Cupertino Real Estate Market Trends and Statistics

Cupertino real estate market will be more expensive for view homes in nearly all cases -image taken from Ridge VineyardsHow’s the Cupertino real estate market? The Spring market is underway and the market is hot. The best homes are getting multiple offers and high overbids. Prices are up from last year, though down from last month. Some of this may be seasonality.

Our inventory has been extremely constricted, so it looks like these market conditions will persist for the near future, at the very least.

Cupertino Real Estate market – Closed Sales and Trends at a Glance

Here are the most recent real estate statistics, via our Cupertino Real Estate Report. The market is HOT! It has cooled just slightly from the month before, but not enough to bring any relief to weary home buyers.

(If you’re viewing the chart below on a mobile device, please swipe horizontally to see all columns.)

 

Trends At a GlanceMay 2024Previous MonthYear-over-Year
Median Price$3,410,000 (-1.2%)$3,450,000$2,802,000 (+21.7%)
Average Price$3,278,860 (-7.1%)$3,529,810$2,747,450 (+19.3%)
No. of Sales22 (-33.3%)3322 (0.0%)
Pending24 (+60.0%)1517 (+41.2%)
Active17 (0.0%)1717 (0.0%)
Sale vs. List Price109.4% (-1.2%)110.8%104.0% (+5.2%)
Days on Market11 (+7.0%)1020 (-44.9%)
Days of Inventory23 (+55.2%)1523 (0.0%)

 

Prices are up annually, but off monthly. The market remains hot, though, as several data points underscore.

Next, the Cupertino real estate market via the Altos Research weekly charts (they use LIST prices, not sale prices):

 

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Real estate contract decisions

Real Estate Contract Decisions - two women drafting an offerThe real estate contract decisions faced by home buyers include the price and terms – and terms are basically “everything else” beyond the price.

Real estate contract decisions – price and terms

Assuming that you are pre-approved for a mortgage and that you are are working with a great Realtor or real estate licensee (those should be your starting point), you’ll have a number of things to address and choices to make involving price and terms.  The next is to find out if there will be multiple offers or not – your agent should call the listing agent to inquire.  That is a game changer so should be done upfront. Here are a few of the basic considerations.

1. FORMS Most listing agents prefer the CAR contract, but some may request that offers be written on PRDS forms. Will you draft your offer on the CAR or PRDS contract?

This is perhaps the first “term” to be considered.  In general, this decision is influenced by geography: the “west valley” communities from Almaden or Los Gatos on the southern end up to Redwood Shores or a bit further north will tend to use the PRDS contract.  Most of San Jose, Santa Clara, Milpitas and so on will usually prefer the CAR contract.

If you have written a couple of offers on one of them and then shift to the other, this can be unsettling. Talk with your agent about this decision.

2. TIME / DEADLINES Some of the most important terms among your real estate contract decisions are the timeframes. Other terms matter, such as having a pre-approval letter and providing all the required documentation, such as the proof of funds.  Contingencies are also hugely important terms. Today most sellers want to see no contingencies. That doesn’t always happen, though.
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Why do you keep losing out on multiple offers?

A crowd running to an open house - many of these losing out on multiple offers

Multiple Offers

Are you losing out on multiple offers? If it’s happened repeatedly, you may be hoping for a lucky break. But luck usually has nothing to do with success.

The real estate market in Silicon Valley is a hot seller’s market, and that means that often there are multiple offers, overbids, and sales with no contingencies. This is often the case with homes that sell in 2 weeks or less. Some buyers may get it on the first attempt, but many are bidding over and over – why do they keep losing out on multiple offers?

Over the course of my career, I have noticed that often there is a consistent “spread” of offers.  Most of the time, there’s a pack or band of offers at about the same level, sometimes 10% or more over list price, then a couple higher that that, and maybe one or two (once in awhile 3) at the top of the heap in terms of both price and terms which are attractive to the seller.

(There’s a video with my commentary on this below.)

Not everyone is losing out on multiple offers: what are the winners doing?

