in Silicon Valley? Whether it’s a move-up purchase or a first home, there are a few tips which will be helpful for you to know going into it that will make the whole home buying experience smoother and easier.  We’ll hit on 3 areas: first geography & construction, second hyper local factors that impact market value, and finally qualities or features of the property or house itself.

It’s hard to assign an exact price tag on what constitutes an estate or luxury property, but in and near Silicon Valley, in most regions it’s the $2,000,000 and up price point (it will be less in Morgan Hill, Coyote and Gilroy – and likely more in Hillsborough).

1. Geography and Bay Area Construction: it’s different here!

The first and most important thing to understand is that real estate and housing construction vary from one region of the country (or the world) to the next.  This is true for all types of homes, actually, but perhaps more obvious in the priciest homes. Luxury real estate in Silicon Valley is a little different from similarly expensive homes in other parts of the country due to our climate, soil conditions, and natural hazards, such as earthquakes. What seems mandatory for a high end home (and might be ideal to have elsewhere) could be a problem here, so it’s helpful to literally understand the lay of the land before you get too far along the home buying path. A couple of quick examples:

• A fabulous home in Boston or anywhere in New England may be built of brick.
• Here, a brick house is seldom seen because of earthquakes – we need our houses to move and bricks are not usually too good at that!

I mention these two upfront because well intentioned friends and relatives may want to stress the importance of this or that in a property – and it may simply not apply here. (Please see article: Qualify The Advice You’ll Accept When Buying or Selling a Home in Silicon Valley)  If you are non-native to the San Francisco Bay Area, you may have assumptions about construction or architecture that may not work here. Please just be aware of that possibility.

2. Understand the importance of hyper local factors on the market value of a property

Schools can be a main driver for home values in the luxury market as all other segments.  Home buyers may not know that the town or city boundaries are usually irrelevant to school district boundaries. Here are a few examples:

• In Saratoga  there are 3 high school districts and 4 elementary school districts.  Before buying anywhere in Saratoga, then, you’ll want to know which district is which and where you’re buying.  If you want to utilize private schools, you may be delighted to find that you can buy more house for your money in one area of this lovely city than another.  Or you may want one school area over another for any number of reasons.
• In Los Gatos there are 2 high school districts and 3 elementary school districts.
• In the Almaden Valley area of San Jose, there are 3 high school districts and 3 elementary school districts

Often the lesser public school districts will have a lower lid on pricing than the very top districts or schools, so it’s important, when analyzing the pricing of an estate home, to factor in the weight of the school.

Geography can be surprisingly important.  Sometimes being on one side or the other of a major road or landmark can swing value 3% – even if it’s the same city, same zip code, same schools!  I see this in Los Gatos along both Blossom Hill Road and again at Los Gatos-Almaden Road: people prefer to be closer to the foothills and prices jump noticeably just for being on one side of these roads than the other.

Walkability is key for many Silicon Valley home buyers, though perhaps less so for some luxury buyers since the larger parcels that often come with them preclude much walkability.  Not always, though – in Palo Alto, Los Altos, Saratoga, Los Gatos and other Bay Area spots like Burlingame or San Mateo, some of the premier homes are not on acre lots but are “in town”.

3. What to look for in the estate property or high end home itself

At this point it’s a little trickier as each home buyer may have different priorities, likes/dislikes and tastes – so these are general guidelines only.

