Here's your opportunity to ask me anything at all, and I'll provide you the best answer I can. I look forward to our online conversation! Just click on my email address above to send me an email. I'll respond immediately!
SPRING INTO SUMMER
If you havent seen my newest listing at 1648 Walnut St, San Carlos, yet, take a look at this stunning Spanish-style home! Here's the v-tour, http://www.obeo.com/1141687, and if you want to see it in person, I'll be there this Sunday, 5/28, so come say hello!
Happy Memorial Day! Enjoy this season of celebration and accomplishment, as well as a return to warmer weather, longer days, and hopefully, a bit more relaxed pace as we head into summer. But don’t chill when it comes to buying or selling a home! The market is going full force, still with record low (I’ve been saying this for so long but it continues!) inventory and high, high demand. Sale prices continue at the height, again triggered by lack of homes for sale and continued low interest rates. So if you’re planning to make a move, now is a great time! Here is what some respected economists have to say, per Keeping Matters Current Crew on their blog:
“Positive demographic factors should continue to reshape the housing market, as rising employment and incomes appear to be positively influencing millennial homeownership rates.”
“Even as more homes come on the market for this traditionally popular sales season, they're flying off fast, with bidding wars par for the course. Home prices have now surpassed their last peak, and at the entry level, where demand is highest, sellers are firmly in the driver's seat.”
"I am guessing we will see it get even better… If you are considering moving, it could be a really good time to sell."
"The early returns so far this spring buying season look very promising as a rising number of households dipped their toes into the market and were successfully able to close on a home last month. Although finding available properties to buy continues to be a strenuous task for many buyers, there was enough of a monthly increase in listings…for sales to muster a strong gain. Sales will go up as long as inventory does."
“Despite higher mortgage rates, the potential for home sales increased on an annual basis driven by steady income and job growth, along with a surge in building permits. While it may be a little late for this spring, the increase in building permits is a welcome sign that some relief may be in sight for the inventory shortages that are holding back many markets from realizing their full potential this spring.”
ANNOUNCING AN EXCITING NEW LISTING!
(3d virtual tour: https://my.matterport.com/show/?m=CFkDZNDKM3u)
Every once in a very rare while a home comes for sale that deserves special notice, and I am very proud to present such a home as my newest listing! I invite everyone to come see 236 Alberta Avenue, San Carlos, during one of several viewing opportunities over the next many days. Please come say hello, and come see this wonderful home!
Why so special? It's not that there aren't many, many great homes in San Carlos, but few have as much going on as this home does: it's nearly 3600 square feet, on an 8800 square foot lot, on one of the prime streets of San Carlos's most desirable White Oaks neighborhood.
Completely rebuilt and remodeled in 2000, this home offers four bedrooms, four bathrooms, plus a tricked-out office and a music/craft/reading/whatever-your-need-may-be room, along with the living and dining rooms, open kitchen and family room, mud/laundry room, and a detached two-car garage, making it ideal for most everyone and most any lifestyle.
I think you'll find it hard not to fall in love this fabulous home the moment you step up to the welcoming front porch and formal entry. The cozy living room adjoins the formal dining room, perfect for intimate dinners or party-size gatherings. French doors lead you into the deluxe kitchen -- with so much storage, pantry, and counter space as well as brand new Bosch appliances -- informal dining area and comfy family room, with its built-in entertainment center. A wall of windows and doors lures you out to the generous rear yard, with its beautiful patio and lush foliage. A private guest suite, the mud/laundry room, as well as the flex room, additional bath, and awesome office complete the downstairs of this lovely home
The central staircase takes you up to two generous bedrooms and bath, and a luxurious master suite with its spa-like bathroom, sitting room alcove, private deck, and multiple closets.
This charm-filled home exudes all the modern amenities you desire, along with timeless comfort and style. And now it's ready for lucky new owners to continue the legacy of warmth, love, and joy.
The list price of this wonderful home is $2,848,000. I look forward to its reception in the San Carlos real estate market, and I look forward to the sellers being able to pass their home along to the very lucky new owners.
Looking forward to seeing you!
Welcome to 2017! Now that we’ve gotten our feet wet (no pun intended on this Stormy day) let’s do a quick recap of the year just ended and the year to come.
Suffice it to say that 2016 is one for the record books, with some astounding numbers. What fueled the housing market? Record low inventory, record low interest rates, record high sale prices, and record high demand. For example:
Take San Carlos, one of the hot, hot markets for so many reasons (nice community, great schools, great location, forward-minded development, more affordable than neighboring towns of Palo Alto, Menlo Park, and more), where the highest sale price for a single family home was 806 Alameda, which sold for $9.8 million. Granted, the value of this sale is the nearly six acres that accompany the home, and the buyer is a developer who will be working on a new neighborhood of what I expect to be high-end single family homes. But nonetheless, it is one for the books. It is followed by the sale at 138 Queens Ct, a 4200 sf home that sold for $3.95 million. And guess what, that wasn’t the only San Carlos home that sold for more than $3 million. A total of 14 homes sold for more than $3 million last year; another nine sold for over $2.5 million. San Carlos is no longer a sleepy little town when it comes to real estate.
With multiple offers abounding last year, the highest overbid was for the home at 696 Cordilleras, listing at $2.050 million and selling more than $2.637 million, followed by the home at 1017 Walnut, which listed at $2.498 million and sold for $3 million, as well as 620 Terrace, listing at just under $1.9 million and selling for 2.4 million.
And price per square foot? How about 2079 Alma, a 1,500 sf home on a 9,000 sf lot that sold for $2.1 million, or $1,400/sf. And then there’s 2211 Howard, a 1,332 sf 3/2 home which sold for $1.8 million, or $1,351/sf, or 1324 Cordilleras, an original 1,170 sf original 2/1, that sold for $1.551 million, or $1,326/sf.
If we move one town over to Redwood CIty, we see a slightly different picture, with many homes selling for list or even under, as well as many selling for over list. Were sellers’ expectations set too high? Or is this a predictor of a changing market?
Not to say RWC is a bargain in any sense of the word, with the highest priced home, 1090 Lakeview Way, a new, 5350 sf home on the lake, selling for $5.575 million. In RWC, a total of 10 homes sold for $3 million or more, and an additional 18 homes sold for $2.5 million or more.
Overbids may not have held up to the numbers in San Carlos, but many homes sold for 100k, 200k, 300k over list, if not more, which still requires significant mind shifts on the part of buyers. Consider 455 Upland Rd, listing at $2.640 million and selling for $2.950 million. Or 21 Woodhill Drive, listing at $2.598 million and selling for $2.940 million. Or 839 Chesterton, listing at $1.799 million and selling at $2.105 million. I think you get the general idea.
And p/sf in RWC? Well, 25 Summit Dr, an 810 sf 2/1 on a 6,890 sf lot sold for $1.2 million, or $1,481/sf. Or 518 Hillcrest, selling at $1.150 million, or $1,386/sf. Or 1651 Virginia, selling at $1.160 million, translating to $1,365/sf. Amazing numbers, especially when the homes are small with no or only some updating.