  1. The top offer frequently has the highest price and best terms. They aren’t losing out on multiple offers because no one else was willing or able to write such a high, strong contract.
    • It is 10-20% over list price or more, 25-30% down at least, and has no contingencies for inspection, loan, and most of all, appraisal (the percentage over has to do with whether the home was priced spot on the value or strategically under). Please see the video below for more on these items.
    • The winning offer’s buyers and agent followed directions. Normally that means that they come with all disclosures signed, and the buyer’s agent has even done her or his Agent Visual Inspection Disclosure. They include the proof of funds (all needed) which prove that the buyer can absorb any appraisal shortfall and is prepared to do so.  Sometimes the listing agent asks for a particular contract to be used or a particular summary sheet to be filled out. The best agents do all of that. The 2nd tier offers often are incomplete – the listing agents may or may not circle back and ask about missing items, so it’s important to remember that you only get one chance to make a first impression.
  2. The best offer is also someone who’s been SURE that he or she or they wanted the home from the very beginning and looks ROCK SOLID. NO WAVERING, not a “last minute” offer. Any hesitation on your side will cause the seller to not feel good about your odds of closing the sale. Be consistently interested if you want the sale. A shaky looking buyer may not include their proof of funds. They don’t come across as certain about buying this property and need a few days to see the property again, or show it to their parents, or otherwise confirm the decision to buy. Their agent is not so thorough. If the TDS is not fully signed off, is the buyers’ agent trying to sneak a 3 day right of cancellation into the contract? The best buyer’s offer doesn’t look shaky – it looks dead set on buying the home and has done everything possible to convince the seller of their conviction and competence.
  3. The second best or next runner up is usually strong on terms (at least 25% down, few or no contingencies) but perhaps made an offer price a little under the top value.  Sometimes the next runner up has a good price and mostly good terms, but something is not quite as solid – they didn’t offer to put the deposit into the escrow account the next day, they didn’t check all the needed boxes in the offer, they have a contingency when all the competing bids have none..  If the offers are tied but one buyer has no contingencies and the other has any, that will be the tie-breaker.
  4. Middle of the pack is usually a combination of a price where the home should appraise, a solid down payment, and few or no contingencies. It may be a price that seems “reasonable”. Buyers may feel that it is “a fair offer” or a win-win. Often the fair offers aren’t good enough to take the prize in multiple offers. If you can project what most buyers think a home will be worth, maybe you might want to consider getting ahead of that pack and seeing where the pricing trajectory will take you. The folks in the middle of the pack are usually the ones, together at the bottom, who keep losing out on multiple offers. (They will say things like “we are cautious…)
  5. Bottom offers are under, at, or barely over list price, and include an appraisal contingency as well as others (one for loan or one for property condition). If there’s a rent back, they want their PITI covered.

If you  repeatedly find yourself losing out on multiple offers, try to see your own pattern in this spread.  Is there one thing, or perhaps are there two or more things, you’re just not ready to do?

 

 

What do multiple offers look like to the sellers when receiving an offer? Click to view our post on popehandy.com and take a look at a side by side offer comparison sample.

Why it is so hard

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Tips for selling your home in an El Niño year

House for sale on a rainy day - Selling your home in an El Nino yearSelling your home in an El Niño year? It’s not impossible, but you may want to do things a little differently!

Home buyers need to buy no matter what the weather is like, and the most serious ones are not put off but inclement weather. The trick is to maximize your sales price and minimize inconvenience and risk to everyone involved.  To that end, here are a few tips from my professional experience.  The rainy season will likely go through March or April, with the spring months being the peak selling season most years.

First, safety tips for selling your home in an El Niño year:

  1. Safety tips for selling your home in an El Niño year: if home buyers come in soaking wet, it’s good to have a non-slip mat (as opposed to a towel on slippery tile) for them to step onto with their wet shoes so they don’t fall and get hurt.  If there’s a back door that they might use to view the yard, have a non-slip mat there too.
    • Also, make sure that there are no obstructions in getting to the house, such as cars in the driveway (if it’s pouring, they want the shortest walk possible), garden hoses where someone may want or need to step over them, toys, or anything that could be a trip hazard or a bad surprise to the face, such as low hanging bushes or trees that reach over the walkway. When it’s raining, sometimes people walk with their heads down and aren’t paying as much attention to their surroundings.
  2. Related to the first point, if you would like them to remove shoes or put on shoe covers / booties, provide a place to sit so that they don’t get injured in the process of respecting your wishes.  Some home buyers will be wearing laced shoes or boots.  Others may be older or have balance problems.  Do not expect them to be able to stand on one foot while trying to get the covers on.  If you have a covered front porch, a bench there is fine – just have the shoe covers available there too.
  3. Please consider adding an umbrella stand, or a place for umbrellas, on the front porch or the entry hall so that your prospective home buyers are not obligated to carry a wet one through your home.