1.  Buy with selling in mind – you may have this property for 2 years, for 20 or more, but if you purchase an expensive home that is just too bizarre for the general consumption, you may be stuck with it when you are ready to sell it.
2. Location, location, location is so overstated that it’s nearly effete, but it bears repeating anyway.  Do you want to buy a $3 million house in a $1 million neighborhood? No, you probably don’t because it will really kill your resale value later.   So too if you buy raw land or a “dozer” – don’t overbuild for the neighborhood.  Try to be mid-range but don’t find yourself in the top 25% for home values in your area.  (NB: in some areas, like Menlo Park, neighborhoods are fairly irregular or non-conforming and you find little houses that need work next to McMansions.  It may not be possible to find conforming neighborhoods.  If you love the area anyway – go for it – but realize the risks.)
3. Quality construction and laoyout or floorplan matter.  Many home buyers care about Feng Shui and the orientation of the home and its elements.  But beyond that there are certain things that most buyers want or don’t want, and if your property violates these “rules” it can be harder to sell later.  Here are a few:
• It’s considered poor to be able to see a toilet from the front door
• The layout is less desirable  to have to go through a room to get to another room or to part of the house (such as going through the family room to get to the bedrooms)
• It is better to have a formal entry than to come straight into a living room, especially in a high end home
• The master bedroom should have its own private en-suite bath (this might seem obvious but you’d be surprised how many expensive houses have 2 bathrooms but neither dedicated to the master bedroom)
• Best to have the master bedroom face the back  yard and not the street
• Better to have more land in back than in the front yard
• If you like to entertain, look for a large kitchen that includes 2 dishwashers, at least 2 regular ovens plus a microwave, a vegetable sink as well as the regular ones, and if possible, also a “butler’s pantry” between the kitchen and formal dining room.
• If the house has 2 stories, look for at least one bedroom and full bathroom on the first floor (and possibly a half bath as well so the guest bath is private)
• The nicest luxury homes may have 2 laundry areas: one on the first floor and one on the main floor, if it’s a 2 story home.
• Most home buyers looking at properties over $1.5 million want to find the master bathroom equipped with a large soaking tub, separate shower, and dual vanities. Jetted tubs are not as popular as a few years back due to concerns over bacteria lingering in the plumbing, so more often the tubs are “soaking” and not “jacuzzi” types.
• The master suite often includes a small wet bar or coffee bar as well as a fireplace, walk in closet(s) and private deck or balcony.  In recent years these rooms have gotten bigger (and sillier – how much time do people spend there?) – a trend I believe will change over time.
• Luxury homes or estates usually have a minimum of a 3 car garage. (I’ve seen properties with as many as 10.)
• For the ultra luxury estates, usually there are guest or servant quarters (and likewise, in 2 story homes, a back staircase too).
• Pools tend to be found among high end homes, but sometimes also tennis courts, game rooms, indoor bowling alleys or other sports outlets (indoor golf driving or rifle shooting ranges too).
• Other rooms: libraries, offices, media rooms, hobby rooms may be included. Sometimes the home office or library may have a full bath nearby – a hint that it can double as a guest room.
• Green building: a growing trend is toward making high end homes eco-friendly or green.  This may include the types of materials used in construction (a percentage recycled or of easily renewable sources), heating & cooling systems that can close off or turn on various parts of the house so it doesn’t all need to be heated or cooled, high levels of insulation to make the home “tight” and not have energy losses. Possibly solar panels to warm the water in the home or pool.
• Years ago there was a lot of focus on wiring for computers in estate properties.  This is still the case but with the advent of wireless for everything, it’s not so critical. However, wiring for TV or movie viewing as well as musical entertainment throughout the home is very common with luxury properties – many owners want to be able to begin watching in one room and seamlessly move to another if so desired.
• In the luxury market it is very common to find security systems which include cameras at various locations.  In the ultra high end houses, there may be “safe rooms” too.

At the end of the day, much of what is included should reflect your values and the way you want to live.  Some luxury homes will have a private bath for every bedroom – but I’ve had clients say “why do I want that? I don’t want to spoil my kids or have more bathrooms to be cleaned”. How do you want to live?

There’s a balancing act between buying the home you want to enjoy and either overspending on a house or area or making a poor choice on an expensive ticket item that could be a great asset instead. It will help a lot to get good, local guidance from a trusted resource who’s got your back.  Looking for that helpful real estate adviser? Give me a call or email me and we can chat at my office, yours, a coffee shop, park, or anywhere convenient.

As an aside…this is the 500th article on this site, the Valley Of Hearts Delight blog or www.SanJoseRealEstateLosGatosHomes.com. ….  Thank you for reading!

 For more reading:

Cracked Foundations, Adobe Clay Soils and Water in Silicon Valley

What To Consider When Buying a Hillside Home in Silicon Valley

Where are Santa Clara County’s Earthquake Faults and Flood Plains?

The Silicon Valley Luxury Home Market (view a list of homes for sale, read more on criteria for location, amenities etc.)

How common are “all cash” transactions for Silicon Valley real estate right now?  Throughout Santa Clara County, they were 20% of all sales among houses, duet homes, condominiums and townhouses (class 1 and class 2, does not include mobile homes, 2-4plex or apartment buildings or raw land).