You can go up and down the Peninsula and get variations on the same theme for Real Estate 2016.
So what’s in store for the year to come? Change. Rising interest rates, which cut into buyers’ purchasing power. Increase in inventory? I don’t expect anything dramatically different. Supply and demand may begin to level a bit, and of course, consumer confidence will always play a large role. With the changes coming in our government and all the side effects that may result, we’re probably a little more unclear than we have been for the past many years. Having said that, having your own home is ALWAYS the best option if at all possible. If you’re ready to make a change of your own, please oontact me. We’ll navigate it all to your best possible advantage.
May 2017 bring you lots of good things, good health, love, and peace.
So. Much. Happening!
~ Don’t forget to turn your clocks back an hour this weekend. You know that winter’s coming when it starts getting dark at 5 pm or even earlier ... can we switch back to Daylight Savings Time yet?!
~ With continued low, low housing inventory, I am thrilled to be holding my newest listing open this weekend! First open homes are always the best! The address: 166 Oakview Drive, San Carlos. Please come on by to say hello and see this awesome home!
~ This week marks a critical week with Tuesday’s presidential election (just in case you hadn’t heard :/ ) And while I have never gone political here or on my facebook page out of respect for you and for what my communications are -- and aren’t -- I do think that this election is about much more than voting for a president. I do think that this election has the potential to have a huge impact on our communities and our lifestyles that we all work so hard to achieve and maintain every day, and so with that in mind, I do think it’s relevant to bring up the incredible importance of having your voice heard by voting on November 8. Why? Because ultimately Real Estate is about community, and about the lifestyles we choose in part by where and how we choose to live. Our homes have always been our havens, our savings (lucky us on the Peninsula!), our safe place in which we can raise our families, share our values, our religions, and our cultures. Our homes are where we can set our examples, and where we can provide education and safe streets and healthy environments and yes, a feeling of positivity and hope. And I do believe that we are truly at a crossroads in the choice we as a national community make in our next president, based on the fact that the two leading candidates are so diametrically opposed in their outlooks, their priorities, their sensitivities, and their sensibilities. As it has been said, our children are watching, the world is watching (!). And while we may not think it at times, each of our votes count and we all have the right, the privilege, and the obligation to be heard. After all, so many of our parents and grandparents gave up everything to come to this country, and so many of our fellow Americans have sacrificed everything, including their lives, so that we can exercise our right to vote, and so that we are free to be who we want, where we want, with whom we want, and how we want. So please, vote this Tuesday. And respect that while we may not all agree on candidates and issues, I think we can all appreciate that our ability to vote is a treasure to be protected and upheld always. So vote, and I hope that we can all wake up on November 9, take a deep breath, and then move our great country to new heights, and do so in a way that we become stronger together, with justice and liberty for all.
A SUMMER TO REMEMBER!
Happy Memorial Day! May we always honor those who sacrifice their health, well-being, and lives in the line of their commitment and duty, whether or not we agree with the reasons behind all they’re called upon to do. And may we continue to hope that in the not-to-distant future, we can achieve worldwide peace so that these kinds of sacrifices are no longer necessary.
Memorial Day weekend marks so many things: the end of the school year, graduations, celebrations, beginning of summer ... it’s truly one of my favorite times of year! It also marks the time of year when our housing inventory has been known to begin it’s slow build up over summer, as people get distracted with vacations and other activities, and ease up on their home searches. But due to our continued low inventory, we can’t always rely on a ‘typical’ real estate cycle. In spite of some perception that the market is tweaking a bit, we still have an environment where homes are selling with multiple offers and for record-setting prices. Homes that are lagging a bit tend to be those that have some kind of unfixable flaw, or that are too aggressively priced. Buyers know that more likely than not they’ll have to pay more than the list price of a home, so if the home is already priced at where it would end up with multiple offers, buyers may shy away, thinking they may need to pay that already high price and then some. There are many different pricing strategies, and it’s important to understand them to maximize your success in selling or buying a home.
Sellers, don’t forget that pricing and presentation, as always, are of paramount importance. Just because it’s a sellers’ market doesn’t mean any condition, or any list price, will do. A very careful analysis of your home, other comparable homes that have sold and that have not sold, market influences that day and week, and more, need to be taken into account. Your neighbor may have heard of someone who sold their home for $500k over their list price, but that doesn’t mean everyone should have the same expectation. To get the most for your home, you need to present it at it’s best. Understand what it is that you’re offering, and accentuate that appeal. And remember that pricing is merely a number, it may or may not have anything to do with the true value of your home.
Buyers, don’t stop now! It’s been a hectic spring, with few nice homes and lots of activity, and you may be getting to the point where you’re ready to call it a day. But summer can be a great time to find that wonderful opportunity: a home that for some reason isn’t getting the attention it might have a month or two ago. Someone else’s loss can definitely be your gain. And with interest rates still at historical lows, your purchasing power is at an all-time high. So rest up, and keep on looking. Your home is out there, waiting for you!
Sellers and Buyers, let me help you navigate our market! I’m ready to get to work for you, I just need to know that you’re ready too.
So give me a call, and let’s make it a summer to remember!
Who Should Sell Your Home?
Ronald R. Rossi, a very highly regarded attorney specializing in real estate, recently wrote a column on which professionals are best to hire for the sale of a home. He was responding to someone who was leaning towards selling a home on his own, and hiring an attorney to handle the paperwork. Here is Mr Rossi’s response:
It is relatively easy to hire a real estate attorney to draft the paperwork involved in the sale of your house ... Any knowledgeable real estate attorney can fill out contract forms for your property and should be generally familiar with all the standard forms for residential real estate in use in today's market.
However, the big question is, should you hire an attorney or an agent or both?
Let me put myself in your place and imagine that I'm a member of the public with no real estate knowledge. I want to sell my house in today's market, generating the highest possible net return to me - that is, after paying all closing costs and commissions - and avoid any future problems, including claims, mediations, arbitrations and lawsuits. I have a choice of hiring an honest, knowledgeable, diligent real estate attorney or an honest, knowledgeable, diligent real estate agent. Which would I choose?
I've said it before, and I'll say it again. I would choose the real estate agent.
Why is that, you ask? Well, it's simple. A real estate lawyer knows more about the law than an agent does, even though many agents are very knowledgeable in that regard. But who can make intelligent decisions about how to market the property and get the highest return for your dollar? Who can place the property on the MLS and gain access to thousands of home buyers? Who will devote the time to show the property, hold open houses, create brochures, and work to sell that property?
Attorneys don't do any of these things; this isn't their area of expertise. One of the most important jobs you have is to choose a good, savvy listing agent.
You need an agent who's familiar with what's going on in the marketplace - price, value, terms. Good listing agents also have a list of reliable service providers who can perform pre-listing inspections.
If you're going to pay out $30,000, pay it to someone who's going to get the job done for you and maximize your return. The best real estate attorney in the world can't do as good a job for you as a skillful, experienced agent who's looking out for your best interests.
