This post on the coronavirus impact on real estate sales here in Silicon Valley is updated periodically, depending on unfolding events, so please check back often.
The market for houses is hot (still)
The coronavirus pandemic caused a worldwide surge of buyers rushing to purchase homes with more square footage, more rooms (home office, room for elderly parents to move in), and more outside space.
Locally, single family home prices rose about 20% over one year, despite the initial lockdown and restrictions on showings. Pools had not been so desirable pre-Covid, but now they are more sought after as buyers want to vacation at home.
Initially, it was challenging to sell a condo or townhouse, particularly if there was no patio, balcony, yard, etc. Those homes did start appreciating, but have not performed nearly as well as detached housing has.
Now, in September 2021, many of the requirements have been lifted. Buyers are still interested, but the steep appreciation has priced some buyers out of the market.
Quick overview of what is and isn’t allowed with real estate listings and sales
The landscape for home sales is complicated and more restricted than pre-pandemic times, but easier than it was in March – May 2020. The market is strange in many ways, but it is possible to buy and sell now and actually is not so hard at this point.
What’s changed with Covid: (more…)
What needs updating if you are buying an older house, townhome, or condo? Most of the homes for sale in Silicon Valley are more than 25 years old, and with our already very restricted inventory, that makes the odds of purchasing an older house, townhouse or condo fairly high if you’re in the market to buy real estate here.
- The older the property (think 100 years versus 60 or 70 years), the more likely it is that the home would benefit from expensive updates.
- Typical home buyers find that an 18 year old remodel is in need of updating
- See the list below of components that may need updating in an older home
If you are buying an historic home (more than 50 years of age is technically historic, but most consumers think of houses or units which are 100+ years old), the question of what needs updating will be significantly longer than if we are thinking of homes 25 to 60 or 70 years of age. The older the structure, the more you may need to consider safety improvements, or changes for better comfort or style.
Don’t despair – the older homes do tend to offer good locations, often there are beautifully established neighborhoods with large trees and bigger yards – which you may not see in newer developments.
How recent should that remodel be?
Something to note is that how often rooms or homes need to be refreshed is a matter of personal taste. If a kitchen is built well and done in a more timeless fashion, perhaps only the appliances or countertop or lighting may need a redo from time to time. But some home buyers will find that if a house was last remodeled 18 years ago, it’s time to do it again. If you’re selling, it’s important to appreciate that the 18 year old whole house remodel you had done may feel like yesterday to you, but it won’t to a large number of buyers.
Buyers, once you purchase a home, if you are like most home owners you won’t be doing a total remodel every 15 – 20 years. It’s too much expense, work, and inconvenience. My usual advice is to try to pick timeless elements that won’t go out of style (and put a more personal touch into things like paint or floor coverings, which are relatively inexpensive to change in many cases).
What needs updating in an “all original” home?
High Voltage Power Lines from around the West Valley.
“Location, Location, Location!” The most important element when buying or selling a home is the one thing you can’t change – it’s location. Because of that, you’ll need to know some location-specific things, naturally occurring and man-made. Like high voltage power lines.
What about this location?
If you own or are thinking of buying a home in Silicon Valley, here are a few location-specific things you want to know upfront so that you can make informed decisions:
- where are the earthquake fault lines?
- where are the geologic hazard zones, such as liquefaction areas?
- where are the flood plains?
- where are man-made things that will negatively or positively impact a home’s value? Things such as
- train lines
- electrical transmission
- school district boundaries
- zip code boundaries
- proximity to entertainment venues
When looking at maps, sometimes these items show up and sometimes they don’t. Realtors and other real estate professionals in the San Jose area often use a Barclay’s Locaide and various online resources to locate the natural hazard areas. There are other tools to help locate school districts and zoning restrictions.
Google maps can help uncover some other areas, like distance to shops and freeways, but sometimes it raises more questions than it answers. For instance, a years ago a Realtor who didn’t know the Belwood of Los Gatos area too well phoned me to ask what a large object showing up on satellite view in the hills of Belgatos Park was. It is just a covered reservoir, but since it was not identified on the map it concerned some buyers. Local knowledge is still extremely helpful.
Mapping the Grid: High Voltage Power Lines
Refrigerator floods are no laughing matter! Last month, my sister in-law’s fridge leaked causing the hardwood floors to pucker and swell, pushing cabinets and even lifting countertops! They’ve had to move out while their kitchen undergoes a massive overhaul. When my refrigerator line broke back in 2012, it was a similar story. The damage was extensive, and repairs were time consuming and expensive! So what can cause leaks and flooding and how can homeowners prevent it?
Causes for Refrigerator Floods and Leaks
Does your refrigerator have an automatic icemaker or a cold-water dispenser? If so, that plumbing is all capable of breaking. What if you don’t have a water line to your fridge? You can still have a leak. Humidity from the air and produce becomes ice or water when cooled. Modern refrigerators have been designed to automatically defrost: ice is melted, flows down a drain, and collects in a drip pan where it is heated (usually via waste heat from the refrigeration system) to evaporate the moisture. If the condensate is not taken care of properly it can become water damage!