Some areas and some types of sales are more frequently all cash than others.  Here are a few quick stats for the last month (last 30 days from today – numbers from MLSListings, crunched by me – disclaimer on good intentions but no guarantee):

• Santa Clara County: 20% all cash
• San Jose (entire city): 24% all cash
• San Jose short sales: 33% all cash
• San Jose bank owned or REO sales: 37% all cash
• Short sales & REOs were 48% of all sales in San Jose in the last month
• Of SJ homes listed at $300,000 or less: 48% all cash
• Los Gatos & Monte Sereno: zero sales all cash
• Saratoga: 29% all cash
• Almaden Valley area of San Jose: 14% all cash

Some of these sales will have no financing and the new owners will occupy the home.  Particularly in lower priced homes, though, these are investor buyers who will be renting out the property.  This is often the case with the lower price distressed properties in particular.  In higher priced homes, some new owners will put financing on the property after close of escrow.

With the crazy new demands that keep coming at us from banks and new requirements being imposed on appraisers, now more than ever, cash is king.  That doesn’t mean that the cash buyer will get a deep discount, but there will be a slight one in most cases and certainly preferential treatment that will create a great advantage in multiple offer situations.

Learn more about buying and selling Silicon Valley real estate with cash offers:

Cash offers: what do you need to know if buying “all cash”?

Q & A: Making an Offer

What’s My Silicon Valley Home Worth? Estimating the Probable Buyer’s Value  (financing impacts market value)

Smart, saavy Silicon Valley real estate agents won’t take just any listing.   New agents (or brokerages, for that matter) or those struggling may be less picky.  This may be confusing to home owners who find that some Realtors will agree to list the home, others won’t – so let’s discuss it a little.

Real estate licensees aren’t just people who hold open houses on weekends.  Rather, real estate agents are independent businesspeople in the business of selling real estate. Many of them work 50+ hours per week.  In order to be successful, they have to evaluate the probability of success, whether with buyers or sellers, before deciding to take on those clients.  If they agree to work with buyers who never buy or sellers who never sell, they will be out of time, out of money, and if they make this judgement mistake too often, out of business entirely.   In the last 4-5 years about 1/3 of real estate salespeople have left the industry.  Those who are surviving or thriving are very judicious about how they expend their time and resources.

Under some circumstances, home sellers may project enough “red flags” or have unreasonable expectations such that real estate agents will turn down the chance to list their home.  Here are a few things I’ve run into over the years, either personally or heard about from other agents who said no to sellers:

1. Unrealistic expection on likely sales price of the home (demanding more than the probable buyer’s value of the home)
2. Unwilling to compensate agents or brokers as they require OR expecting them to take on far more work than is to be expected in selling a property (such as overseeing the entire remodel of a house – we are not general contractors!)
3. Overly restrictive showings (too much advance notice, insisting that listing agent be present for all showings)
4. Not permitting some basic marketing or access avenues (no open house, no sign, no lockbox) or unwilling to follow sound professional advice on staging, presale inspections to make the property attractive to buyers – these are “basics”
5. Problems with showings (messy, smelly homes or sellers insist on staying home during showings, follow buyers around in the house etc.)
6. Secretiveness – when sellers won’t level with agents about their plans it sets a bad, even scary, tone that causes agents to worry about hidden risks
7. Nastiness, second guessing or micro-managing – some sellers may want to call the agent 8 or 10 times per day or desire to oversee even the smallest detail on marketing the home (see every email sent, for example).  Others can be rude or insulting.  Some constantly double check everything the agent says to verify every angle or detail and then quotes back to the agent “well another agent I know says…” which is frustrating and insulting.  Sometimes listening to others at work, who are unqualified to give real estate advice and getting that “over the cubicle wall advice”, causes home owners to not follow their agent’s advice (see # 4 above).
8. Concerns over legal problems and liability, such as a home owner with dementia selling the house rather than the adult kids or other friends or relatives getting a power of attorney to do it for the parent (I have run into this directly). If there are any mental capacity issues, it is a lawsuit waiting to happen.

Most of the time, real estate agents want to list good homes and have the opportunity to market and sell them.  If they (or I) see enough “red flags” with a seller or the property, though, it’s time to decline the opportunity.  Often times, these same houses do not sell the first time they are on the market but later become an expired, withdrawn or cancelled listing.  (Sometimes they simply take a very long time to sell as the owners adjust to market realities and begin to accept their agent’s advice.)  Sellers wonder to themselves, “why didn’t my house sell?”  The answer is often an inflated price but just as often there are other problems compunding the failed sales effort too, very frequently an unwillingness to follow professional real estate advice.