So if you're considering selling your home, please give me a call. We'll put my 23 years of experience to your best advantage, and we'll sell your home for the very most the market will bear. It's all about hard work, expertise, and results that exceed your expectations. Looking forward to hearing from you!
THE CASE FOR HOME OWNERSHIP
You may remember several months ago I mentioned some of my very favorite clients who had scraped together enough to buy their first home -- by no stretch their dream home -- then sold it just a couple years later to buy their ‘forever’ home thanks to the equity they had built and more. This is one of my all-time favorite examples of making home ownership work for you, and being at such a great advantage by doing so.
Here’s the other side of this story: a very lovely couple who periodically have talked to me about buying a home over the last several years. But they never have been able to fully commit, and have always fallen back into complacency in their rental home. Fast forward to today, when they are, for the second time in six months, frantically looking to move to a new home because their landlords have given them notice. And in spite of some lip service to buying, they most likely will end up in another rental, under someone else’s control, at someone else’s whim, and paying someone else’s mortgage instead of their own.
In fact, we calculated that during the time I’ve know them, they have paid more than a quarter million dollars in rent, which is money down the drain for them in so many ways. You see, they are paying a mortgage, just with no benefit to them. They are also missing out on the many tax advantages of home ownership, as well as the ability to shelter their income. And when we consider the hundreds of thousands of dollars they would have garnered in appreciation from the increasing value of a home, not to mention the up to half million dollars tax-free they could claim upon sale, it’s actually mind-boggling. Their landlords are giving them a huge thank you, as they’re kicking them out the door.
I completely get it: homes in our area are expensive. But for those who can qualify, I am completely convinced that there is no better investment that will bring you such value as home ownership. Stocks, commodities, bonds, put them all on the table and compare. And that’s before you even consider the stability and empowerment of owning your own home.
It makes me sad, and just a little mad, to see intelligent, sophisticated, worldly people who are so well qualified forgo something so obvious. My message is this: if at all possible, become a home owner. In our world where so much is out of our control, this is one thing that we can control, and will be of unparalleled benefit for all time.
So call me. Let’s put you in a position of having a roof of your own overhead, and so very much more.
Looking Back, Looking Forward
I’ve had a wonderful trip down Memory Lane recently, as I’ve been updating my website, including putting together a nearly complete list of all the homes I’ve helped my clients sell and buy over the last 22 years. It’s amazing how much I remember about each individual transaction: what my clients’ goals were, how long we’d been looking, what kind of work each home required, whether we had to compete with other offers for the purchase, or whether we had multiple offers to review for the sale, and so much more.
There was the time that I stayed up most of the night, waiting for my client to land in Hawaii (of course his flight was late) while keeping a very impatient listing agent at bay so we could get the counter offer signed and ratify on the home of his dreams. Or the time that my clients’ offer was chosen from among 17 others ... long before multiple offers were a thing. I remember feeling like we had just won the lottery. Or the time that I was negotiating on behalf of my clients, literally from the hospital bed where I was about to give birth. My husband still jokes about that one. And then there was the time that my clients were going separate ways, and by selling their home they were each able to begin their new phase with much more than they had started with. And of course my clients who sold their tiny little home that they had scrapped together for here, and came away with enough to purchase their large, spacious ‘forever’ home elsewhere for them and their adorable babies. Or the time that I helped sell a trust property for far more than any of the surviving trustees ever thought possible, allowing each of them to benefit from an unexpected windfall.
I feel like I could write a book -- I think many Realtors could and should -- about the experiences, the joys, the frustrations, the disappointments, the best and the worst of human nature that we see every day as we help people with some of the largest, potentially life-changing financial and lifestyle decisions they make in their lifetimes. It’s my honor to be able to do so. It’s wonderful to see the same addresses multiple times, as my clients have come back to me for their next purchase and/or sale. And it’s a joy to be able to connect the dots, so to speak, between my clients who know each other, and who have referred me to each other. No matter the reason -- upsizing, downsizing, moving to a different town locally or into or out of the area, family changes, and more -- the fact that my clients want to work with me again and again means the world to me. This trust, this confidence, this loyalty is worth everything to me, and I’ve spent the last 22 years doing all I can to earn this regard from my ever-growing family of clients and friends, as so many I know begin as one, and become the other as well.
So as I reflect back over the years as we dive into 2016, the 23rd year of my real estate career, I want to say thank you. For trusting me, for bringing me into your most confidential private affairs, for giving me the opportunity to serve you, for allowing me to earn the title of your Realtor. I look forward to helping you again and again, to welcoming your friends and family into the fold. Nothing is more rewarding to me than being able to make that phone call saying “it’s yours”, or “it’s sold”. Thank you for the privilege of being able to do so.
Happy New Year!
As you are reading this on this first morning of 2016, I hope you will always be able to enjoy a roof over your head, a warm home, the love of family and friends.
So much to think back on in 2015! A monumental year in so many ways; especially when it comes to our local real estate market.
It's been a wild ride. And the year to come? Keep your seatbelts buckled, as I don't think it's ending any time soon.
Always call on me for all things real estate, and let's make 2016 a great one.
Happy New Year!
Ready for Rain?
It’s finally Fall! Hoping you’ve all remembered to turn your clocks back this morning ... being an early riser, I am so very ready for it not to be completely dark upon waking every day!
We’ve gotten through a hot, dry summer, during which we’ve tailored our water usage, many of us skimping on seasonal flowers and allowing our lawns to go from lush green to brown. It’s actually quite sad to tour our beautiful neighborhoods, and see yards that look neglected and unkempt. Rather, it’s all of us pulling together to do our part. And now we’re looking for some relief!
As the colors turn and the air becomes a bit crisp, it’s important to remember that the predictions are for a very rainy winter due to what’s being called the strongest El Nino in modern history. Here is a quick checklist to make sure you are ready!
~Clean and repair gutters, downspouts, and drains
~Have downspout extensions at the ready to divert runoff water away from foundations
~Check sump pumps to make sure they’re working properly, especially since they may not have had much use over the last few years
~Inspect the property for leaky windows, doors, and roofs
~Check slopes for signs of erosion
~Inspect retaining walls for signs of distress or failure
~Watch large trees during the first rains to make sure root systems are stable
~Drive cautiously! Remember that the first rains will clean the streets of oil and debris, potentially making for slick roads. Also, debris may clog street gutters, so be aware of standing water. Do not try to get through deep standing water; take the time to change your route for a safer one.
Enjoy the rain! Cozy up in your nice, warm, dry home to listen to the pitter patter of raindrops, and smell the freshness that rain brings to the air. We’ve been waiting for a long time, hopefully we’ll get our due! And of course, if your thoughts start wandering to a new home -- bigger, smaller, more updated, different floorplan, different location -- for any reason, give me a call! 2016 will be here before we know it, so the time to start planning is today!
Where there’s smoke there’s ... new detector requirements!
SB 745, which passed over a year ago, is now fully in effect with new requirements for smoke alarms. As of this summer:
- All battery-only powered smoke alarms must contain a non-removable, sealed battery rated to last 10 years.
- All hardwire- or battery-powered smoke alarms must have a label showing date of manufacture and installation.