Looking a little more closely, here are a few common causes:
Just about every year California amends what sellers are required to disclose, and one change that I think we’ll be seeing a lot of is about home fire hardening. Many agents, including myself, will begin to use the fire hardening disclosure / document (which has already changed once in six months). The current one, as of June 2021, is the C.A.R. Form FHDS, 5/21 Fire Hardening and Defensible Space Advisory, Disclosure, and Addendum.
So what is in this document, who will have to use it, and how can it help buyers and current home owners?
The CAR Fire Hardening and Defensible Space form is a two page document completed by the seller of a residential non-commercial property to notify the buyer of fire hazard zoning, code compliance, and possible vulnerabilities and/or defensible features. Both the buyer(s) and seller(s) sign to acknowledge receipt and consent to comply with the appropriate terms in paragraph 4B.
Who Will Use This Form? Paragraphs 1 and 2: Prerequisites
This disclosure is required for homes (1-4 unit residential properties) in high or very high fire hazard severity zones when the seller must complete a Transfer Disclosure Statement (TDS form). Sellers for California real estate transactions falling within those criteria are obligated to provide specific information contained in this form to the buyer. If these properties were improved or were built before January 1, 2010 there are additional stipulations. However, use is not restricted to properties in these zones.
Owners of residences where the zone is unknown, or those outside of the designated fire hazard zones which are “in, upon, or adjoining a mountainous area, forest-covered land, brush-covered land, grass-covered land, or land that is covered with flammable material,” (Gov’t Code 51182 and 1C in CAR FHDS 5/21 – basically, homes in or near ample kindling) should also make these disclosures if they might be considered materially important. Even when it’s not legally necessary, any homeowner might voluntarily disclose using sections of this form. To show that a home is not in a designated high or very high fire hazard severity zone, sellers simply check the box indicating so in paragraph 2B.
Is the address in a high or very high fire hazard severity zone?
Not all homeowners know if their property is in one of these zones, but it’s the seller’s responsibility to find out! In paragraph 1B the form suggests that a natural hazard zone disclosure company could determine this information (and if you’re selling you may have already ordered a report that would contain those details), but it certainly isn’t the only resource.
Did you do the repairs outlined when you bought your home?
Recently I showed a home where the owners had been there 7 or 8 years but never did any of the suggested repairs from their pre-sale inspections when they purchased the home “As Is“. The As Is part means that no repairs were provided by the sellers, with the idea that buyers would do whatever was needed later. Desperate to get in when prices were appreciating fast, it seemed that most home buyers said “we’ll take care of it after we own it“.
But many of them forgot.
Today, with the whitest hot market I’ve ever seen in my career, most sellers fix the major items because they understand that it will net them a higher sale price. They fix the foundation, electrical, plumbing, waste lines, roof leaks, pest items, safety issues, and do whatever other repairs would make a buyer pause.
Some, though, don’t do any repairs at all – none! Often they are the same sellers who won’t stage their homes, or for whom scheduling a showing is a big effort, and maybe the disclosures aren’t so thoughtfully done. (In recent weeks I saw a disclosure package in which the sellers wrote on every page, “AS IS SALE” and refused to answer each question.) It’s a giant red flag that these may be difficult sellers.
If you want to maximize your profits, don’t let that seller be you. As Is certainly is the norm, but it’s As Disclosed. Wouldn’t buyers pay more if they weren’t worried about needing to do a lot of expensive and time consuming repairs? You bet. Confident buyers pay more. Let that be your mantra, home sellers.
Pull out your old file, find your inspection reports and review them, especially if you are preparing to sell your home
Tanbark wood mulch separated by a dry creek bed, cement path, & brick retaining wall in a low-water San Jose yard.
May Day is a celebration of spring, but “April showers” were few and far between and it’s already starting to feel like summer! With another record-breaking hot year and the Bay Area in severe to extreme drought conditions homeowners concerned about water use and fire prevention are turning to gardening and landscaping for the solution. But a word of warning! Since updating my surprisingly popular post on mulch vs tanbark and the risk of termite infestation, I came across another reason to be cautious when applying it to your perimeter: fire.
Organic Mulches and Fire Hazard
Mulch can work wonders in a garden – it helps soil retain moisture, protects roots, reduces weeds, insulates the ground, can add nutrients and enrich the earth, adds visual appeal, and it’s affordable. It’s on every guide for landscaping water conservation (including Valley Water’s recommendations and San Jose Water’s tips)! Do a search and you’ll find it comes in a broad variety of materials. These can be divided into two groups: organic and inorganic. And organic matter can burn.
The University of Nevada Cooperative Extension has published their (easy to read) findings from a study comparing the combustibility of various organic landscape mulches. I recommend reading the booklet, but here are some of the key points I found most interesting: (more…)
Twelve Silicon Valley Doors, shown as black & white (photos by Mary Pope-Handy)
Thinking of selling your Silicon Valley home? When your house or condo is for sale, curb appeal is crucial because if buyers don’t like what they see on the outside, they will not bother to see what’s on the inside!