Not every home will sell.  A wise real estate sales person will not get hooked into a listing agreement where the seller isn’t as motivated to sell the property as the agent is to sell it.  This is a team effort, requiring a shared vision of what needs to happen.  Even under the best of circumstances, homes don’t always sell.  So if there are big issues from the seller or the way the home is shown, it’s a bad business decision for the real estate licensee to get tied to them – it’s too much like trying to do the job with one hand tied behind your back. Who agents and brokers work with is ultimately a business decision.  If they are turning you down for the listing contract, at the end of the day it’s a statement about your or your property’s business risk. If you are confused as to why they decline the opportunity to list your house, townhouse or condo, you can always ask them, and most likely you’ll get a helpful answer.

Some first time home buyers in the San Jose or Silicon Valley area get confused by the “assessed property value” of houses, condos, or townhouses: they mistakenly think that this number has some bearing on the real estate market value.  It doesn’t.  The assessed value is used only for determining the amount of property tax being paid.

Residential real estate in California is reassessed upon transfer of title, or change of ownership, in most cases (there are some exemptions). From there, the assessed value can only go up 2% per year at most (thanks to the passage of Proposition 13 in the 1970s).  When property values decline, as they have recently, owners of properties with higher than market value assessments can appeal and get a temporary rollback in valuation for the purposes of having property taxes lowered.  This is very very common (and even so, the assessed value is usually still off as it’s based loosely on the January values of that year – the values are often higher than market value for these petitioned properties).  The tax assessor’s office has a lot of latitude in determining the assessed values; it is nothing at all like an appraisal, which should use strict comparisons.

Let’s look at a few hypothetical examples, taking tract housing with the same square footage, layout etc:

1 – If a couple purchased a Cambrian Park house in 1960 to 1970 and paid $20,000 for that property, but today’s value is approximately $500,000, the property tax being paid will reflect the long term ownership and won’t be based on the current market value.  That couple might be paying $600 to $800 per year in property taxes with a corresponding “assessed value” of about $52,000.

2 – The property next door, with the same floor plan, same exact improvements, that was bought yesterday for $500,000 will have an assessed property value of $500,000 (reassessed upon change of ownership) and property taxes of about 1.25% per year, or $6,250 per year.  Same house, same everything – except length of ownership.

3 – Now let’s say that same layout, same street, same builder, same schools, same condition – sold at the or near the height of the market for 25% more or $625,000. The owners of that San Jose house might have a property tax bill reflecting the higher price paid, so about $7,812.50 per year.  These homeowners are unhappy that the values have slipped, unhappy that they are paying taxes based on equity that they don’t have, so they gather some comps and appeal the Santa Clara County Tax Assessor’s office to get a rollback on computed valuation and therefore lower property taxes.  After reviewing the numbers, let’s say they are granted a temporary lower value of $550,000 (it’s seldom accurate and is often high with these appeals) and taxes paid get readjusted to $6875 for that tax year.

So the same house but with different owners can have wildly different assessed valuations: $52,000 or $500,000 or $550,000.  Only one of these reflects an accurate “market value” – the one that was bought yesterday.

Even then, there are caveats, so don’t accept any “simple answers”!

The property that closed at $500,000 may have been sold As Is and the buyers may have agreed to do $50,000 worth of improvements that were needed.  In that case, if you compare the same floorplan in the same little development or subdivision, your estimation of value could be off by 10%.  It is important to find out the details of the sale, and often those are not in the public print out, but only in the real estate licensee version.

Understanding market value is not a simple or easy task most of the time. Don’t make the mistake of factoring in the assessed property value – it will only muddy the water and not provide any constructive information to you.

Sellers, if your assessed value from the county tax assessor’s office is very low, realize that some home buyers (either looking for an excuse or simply not educated) may try to use that low number as a reason for a terribly below market offer.  If you have petitioned for a lowered value, this may especially be the case – so it might be good to disclose what you’ve done upfront.  Talk to your Realtor and be prepared.

For more reading on real estate valuation:

What’s My Silicon Valley Home Worth? Estimating the Probable Buyer’s Value

Why Do Agents Suggest That Sellers Price Their Home “At The Market”?