- Built in hush feature
The bill also updates placement requirements. Smoke detectors must be:
- Installed in every bedroom.
- Installed in hallways leading to bedrooms, centrally located outside sleeping areas.
- Installed on every level/floor, including basements.
- Installed 4 inches from the wall if mounted on the ceiling.
- Installed 4-12 inches from the ceiling if mounted on the wall.
- Installed away from draft areas, such as windows and vents.
And one more thing:
- Landlords can no longer make the tenant responsible for testing or maintaining the smoke alarms. It is the landlord’s responsibility.
Such an easy thing to check as part of your home maintenance, and potentially so critical! Make sure you’re in compliance today!
School’s Out! It’s Summertime!
This year marks a milestone for me personally, as my daughter graduates from Sequoia High School. She’s the last of my kids to complete the school system that we’ve been an active part of for 15 years. I couldn’t be happier with the education that she and my son have received, the experiences they’ve had, the friends they’ve made, and the opportunities that lie before them. Their schools have influenced them greatly, helped form who they are, helped them learn how to relate to a broad spectrum of people and backgrounds, and will continue to benefit them as they move on. So with a mixture of elation and sadness, I give huge thanks to San Carlos Charter Learning Center, North Star Academy, and Sequoia High School, all with amazing teachers who go so far above and beyond to offer our kids as rich an educational experience as they possibly can. So proud, so much gratitude.
Summertime is also a time when our real estate market typically mellows a bit, and pricing plateaus, as people opt to focus on vacations and traditional summertime activities. Will the same hold for this summer? I’m not sure, as we continue to be hampered by historically low inventory, and amped up buyer demand. We continue to see staggering sale prices, and with interest rates continuing to stay at their lows, I don’t foresee any dramatic shifts in our marketplace.
So what does that mean for hopeful buyers and sellers? In a nutshell, don’t wait!
If you’re thinking of selling your home, now is the time. Very little competition, very high market values, very high demand. Present your home at its best, and you will benefit to the max from our current environment.
And if you’re hoping to purchase a home, go for it! Success requires you to be completely prepared, committed, and aggressive! And if you’re concerned about pricing, the reality is this: you benefit far more from paying a bit more for a home and locking in a long term low interest rate, than you would if you were to pay a little bit less with a higher interest rate. A home purchase is a long term investment, and history shows that over time, real estate is always a huge benefit.
So call me! Let’s make this market work to your advantage, and let me help you achieve your real estate goals!
Are We In A Bubble?
For some perspective on our current real estate market, read what Alain Pinel, general manager of Intero Prestigio International, recently wrote:
March 2015 came and went, leaving quite a few financial experts and market observers scratching their heads. Many are thinking back 15 years to March 2000. Déjà vu?
What do I remember about March 2000 in the Silicon Valley? Images and feelings are rushing back, like flashes in the brain, together with jolts of adrenaline. What comes to mind? Euphoria. Exuberance. Let the good times roll. Don’t worry, be happy. Don’t wake me up!
March madness it was. Techies were taking over the world. Any good idea found cash. Angel investors were hunting for innovators. VC people were fighting to bring start-ups to market. The Valley was on fire. Real estate prices were moving up monthly. IPOs were piling up weekly. The dot.com revolution was running the land. The three key words of those times? Money, Money, Money.
Reality outshined dreams. Ambitions inflated on the run. Make a wish and live it. Then came a cloud. Doubts. Fears. The bubble burst. The engine stopped. Prices went south, on Wall Street and on Main Street. 2000 was a tale of two halves: the rise and the fall. What goes up is supposed to go down, the saying goes. I don’t agree with that fatalistic view, but this time it did turn out that way.
Are we reliving March 2000? Have we not been there before? What’s next?
Today, the economy has fully recovered. Unemployment is down to 5.5 percent nationally. The stock market, which has been warming, one month at a time for the last few years, is now steamy. The Dow put a new record on the books on March 2. As for the tech-heavy Nasdaq, which came a hair short of a new high last month, it is still flirting with its March 10, 2000 peak. Hundreds of IPOs are in the pipeline. VC money is waiting in the bank. There is plenty of fixed mortgage money available at less than 4 percent. So, are we in the midst of a growth cycle, or is it the end of the beginning, or is it the beginning of the end?
Relax. The ride is not over, and there is nothing significant on the horizon that suggests otherwise. However, we are not in March 2000. We are in April 2015. All is well in the Valley & beyond, but we are not, and we will not be, reliving the 2000 follies. Here is why:
- The economy as a whole and the stock market in particular, are not exactly exploding as they were in the late 90’s and 2000. We have been grinding, inch after inch. We have not been building a sand castle; this time, we have been slow, patient and wise. We learned the hard way. From 1998 to 2000, the Nasdaq jumped about 150 percent (2000 to 5000). Growth, however palpable it is, is more reasonable now.
- In 2000, 446 companies went public in the US, including 131 in California. Silicon Valley got the lion’s share of this total. The 2014 numbers were more modest. IPOs were down 33 percent from 2000 and the proceeds were down 12 percent from the 2000 level.
- Back in the dot.com boom, most companies on the IPO block were not market-tested and were financially weak. Today, the large majority of the candidates are actually generating revenues and, for many, substantial profit. Different ballgame.
- In 2000, the price-earnings ratio was roughly four times what it is now.
- In 2000, the Nasdaq was fragile and unpredictable, as nearly 2/3 of the index was in hi-tech. Today, this sector does not even represent 50 percent, and the companies have real products/services and proven marketing success
- Today, investors are more knowledgeable. They are picky. They don’t buy fairytales like so many did 15 years ago.
- Today, the Fed is watching the market with eagle eyes, ready to intervene on a moment’s notice.
- Low inflation, a strong dollar, and an imminent rate hike by the Fed contribute to the cooling of the bullish economy.
- Today, commercial banks are more discriminating in making loans to home buyers. Buyers actually have to qualify for the money they borrow. Nice concept. Hopefully this scrutiny is here to stay. It is a guarantee that the last financial crisis we finally recovered from will not resurface anytime soon.
- In 1999 and early 2000, real estate prices in Silicon Valley were moving up at the rate of 20 percent-plus per year. Last year, prices jumped about 10 percent on average. Still huge, but smaller appreciation nonetheless. And I will argue that much of such appreciation was due to the acute shortage of inventory.
- Contrary to the 2000 era, foreign buyers are keeping the market active and stable. Considering that the lion’s share of this demand is fueled by growing economies (China, India, etc.), it is comforting to know that the market will neither overheat nor collapse.
No, it is not March 2000 all over again. We are ok. Repeat after me.
An Urgent Call For Listings
Burlingame -- 9
San Mateo -- 22
Belmont -- 4
San Carlos -- 9
Redwood City/Redwood Shores -- 18
Menlo Park -- 12
Here you have it: February 2015 and up and down the Mid-Peninsula, here are the number of single family homes currently for sale. Open houses resemble rush hour traffic jams, the number of disclosures packets being sent out may begin to rival best seller lists, even though the characters and plots are not nearly as creative and the story lines are completely predictable. Our unseasonably warm weather, along with unbelievably low interest rates and the uncertainly about what the coming months will bring, are prompting home buyers who may otherwise have waited out the winter to hit the MLS early in search of a new home.