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When a parent, spouse or loved one dies – what do you need to know or do about the house?

Death and Real Estate - Dealing with a Property after A Loved One DiesWhen a parent, spouse or loved one dies and he or she owned a home, there’s a lot for the survivors to do in addition to the very real and painful process of mourning. I have been through this with my own parents (and their house in Saratoga), a great aunt in Willow Glen, and many clients in San Jose, Los Gatos, Palo Alto, and elsewhere in Silicon Valley.

Quick summary of what to do regarding the home first and soon when a loved one dies:

  1. Engage the help of of an attorney and tax professional within the first 30 days or so. Sometimes there are deadlines or goal dates that will help the beneficiaries, and if people take too long to connect with these professionals, some opportunities may close.
  2. Some attorneys are also tax professionals, but most likely these will be different people.
  3. A professional valuation of the home will be needed, usually done by a licensed appraiser, but sometimes a real estate professional can do a market analysis that is acceptable. The home does not have to be empty or cleaned out to have this done.
  4. If you need the names of good tax and legal professionals, feel free to reach out to your real estate agent (or to me, if you are local). Most of us have worked with trust situations and can provide names. Or ask friends and family who’ve recently gone through the same situation and were happy with the people that they hired.
  5. You will need several copies of the certified death certificate. Discuss how many with your tax and legal professional. If you sell or transfer the home, the title company will need it and it will be recorded with the county.

Death, dying, & real estate: where to begin when a loved one dies?

In terms of settling the estate, it is wise to first speak with an attorney and tax professional about the property to find out what is required and advisable.

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The Holidays: Should You Pull Your Home Off The Market?

Should you pull your Silicon Valley home off the market? A different way to do home Sales During the HolidaysAre  you thinking it’s time to pull your home off the market?

  • many sellers in late fall decide to withdraw unsold properties from the active real estate market
  • winter can be a good time to sell as the competition shrinks, and some homes look wonderful in their holiday finery
  • rather than pull your home off the market, you might consider keeping it on, but marketing it differently
  • we’ll suggest some strategies for holiday home marketing below

If you’ve been trying to sell your home in Silicon Valley but haven’t received an offer yet, don’t despair!  With our mild winters, you really can sell real estate any time of year, especially now, when inventory is so low.

When most sellers exit the market after Halloween, we typically see a higher absorption rate as serious buyers will be buying from the available inventory. That means your odds of success are higher!

Should you pull your home off the market? We think not, but don’t keep trying to sell it the same way!
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Why do sellers care if the offer has a loan or is all cash?

Image of $20 and $10 bills with the words "Why do sellers care if it's a loan or all cash?"Why are all cash offers such a big deal?

Buyers who are getting slammed out of the Silicon Valley real estate market due to low inventory and multiple offers are extremely frustrated. Part of the problem may be the amount of cash in their offer. It can be hard to compete with bids with smaller loan amounts or which are “all cash, no loans”.

The question arises all the time: why isn’t my 20% down offer just as good as the 50% down or the all cash offer? Isn’t 20% down good enough? Or for that matter, why wouldn’t a lower interest rate FHA backed loan be suitable?

All cash is better because there’s less risk

Twenty percent down is “good enough” if there are no other offers. If it’s multiple offers, though, it’s probably not sufficient for most sellers provided that the all cash offers are written with realistic pricing. Right now, about 15% of home sales in Santa Clara County are all cash, and sellers would far rather deal with an offer that includes no finance or appraisal contingencies.  For sellers, the fewer contingencies the better and no contingencies is ideal.  Particularly now, when we are seeing a very sudden and dramatic upswing in pricing, appraisal contingencies can kill an offer’s chances of success due to the fear of a low appraisal. With all cash, there is no appraisal at all – it’s a slam dunk on that front. (more…)

What Is the Difference Between CID Ownership in a Condo, Townhouse or PUD?

Could this be a condo? Or a PUD? Or neither?Are you considering purchasing a PUD, or wonder how it’s different than a condo? They could look the same!