It’s hackneyed but true: “You never get a second chance to make a first impression“.
This is no where more true than with front doors! Staging begins on the front porch.
In my real estate practice, I usually see at least 10 or 15 San Jose, Los Gatos or Saratoga area homes per week – usually many more than that too. A good, clean front door with nice paint or varnish, no dust, clear glass and sparkling hardware gives a good welcome to your home’s visitors, whether they are coming as prospective buyers or simply as guests. Amazingly, though, not every home seller gets this basic principle quite right. Very often, front doors are dusty, dirty, in need of paint or perhaps even in need of replacement.
And we’re just scratching the surface!
A home’s front door sends a message. What message does yours give off? Photos by Mary Pope-Handy
Here (to the right) are some doors I’ve encountered in my work as a Silicon Valley Realtor. What do you think of each of these?
Some homes have a “security screen door” in front of the regular front door, which is mostly obscured. What message does this kind of strong grill give? If it’s the only one on the street, it might imply that one person nearby has concerns about safety. But if there are several doors like this on the same street or nearby, it can give buyers concerns about the safety of the area.
The black door with the white trim in the center is a typical or average San Jose or Santa Clara County door. It has a painted exterior and a fan light window on top, which allows some light into the home. It’s a little more inviting than something without any windows, but there’s no cover for rain or an inviting front porch, either. This type of door is not super expensive, but it does come across as at least fine, if not “good”.
Some of these doors are not the front door. I once viewed a listing which had access through a scratched up door facing the backyard, and when I shared the photo several people asked if it was a short sale or bank owned property. To everyone’s amazement, no, it’s a “regular sale!” This kind of introduction to the property, is anything but regular and left far from a good first impression! It is a discredit to the agent and the seller to put a home on the market with such a terrible first exposure to a property.
Most of Silicon Valley has pre-1978 homes, and most of them contain some amount of asbestos, commonly on the HVAC ducts and, more visibly, in some popcorn or acoustic ceilings. It can also be in less known areas, such as vinyl flooring or perhaps the glue under the flooring. Homes built after 1978 are far less likely to be effected. Asbestos can be found in almost any product, especially in older parts of the home where fire retardancy would be beneficial.
Very few people test their for asbestos in homes. Seeing that a seller has “no reports” on items like asbestos or lead on their home is not uncommon, but it does not mean it is not there, particularly in older properties.
Undisturbed asbestos is not supposed to pose a health risk. I know for a fact that my 1977 built home has asbestos on the boots, where the ducts come up to the heat register. Since it is on the external part of the ducting, not the inside, the air in our house should be clean and free from asbestos.
What is it?
Like mold, asbestos is a naturally occurring substance found in some soils, and sometimes mined. (Click on the image below to see a map of sites in California in which there is or is suspected to have asbestos present.) In the San Jose area, it’s known that asbestos was found or mined at the New Almaden Mine and also in the area near Communications Hill where KB Homes built a large subdivision.
Asbestos is the common name for a group of silicate minerals made of thin, strong fibers, best known for their use as excellent fire retardants. Not many realize that it occurs naturally in certain areas, including California. The most common naturally occurring Asbestos is Chrysotile, often found in serpentine, common to the Sierra foothills and the Coast Ranges.
What does that mean? Since Asbestos are minerals, that means they are generally stable and will not evaporate. However, the mineral can be crushed into a fine dust which will float in air – this is referred to as friable asbestos. Friable asbestos, suspended in air and breathed by humans is a carcinogen linked to the development of lung cancer.
What are the risks of asbestos in homes?
Some Silicon Valley homeowners spruce up their yards and gardens in spring and summer with tanbark or mulch. While this is a very common practice, and often encouraged as a drought-friendly gardening option, it can be a bad idea if it is too close to the structure, especially the home’s foundation. Tanbark is simply small bits of wood, and most common mulch is often no more than shredded wood. Why is that bad? Wood is food for termites and piles of tanbark or mulch can invite and hide them as well!
Tanbark or Mulch?
Mulch is the more widely used term and it can cover a broad scope of materials, but the most common type you will find in stores (and in Bay Area gardens) is the woodchip mulch. If you ask for mulch at a hardware store, this is most likely what they will show you. In the local vernacular, we often refer to mulch as the fine, thin, or decomposed stuff – we have a different name for the larger bark and wood chips.
I learned only recently that tanbark is something of a local term that people from other parts of the state or country may not be familiar with. Here in the Bay Area we call the stuff you commonly see underfoot at playgrounds or piled thick on the planted berms around a shopping mall parking lot by the name of tanbark. Some people may reserve the name for the large chunky bark chips while others will call just about any wood chip substrate by that name. So tanbark is, in fact, a mulch.
Homeowners and sellers wanting their home to make a good first impression are often tempted to apply mulch or tanbark in otherwise bare patches around their yard, but you can wind up with far bigger (and more costly) problems if it’s too close to the foundation!
What Was That About Termites?