So here is my call: if you, or anyone you know, is considering selling a home this year, please contact me. Tell me your plans, your thoughts, your concerns or unique circumstances, and we will determine the best way to make it all work for you. With home values being defined by the market, this is absolutely the time when you will get the very most the market will bear for your home. So whether you’re ready to upsize, downsize, move to a neighbhoring town or out of the area completely, please contact me. We’ll work to achieve your real estate goals, and we’ll do all we can to do so in a way that will amaze and delight you.
I’m looking forward to hearing from you, your family, your friends. Thank you!
Happy 2015! Wishing everyone the very best New Year, filled with hope, happiness, health, and peace. 2015 will be a year of great change for me personally, as our youngest graduates from high school and heads off to places yet to be determined, and our oldest becomes a college senior (!) and hits that landmark 21st birthday! Not sure how all this happened, but here we are!
And here we are, marking the end of an incredible year of real estate on the mid-peninsula, and starting another that promises more of the same. 2014 will be remembered as a year of rarely seen before low inventory levels, historically low interest rates, huge buyer demand, and multiple offers on just about every home that came for sale. The amounts of the overbids were often astounding, as buyers sought to secure the home of their dreams, or at least the potential to become so.
As we begin 2015, pundits are predicting a slowing of appreciation levels, which really has to be as we simply can’t sustain the increases we’ve been experiencing. But unless we’re flooded with new inventory, which is highly unlikely, our local market will remain vibrant and competitive. We are fortunate to live in such a desirable area, with excellent local economics fostered by a vibrant business environment and predictions of a large influx of professionals and their families who want to live and work here. Cities and downtowns are revamping their development strategies, all with the intent of increasing opportunities to live and work locally. Ancillary services and amenities are doing what they can to keep up with demand. It feels like a time of great change, with great promise.
This is not a market for casual lookers, this is a market where buyers and sellers have to be committed, capable, patient, and positioned to their best advantage in order to succeed. Sound intimidating? It doesn’t have to be, as long as you have guidance from expert professionals to help you through the process.
So let’s welcome 2015! If you’re considering buying or selling a home this year, start planning now! Seek out professionals who you trust, who you have confidence in, who are truly expert at what they do. With a stellar team working on your behalf, you are sure to have as good an experience and result as possible.
Looking forward hearing from you, and looking forward to a wonderful year!
Buying & Selling Into Winter? Yes!
Can it really be November already? Here’s hoping you’ve enjoyed your extra hour of sleep this morning, and as the days get shorter and a chill fills the air your thoughts may begin to drift into holidays, winter vacations, celebrations, spending time with family and friends, and house hunting.
What? House-hunting in late Fall/Winter? Prime time may typically be the Spring, but this time of year can be an awesome time to search for a home, and for many, a great time to sell as well. And here’s why:
Sellers are always told to make their homes feel welcoming, warm, and to show them at their best. For many, the holidays do bring out the best, with their homes beautifully decorated, sweet-smelling, and glowing with seasonal lighting and logs lit in the fireplaces. If you choose to sell your home during this time of year, it’s important to accessorize carefully and tastefully, but the effects can be dazzling.
And buyers? Face it: buyers looking at homes this time of year are very serious buyers. The good news is that they may not have as much competition; the other side of that story is that they may not have as many homes to choose from. But if a match can be made, it’s a wonderful thing. Even more, what a great time of year to enjoy settling into a new home, especially those who are lucky enough to have lighter work loads and extended days off.
So consider the possibilities, and contact me for more information about buying or selling a home. With inventory scarce, and interest rates still at historical lows, the timing may be ideal!
We’re three-quarters of the way through 2014 (!) and stories have been swirling all year long about everyone’s favorite topic: real estate! To set the record straight, here’s some retrospective to see where we’ve been, and perhaps some insight as to where we’re headed. Buckle your seat belts ... it’s quite the ride!
Here are some milestones in a sampling of our mid-peninsula towns for:
~Highest Sales Price of a Single Family Home (HSP)
~Biggest Differential between List Price and Sales Price (LP/SP)
~Highest Price Per Square Foot (PPSF)
(all data based on closed single family homes listed and sold between 01/01/14-09/01/14)
HSP -- 124 Normandy Court, a 4 bdr, 3.5 ba, 2,527 sf home on a 10,000 sf level lot, stunningly remodeled with full-on San Francisco and bay views, sold for $2,850,000
LP/SP -- 2235 Carmelita Drive, a 2,390 sf 4 bdr, 3.5 ba home on a 5500 sf lot listed for $1,698,000 and sold for $2,272,000, a mere $574,000 overbid
PPSF -- 294 Devonshire Boulevard, an original 1,190 sf home on a 16,300 sf lot sold off-market for $1,850,000, or $1,554/sf. 37 Wildwood Avenue, a beautifully remodeled 1,475 sf home, also sold for $1,850,000, calculating out to $1,254/sf
HSP -- 886 Edgewood Rd, a 5 bdr, 3 ba, 3720 sf home on a 42,000 sf lot in beautiful Edgewood Park sold off-market for $2,900,000.
LP/SP -- 862 Blandford Boulevard, a 3 bdr, 2.5 ba, 2270 home on a 9,900 sf lot in the same Edgewood Park neighborhood, listed at $1,298,000 and sold for $2,150,000, only $852,000 higher. Meanwhile, up in Emerald Hills, 3928 Lakemead Way, a 4 bdr/4 ba, 3540 sf home with bay views on a 12,000 sf steeply downsloped lot, listed for $1,698,000 and sold for $2,300,000, a differential of $602,000
PPSF -- 235 Beresford Avenue, a 730 sf, fixer/teardown sold for $875,000, or $1,198/sf. 1716 Virginia Avenue, a sweet 850 sf home, sold for $975,000, or $1,147/sf
HSP -- 830 Covington Road, a very nice, comfortable 6 bdr, 4.5 ba, 4178 sf home on a 19,440 sf lot sold for $2,350,000
LP/SP -- 2115 Shirley Road, a 3 bdr, 2 ba, 1,900 sf home on an 8,750 sf lot listed for $975,000 and sold for $1,430,000, a $455,000 difference
PPSF -- 2008 Monroe Avenue, an 1,160 sf home on a small 4,000 sf lot, sold for $1,180,000, or $1,017/sf
HSP -- 1275 Santa Cruz Avenue, a wonderful 4300 sf, 5 bdr, 4 bath (+ 2 1/2 ba) home on a 21,100 sf lot, albeit on such a busy street, sold for $5,750,000
LP/SP -- 1341 University Avenue, a 3 bdr, 3 ba, 1690 sf home on a 5750 sf lot sold for $2,400,000, $605,000 higher than its $1,795,000 list price
PPSF -- 1098 Coleman Avenue, a charming 1150 sf home on a 25,500 sf lot sold for $2,895,000, or $2,517/sf. Selling essentially for lot value were 2001 Camino A Los Cerros, 12,170 sf lot, for $2,822,000 or $3,713/sf, and 1337 Sherman Avenue, a 6,250 sf lot, for $1,800,000, or $1,855/sf. Wait till the new homes get built!