There’s quite a bit of confusion around the difference between common interest developments (CID) , condominiums, and planned unit developments (PUD). What do these labels mean, and how does anyone know which one is which? Where do townhomes fall in this list? And more importantly, why do they matter?

CID, PUD, and Condo: Ownerships Explained

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

  1. What is a condominium or condo?  A condominium is a type of ownership of the real estate, not an architectural style.  Condo ownership means that the purchaser has 100% rights to the unit and a percentage of ownership in the common lands (fractional ownership in common areas). Buyers of a condo are buying the space between the walls (and a fraction of ownership elsewhere).
    • Condos can architecturally be a unit that resembles an apartment (what we colloquially refer to as a condo), a townhouse, or even a house.
  2. What is a townhouse (or townhome)?  A townhouse is a type of building or architectural style, not the type of ownership involved. A townhouse could be a planned unit development (PUD) or it could be a condominium.
    • Townhouses are often 2 stories and attached on at least one side, but they don’t have to be. They could be one story and they could be detached.
    • A townhouse that’s a condo can look exactly the same as a townhouse that’s a PUD.
  3. What is a PUD?  A planned unit development is architecturally either a townhouse or a house in which 100% of the unit plus the land under it is owned and the ownership of the unit also provides for a membership in the homeowner’s association or HOA.  The HOA in turn owns all the common elements (such as private roads and amenities such as a pool, tennis court, parking lots, etc.). With a PUD, homeowners have an easement and rights to use the common area through their HOA membership.
  4. What is a CID?  A common interest development, or CID, is a general term meaning the ownership of property in which there are “common areas” such as private roads, a pool, parking, tennis courts, utility rooms etc. These could be condo complexes or home owners associations with houses, townhouses, or other types of homes.

Local examples: In Los Gatos we have some freestanding houses (or properties with the only common wall being at the garage) which are in condo ownership on Ohlone Court.  Same with the beautiful Villas of Almaden community. Both have “common areas” and mandatory membership in the home owner’s association.

 

 

How can you tell if the townhouse is in a PUD or Condo CID?

Sometimes the info is right in a property profile, which is very easy for most real estate agents to obtain through their preferred title company.  More often, though, to be certain of the ownership type it’s necessary to review the preliminary title report.

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Preparing to buy your first home in Silicon Valley

Preparing to buy your first home - couple looking at computer at their dining room tableIf you’re mulling around a home purchase, it’s a good idea to formulate a plan. Preparing to buy your first home will take some time, even before you see any homes. Just thinking about it can be a little overwhelming!

In this article we’ll share tips for folks interested in buying how to get started:

  • video discussion of the first three steps
    • online research (various areas of interest to you)
    • talk to folks you know who have recently purchased about their experience so that you can learn what to anticipate
    • talk with a Realtor (or a few of them) and learn how they work
  • a list of things to consider researching when considering home buying
  • a list of other resources at the end

Preparing to buy your first home: 3 steps

 

When preparing to buy your home, slow down, make a plan, do some research online, talk with recent home buyers, and then speak with a Realtor (or two or three).

Once you select a Realtor, he or she can help you to create a path forward. Often they’ll ask you about setting priorities (and as much as possible, for you to rank them), your budget, your tolerance for doing repairs, your desired timing, and a few other things.

The folks who get into the most trouble with a real estate purchase are those who do it spontaneously.

What kind of research should be done when preparing to buy a home?

There are many areas you’ll want to investigate:

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What is an exclusion in a real estate contract? What is an inclusion?

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. If you want to sell your home, it’s very important to understand the “law of fixtures” as it relates to what you leave and what you take with you – unless the inclusion or exclusion is specified in the contract.

In brief, built in or affixed items become real property and transfer with the sale (or as Realtors say, “conveys”). If something is built in, like a light fixture, but the seller and buyer agree in the contract that the seller can remove it, then it becomes an exclusion, as it is excluded or omitted from the sale.

If something not built in is allowed to remain behind, such as a garden hose, pool table, or curtains, then it’s an inclusion, as it’s included even though it is not real property.

Curtain rods are built in, so they are fixtures and therefore real property. But the curtains that hang on them are not built in, so they are personal property.

 

2 minute video explanation

What is a fixture?

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. The only exception is if something is bolted for earthquake safety.

Examples of fixtures (items which stay or are included):

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