The Santa Clara County (Silicon Valley) Real Estate Market Trends Report – published early each month

Pricing Your Silicon Valley Home Competitively

Request an online pricing evaluation of your Santa Clara County home by Mary Pope-Handy (free)

Info from SCC tax assessor’s office on Prop 13

Our fall weather here in Silicon Valley is acting like spring weather – bouncing back and forth between warm, dry days and cold, wet ones.  Should this impact the way you present your home to the real estate market if it’s for sale?  Absolutely.

If you want to make the best impression on potential home buyers, your house, townhouse or condo needs to be inviting no matter what the weather may be doing.  In the heat of summer, sellers are tempted to close up all the curtains to keep out the sun and heat – it’s a mistake because buyers typically don’t respond well to dark, cave like homes.  The wet weather brings different challenges that also must be handled appropriately if you are to snag that best buyer!  Here are a few tips to make your listing the one that appeals to Silicon Valley home buyers who come out to see it:

1. Make sure that your downspouts are directing rain water away from your house or any structures (often 6′ or more is suggested); it is imperative that there be no “pooling” of water, especially near the home – this will cause buyers to worry about water in the crawl space and what it may be doing (foundation cracks, mold, etc.)
2. Trim bushes and vegetation back from walkways and sidewalks.  When it’s wet outside, these lovely bunches of greenery collect water and as visitors go past them, they can spill water onto the passers by. Not pleasant.  Look at your sidewalks, driveway, and walkway and make sure that wet bushes and branches won’t be hitting anyone coming up to your front door.
3. If your gutters leak, they’ll be noticed and will indicate that your property hasn’t been properly maintained, so repair or replace them.
4. Indoors, keep the heat on if the temperature would be below the comfortable range – cold buyers don’t linger, and buyers who don’t linger don’t buy! I suggest at least 66-67 degrees.
5. Open up the curtains and turn the lights on.  Cloudy, rainy weather can make any house look dark and you want to chase the darkness away with good lighting and access to natural light.
6. Many home buyers will want to remove their shoes if it’s wet out. If you can provide a bench on the front porch or entryway, that would be very welcoming.
7. Keep the air fresh. In the damp days, we sometimes keep homes a little too closed up and that can be unappealing. Baking cookies or bread can help, but there are other things that work too, such as fresh flowers.  I don’t recommend scented candles or sprays since these often make buyers wonder what you’re hiding.  It’s a matter of degree – you want to make the air pleasant without overwhelming visitors.

When home buyers and their real estate agents venture out on a rainy, wet day to see properties in San Jose, Los Gatos, or anywhere in the Bay Area, you know that they are serious and highly motivated.  It may seem like a hassle to take these extra steps for showings of your house or condominium, but it’s well worth it because these are exactly the home buyers you’d like to impress.

For further reading on home selling in Silicon Valley:

Home selling posts on this website

Selling your home in Silicon Valley on popehandy.com

Home seller resources on ValleyOfHeartsDelight.com (sister site to this one)

Selling a house or home is usually very challenging and emotional, even under the best of circumstances.  It’s all the worse if the folks on the other side of the transaction – the buyers, their real estate agent or both – are difficult, rude, hot headed, verbally bullying, not performing on time or otherwise making the escrow and sale more upsetting than is necessary.  What can a seller or listing agent do about it? Can the seller cancel the contract and boot the bad guys out?

If there is a seller contingency, it may not be hard to do this at all. (For example: home sale subject to seller finding replacement property – they can just not look!) But that’s rare. Most of the time, only the home buyer has contingencies.

In Silicon Valley, we have 2 different contracts in use – the CAR and PRDS.  Before we can answer the question of how to get rid of nasty buyers or agents, it’s important to know and understand the contractual agreement clearly.  So the first question is “what does the contract say?“  Often the sellers don’t have an easy way to boot obnoxious agents out of contract.  But it may be possible to catch the buyers in a default (that is, not performing) via some subtlety in the contract and that may eventually enable the sellers to cancel the contract.

Both of the purchase agreements used in Santa Clara, San Mateo and nearby counties include a list of rights and responsibilities for both sellers and buyers.  They also include time frames: buyers and sellers must do these certain things within a specified number of days (some are boilerplate and others are written in and variable). So these contractual “technicalities” may be time frames which have been ignored inadvertently.