HSP -- 134 West Poplar Avenue in beautiful San Mateo Park, a 5 bdr, 4.5 ba, 4,185 sf home on a 23,200 sf lot sold for $3,988,000. Updated and filled with old world charm, it has a separate guest house and pool
LP/SP -- 804 Parrot Drive, a 4 bdr, 3 ba, 3,370 sf traditional home on a 7,500 sf lot, listed for $1,995,000 and sold for $2,600,000, a $605,000 differential
PPSF -- 1254 Oak Street, a 1050 sf bungalow with a ‘bonus’ room on a 5,000 sf lot, sold for $1,301,000, or $1,239/sf
Is the market still hot? You bet! Nice homes, nice lots, nice locations, nice potential ... always in demand. For guidance through it all, call me!
5 Reasons Why Trulia, Zillow And Any Other Real Estate Websites Will Never Eliminate The Need For Realtors
With the news of Zillow’s and Trulia’s merger, many pundits are predicting a significant change to the way people buy and sell homes, eliminating the need for Realtors. While online websites are a useful resource, they will never take the place of Realtors and other professionals who team up to guide home buyers and sellers through the complex process of buying or selling a home. Here are just five reasons why:
- Home Values. Have you ever looked up your home’s value online? Did it seem ridiculously low, or way too high? Websites such as Zillow and Trulia are the first to admit the home values they post are off. There are many reasons, including the notion that they don’t consider any specifics of a home, such as upgrades, remodeling, views, or any other amenities that can make all the difference in the value. Their formulas are as generic and non-customized as can be, and it shows. An experienced, expert local Realtor is best equipped to provide you with the current market value of your home.
- Buying or Selling a Home is a Full Time Job. Inspections, Disclosures, Legalities, Liabilities, Marketing, Signage, Flyers, Phone Calls, Contacts, Negotiations, Escrow, Follow Up, Issues, Solutions ... Who takes care of and manages all of this and so much more? Your Realtor! Never will a website be able to provide you with the customized, personalized service that an excellent Realtor will. When you hire a Realtor to represent you, he/she works on your behalf as his/her full time job, so that you can not worry about anything and do your full time job.
- No Substitute for Seeing a Home “Live”. Photos are a great reference, but nothing replaces being able to see a home in person so that you can get a sense of the character, the flow, the feel, the light, and all of those subjective, sometimes intangible qualities that will make you fall in love, or run away. Traffic patterns, neighborhood characteristics, sounds, sights, smells ... these are experienced only when you visit a home and spend time there. Photos, videos, floor plans, virtual tours are all helpful, but they will never take the place of actually being there. Your Realtor can make sure you have all the time you need to make a well informed, thoughtful decision.
- It Takes a Team to Buy or Sell a Home. Whether buying or selling, you need to have complete confidence in the entire team working towards the close of your home. Realtors, lenders, appraisers, inspectors, escrow officers ... they all need to be expert and respected in their fields, and they need to know the local market, local standards of practice, how to resolve any issues that may arise ... how to work together to get things done! Can you find this caliber of professional on a random website? And would you be willing to trust someone who isn’t personally referred to you or whose qualifications you can’t confirm? Highly doubtful.
- Real Estate Is Always Local. Zillow, Trulia and other nationwide websites can give you general information, general trends, a sense of the kinds of homes that might be available in different areas, but they will never be able to provide the up-to-the-moment scoop on local markets, micro markets, and individual homes. A website may be able to talk some generic talk, but they will never be able to walk the walk in the same way as a Realtor who lives and breathes real estate 24/7 in his/her town. Buying or selling a home is way too significant to trust to anyone but the best-qualified professionals who will work on your behalf.
Bottom line: Zillow, Trulia, and other real estate websites are fun to peruse, but when you’re ready to make a move, call me!
Is Our Market Softening?
It happens every year, especially in the kind of fast-ascending market we’re in. As summer time approaches, we start hearing that the market is slowing, inventory is increasing, prices are softening .... oh no. Is the sky falling? Absolutely not.
Pricing and activity levels that go up as quickly and significantly as we’ve seen year to date simply cannot continue their frenzied pace unchecked. When we hit the ground sprinting as we have this year, we eventually all need to take a deep breath, and assess and adjust to our new reality. The market needs to pause, even if for just a brief moment, and summertime is when this typically happens.
Why? If we consider a typical real estate cycle (is there even such a thing?!) the year starts with few homes for sale, pent up demand from buyers left over from last year, and buyers entering the market this year. As they vie for the few homes that come available during the first few months, we start to hear about multiple offers and large overbids. With a significant percentage of buyers paying cash or large down payments, appraisal concerns diminish.
During our spring market, typically the busiest time of year, this trend continues, with more homes coming for sale -- at higher pricing reflecting the newly available comps -- and more buyers looking for their next home. The multiple offers and overbids continue. As the ‘can you believe it?’ talk permeates our communities, some homeowners might decide it’s time to list their maybe-not-so-nice homes at prices that reflect the trend of price increases continuing. And not only do they list their homes high, they do so with the expectation of the multiple offers, overbids, and even higher sales prices they’ve been hearing about.
And that's where the perception of slow-down begins. Buyers are usually willing to pay market value or more for a home they can be proud of in it's current condition or for the potential it provides. So while these homes continue to attract the attention, we begin to see a supply of overpriced homes with flaws that may not sell immediately. Couple that with summertime, when people are on vacation or otherwise distracted, and suddenly the market seems that it might be softening. Actually, it's just not accelerating at the same pace it was a few months earlier. Pricing and activity levels plateau a bit. But once summer comes to an end, typically we'll see everything ratchet up again, and head into the year's end at a brisk pace.
So what does this mean? Sellers need to be realistic, and make sure their homes shine. Many are benefitting from a market in which their homes are selling for record-breaking prices that are absolutely the most the market will bear, but there's no need for excessive greed. Buyers need to know that this market is fast and aggressive, and that summertime may provide them a window of opportunity. Pricing is always relative, and history always shows that real estate is always one of the soundest investments anyone can make.
Looking for expert guidance through this whole process? Please give me a call. And in the meantime, enjoy our 4th of July in a community, city, state, and country in which these are the kinds of issues we have the luxury of concerning ourselves with.
How To Succeed in Today's Real Estate Market (But You Have To Try!)
Spring is always such a busy time! Warming, lengthening days lure us outside, end-of-school-year events and activities ramp up, and the housing market is as overheated as our pre-seasonal 90-plus degree days. This year, with continued extremely low inventory and overwhelming demand, things are just a little more frenzied, which means we all need to keep our cool as we continue to deal with multiple offers, cash offers, record-breaking pricing, and the realization that this market may not significantly change for the near future.
As people lament our market's challenges, many are questioning whether we're in a new bubble. One of the main reasons we may not be is that today's buyers are putting much more skin in the game, so to speak. All cash or hefty down payments are much more the norm, compared to the no/low percent-down purchases of yesteryear. Loans are readily available, and interest rates are awesome, but the qualification process is far more comprehensive than in the past, where it seemed anyone who was breathing could get a loan. Suffice it to say that if a lender offers a homebuyer a loan, that individual can well afford to be borrowing the funds.
Not unexpectedly, we are beginning to see some 'buyer fatigue,' people who are frustrated after losing out on a few homes perhaps, and are considering putting their purchasing plans aside. This may not be the wisest course of action, as buyers may find pricing to have jumped when they resume their search. List prices reflect the latest comps; waiting for pricing to get back to where it was six months ago probably isn't realistic.
So how do buyers succeed in our current market? Be ready, be aggressive, do all you can do. No more, but certainly no less. Remember that the actual price of a home is always relative, and relevant only when you're buying or selling. It's your monthly cost of ownership that impacts you every day. Paying $200,000 over list for the home you want may seem huge, for example, but you may find that the relative increase in your monthly mortgage payments, especially with today's low interest rates and tax advantages, is manageable. And if it doesn't work out, adjust, and continue your search.
And sellers? Even in a sizzling market, it's still critical to have realistic expectations, and to present homes in the most appealing way. It's true that sellers have an opportunity to get the absolute most for their home these days, but the market unfailingly dictates every home's value. Sellers will find that while buyers are willing to pay, they want to feel good about their purchase.
So Happy Home Buying, and Happy Home Selling. Remember that the right Realtor is critical for your success, so please give me a call. And don't forget to enjoy our Spring, and all that it offers.
Today’s the first day of the season, and while it doesn’t really feel like we’ve had much winter (sorry to all our kids in school back east!) it’s delightful to see everything in bloom, hear the birds sing, and enjoy our warming, lengthening days. To all of us who, from time to time, have wondered why we pay what we pay to live here, there’s nothing like a beautiful spring day to remind us.
Speaking of what we pay to live in this amazing area, our local real estate market has skipped the typical winter hiatus and continues to blast onward and upward, limited only by the scarce number of homes for sale. We’ve talked about sellers needing to put their home’s best foot forward, so to speak, in preparing and presenting them for sale, but what can buyers do to successfully secure a home in our current market?
Be Ready -- Buyers have to be completely ready to go with financing, from liquid down payment funds to being completely approved by a reputable, local lender. Buyers also have the opportunity to learn about the condition of a home prior to making an offer, completing any due diligence and getting answers to any questions or concerns. It’s much more the norm now to forego financing and/or property condition contingencies, so don’t put yourself in a position of not having that choice, and potentially not getting the home, because you aren’t ready.
Be Aggressive -- Today’s sale prices are tomorrow’s comps, so don’t hold back. Pricing that seems high today will seem like a relatively good deal in the coming months. We all have limits, of course, but the last thing you want is have a case of the “woulda, shoulda, coulda’s” when you find out that you needed to step up just a little bit more to get the home you wanted. Use low interest rates and more to your advantage. Get an idea of what any work you'd like to do to a home will entail. And if you get beat out by someone who has all cash or some other factor that you can’t compete with, just move on. Do all you can do. No more, no less.
Be Flexible -- We all have ideas of our dream homes, but how realistic are they? Sometimes a home you see may cost a little more than you'd prefer, or it may need a little more work than you had hoped to take on, or it may not have everything you had on your wish list. Don’t immediately write a home off if you don’t see it as perfect. In all likelihood it won’t be your last home, and nearly everything in a home can be changed over time, including your preferences and needs. A little open-mindedness can go a long way, not just with the home itself but in dealing with sellers as well. Specific needs, rent backs, for example, may be all important to sellers. When preparing an offer, consider all the elements that may make yours stand out. Give sellers as much as you can of what they need; in the long run it most likely won’t make a huge difference to you, but it could make all the difference in your offer being chosen over another.
These are helpful tips, but most important in navigating our real estate market is the guidance of an excellent, expert Realtor. Looking to make a move this year? Please give me a call! I'll ensure your success, whether you're buying, selling, or both!
Fix It, Stage It, Price It, Sell It!
Here we are again, in yet another year of ridiculously low inventory and soaring demand, a market in which some sellers may think they can list their home for pie-in-the-sky pricing, do nothing to prepare it for sale, and have it sell for even more in record time. True? Absolutely not. Even in the most frenzied markets, it’s critical to do the work required to ensure that your home will sell for the most the market will bear. Here are the basics:
In the spirit of good things come to those who wait, I am thrilled to finally introduce you to my revamped website! A new year, a new look, easy to navigate and great information. My hope is that you’ll find value here, and rely on it (and me!) for anything real-estate related. Let me know what you think.
And now that we’re officially off and running in 2014, the question remains: what can we expect in the coming year?
I think it’s fair to say that 2013 took everyone by surprise with the strength and competitiveness of the market and the incredible increases in home values. I think it’s also fair to say that pundits expect this trend to continue this year, perhaps minus just a bit of the vigor. What are the key factors that will influence the 2014 real estate market?
Home sales are predicted to outperform 2013 levels in markets with hot economies, such as our Peninsula market. The KCM Blog, for example, predicts that “home sales will skyrocket with increases of 10-15% in 2014.” Others have a more moderate idea, such as Intero CEO Gino Blefari, who predicts “that markets where prices may have climbed a bit too high this year and markets that still struggle with low inventory may not see the same incredible summer sale season that they saw in 2013.“
Of course, to have increased sales, we have to have inventory, and once again, the prediction is that inventories of homes for sale will remain low ... much too low in many markets. The good news, Blefari points out, is that rising home values have pulled a lot more homeowners out of negative equity, which may give them a newfound freedom to sell. With the pent-up demand that’s been building over the last few years however, it’ll take a LOT of homes coming for sale to begin to balance the market.
As our economy continues to improve, and the Feds taper their efforts, most experts agree that mortgage rates will rise from the amazing historic lows that have been holding for the last few years, even thought the Feds have stated many times their intent of keeping rates low. How quickly we’ve been spoiled by these unsustainable numbers; now when we hear rates approaching 5 percent or even higher we cry fowl. The reality is that there are always loan programs that will work, rather than relying only on a 30-year fixed program. And while a slight uptick may affect prospective buyers who are truly right on the edge of qualifying, the probability of higher rates may encourage buyers to act more quickly so they can capture rates that are more appealing to them.
Short supply, high demand, low interest rates, strengthening economy ... it doesn’t take a PhD in economics to realize that all factors point to home values rising. While we may not see the double digit percentage increases we saw last year, the consensus is that we will end the year with higher home values.
What does this mean for you?
If you’re considering selling and/or buying a home this year, it doesn’t seem to make sense to wait. Contact your preferred Realtor to begin planning for your home sale and/or purchase to ensure that you’ll be positioned at maximum advantage for market conditions. Your Realtor can guide you to consider all the relevant factors that should be part of your decision-making process, and can help prepare you, and your home, for success in today’s marketplace. Buying and selling homes can be an exciting journey with the right Realtor at your side. Give me a call; I’m ready to get to work for you, and to help you achieve all you desire in 2014.