It’s no slam dunk most of the time, though, to get rid of buyers and their real estate representatives.  Usually it will be necessary to put the other side on notice that they are out of contract and to give them a chance to get back on track.  This official notice that they are at risk of having the sale cancelled is called a “notice to perform“.

At what point can you give a “notice to perform”?  There’s a little debate about this, so before electing to send over that kind of missive it might be good to have your agent check in with his or her manager or broker.  Some agents and sellers, if feeling harassed, may issue one before a deadline is even missed by the other side.  Normally this is taken as hostile – it is – and can seriously worsen the relationship between buyers and sellers without having any practical or helpful impact on the problems. In other words, it’s a bit like waving the red cape.

It’s not fair, having to deal with rude, nasty people who say untrue things, who bully others and seem to be just emotionally playing with the folks on the other side of the transaction.  I know.  Sometimes there’s not much you can do about it in the immediate sense.  But nastiness finds its own punishment, eventually – even if you never see it.

Rude, nasty agents (and agents who encourage or allow their buyers to be that way) risk every future transaction in the area since their colleagues will talk about them – a lot!  There are a few Realtor bullies in the Saratoga and Los Gatos market areas, but who they are is no secret to other real estate professionals in the area.  Agent reputation is so important! When there are multiple offers, the loathed agent and his or her clients will be at a huge disadvantage. So too with some homes that don’t sell – it can be that the agent community is literally boycotting a jerk. In the long run, it doesn’t pay to be obnoxious.  Call it karma, but other agents remember the guy who took advantage of a typo for personal gain, who showed the love of bullying at every turn or who controls to the point of choking out everything and everyone.  So too on the other end of the spectrum – a well liked agent who “plays fair”, communicates and performs without drama or game playing will find doors open that might otherwise be closed.

This is also true of everyone else we deal with too – title companies, inspectors, repair people.  A bad turn will be told to the entire agent community, but so will a good turn or going the extra mile. Reputation eventually is its own reward or punishment.

Got a nasty situation on your hands? One of the best things you can do is to keep a calm head. As a seller, you can say no to unreasonable demands.  If the buyers shoot you an addendum, even if it is reasonable but you want them to back out of the sale, you can say no. You are not obligated to do more than make the home available for inspections, provide your disclosures in a timely manner, keep the house and property up and any other contractual requirements.

Sometimes the listing agent is so frustrated at the inability to protect sellers from rude buyers’ agents or buyers that he or she gets emotional too. This doesn’t help.  If you’re angry or upset, don’t leave a voice mail or shoot over a snarky email.  Let yourself calm down first.  If the other agent is doing it to get a reaction out of you, don’t give him or her the pleasure.  Let calm heads prevail.

Sometimes a  friend will call or email me and say that he or she is buying or selling a house, has a Realtor but wants my advice about the real estate purchase contract nuances, analyzing comps, or any other real estate related question. Usually it’s someone out of my Silicon Valley market area, though a few times it’s been someone closer to home.

Most professionals don’t want to be asked to give professional advice when they aren’t going to be compensated – this is true for lawyers, doctors, and many others.  But it’s also true for real estate professionals, too.  The problem, though, is not really that some folks overstep the bounds of asking for a favor. Instead, it is a matter of ethics.

I cannot interfere or meddle if you or they have a Realtor.  This is part of our Realtor Code of Ethics:

Code of Ethics
The Code establishes time-honored and baseline principles that come from the collective experiences of REALTORS® since the Code of Ethics was first established in 1913. Those principles can be loosely defined as:

• Loyalty to clients;
• Fiduciary (legal) duty to clients;
• Cooperation with competitors;
• Truthfulness in statements and advertising; and non-interference in exclusive relationships that other REALTORS® have with their clients.

Non Realtor real estate licensees also have boundaries on what they can and cannot do, too.  One big area is that we are not supposed to advice outside of our areas of competency.  I feel pretty good about a lot of areas ranging from Santa Cruz to the south to Redwood Shores to the north and Fremont, Pleasanton or Livermore on the east bay plus all of Santa Clara County.  But I don’t know Sacramento real estate, Santa Barbara Real Estate or San Diego real estate, so it would be wrong for me to suddenly delve into those arenas.  Even more so if that friend or relative asking “for a favor” were working with a Realtor or other real estate licensee and my commenting would constitute interference.