What Makes A House A Home?
When we’re looking at homes, we tend to focus on the number of bedrooms, bathrooms, if the kitchen’s redone, how big the yard is. These are all important for sure, but what is even more so, and far more difficult to determine as part of a home search, is the sense of community that can make all the difference.
This became so abundantly clear recently in the midst of a family tragedy. The close-by neighbors who stopped by and continue to check in, the willingness of friends to alter their plans, to extend a supportive hand and pay their respects, everyone who made a phone call, sent a message, mailed a card ... these are the people who help make a house a home, who make a neighborhood, who create community. These are the gestures that truly touch your heart in a way that granite counters never will.
We are so fortunate to live in an area with wonderful neighbors, neighborhoods, and community. It’s easy to get wrapped up in our daily lives, with busy schedules and non-stop activities, reducing our contact to a wave as we back out of our driveway, or a quick hello as we wait in line at the grocery store. But even if we don't always take the time we should to ask 'how are you' and really listen to the answer, it's comforting to know that when it really counts, in good times or bad, we are here for each other.
So when considering a home purchase, look at more than just the physical attributes and amenities. Spend some time walking around, perhaps meeting some neighbors, visiting nearby parks, downtown areas, getting a feel for the ambience and synergy. After all, you can pretty much make a house whatever you want it to be by remodeling, renovating, even rebuilding, it all just takes time and money. But a neighborhood? A community? These can often be priceless.
This is the time of the year when schedules get crazy with end of school year, graduations, Mother's Day (don't forget!) and so much more, It's also the season when house hunting is in full bloom. We've talked a lot about our current market's extreme imbalance of supply and demand. Even though we're beginning to see just the slightest uptick in inventory, homes for sale are being swooped up by buyers. Overbids are bringing pricing back to peak levels of yesteryear, buffered by historically low interest rates that are giving today's buyers so much purchasing power, allowing the cost of owning a home to be in line with personal budgets, even if the actual purchase prices don't seem to be.
So what are buyers looking for in a home? Intero's global real estate partner, Luxury Portfolio, together with the Harrison Group, conducted a survey that focused on three income groups: upper middle class ($100-$149k income), core affluent (up to $450k income) and one percenters (more than $450k income). What they heard is that home buyers are looking for quality, and they're willing to pay for it.
This trend represents a shift in priorities from “I want a good deal” to “it’s expensive but it’s worth it.” Here are the features these homebuyers are looking for:
* Designed for entertaining (1st choice for 80% of millennials, ages 18-33, and generation x-ers, ages 34-47, and 83% of baby boomers/matures, ages 48-67). As such, amenities like fabulous kitchens with professional-grade appliances and outdoor decks and patios that accommodate get-togethers with family and friends are a must.
* Master bedrooms (67% and 74% respectively). In addition to size and style, must-haves include en-suite luxury bathrooms and walk-in closets.
* Lots of open space (60% and 65% respectively). The key word here is privacy. The more the better, with space around the home and nice scenic views.
* Library/work space (50% and 57% respectively). A lot more people are working at home these days, at least some of the time. Even if you don’t, a nice dedicated office space/den to read, relax, and escape is desirable.
* Open floor plan (44% and 51% respectively). Especially with less square footage, an open floor plan can make a home feel spacious and airy. And whether you want to be able to watch the kids, or if you’re the designated cook, no one wants to feel cut off and isolated.
* Pool/spa/hot tub (44% and 36% respectively). Whether for entertaining, or for personal or therapeutic enjoyment, a water 'feature' can be desirable.
Do you agree with these priorities? Let me know your thoughts, and of course, if you’re looking for a home with these or other features, I’m ready to help you find it!
Today's $600 is Yesterday's $400
As we battle through low inventory, multiple offers, and rising prices, pundits are comparing today's market to peak markets of previous years. However, there is one very significant difference that makes today's market so much more manageable for buyers: historically low interest rates. Today's $600 is the $400 of yesteryear
What does that mean? Consider 2003, a year when the market was active, prices were healthy, and interest rates were about 6.15 %, according to Freddie Mac. As such, each $100k of mortgage (principal/interest) cost a little more than $600 per month. Fast forward to today with Freddie Mac noting interest rates in the mid 3% range, making each $100k of mortgage (principal/interest) about $445 per month. What that means then, is that the cost of a mortgage today is about 25% less than it was a decade ago!
Wow! This gives today's buyers incredible purchasing power, and the ability to focus more on the cost of owning a home and how it fits into a monthly budget, rather than only on the purchase price. If it takes a $100k more to get the home you want, financing it for an additional $445 a month may be pretty manageable. That amount decreases even more when you calculate in the potential tax savings.
The same goes for paying more for an updated and remodeled home compared to one that is more original and requires a lot of work. It's much more manageable to finance a $100k, for example, than paying less and then coming up with $100k out of pocket (along with time and effort!) to pay for a new kitchen and baths. And if you follow national trends and live in your home for say, seven years, the total amount you're paying for that new kitchen and baths as part of your loan is a fraction of what you would pay out of pocket to install them.
By no means am I suggesting that $100k, or $445 per month, are amounts we should be cavalier about. But the low cost of money allows us to aggressively pursue the homes we want knowing that we have some options, rather than hitting a wall. In today's market, it's not so much about the sale price, it's the monthly cost of owning the home of your dreams that counts.
And the first step to securing your dream home is to hire an excellent Realtor who can guide you through the process and help you focus on the factors that really matter, rather than react to a list price which may or may not reflect the true value of a home.
So give me a call, and let's get you a wonderful home to call your own!
SELLERS! HERE'S YOUR WAKE-UP CALL!
HAPPY NEW YEAR!
It's been amazing year. In addition to some personal landmark events -- son goes to college, daughter releases three original songs (check out Jordan Hurwitz on itunes, spotify, amazon!) -- I've thoroughly enjoyed the wonderful individuals and families I've been honored to work with. I've helped some move out of the area, others move back, helped some adapt their home choices to changing lifestyles and personal circumstances, some upgrade to larger homes, others adjust to the need for less space. And of course, my awesome first-time home buyers! It's so fun to watch as they enter their very own home for the first time! It's a privilege to help others with their own landmark events, a thrill that will never get old. So as I've said many times before, thank you to all who put your trust in me to help with such important decisions and events; may I always exceed your expectations.
So give me a call, and let's make 2013 your year for real estate!
What do homes, kids, schools, and community have in common? A lot, I think, especially evident this week as my son graduates from Sequoia High School in Redwood City. Am I a proud mom? Absolutely. Jake has accomplished great things in high school, graduating with a full International Baccalaureate Diploma and designated a Salutatorian of his class. During the past four years he has enjoyed a stellar academic education along with so many amazing opportunities; one of the highlights for me was the band's recent performance of 'Rhapsody In Blue' featuring Jake on piano. All of his hard work has lead him to his next adventure, as he heads east in a couple of months to begin college.
Jake has been able to do all of this and so much more at a public high school (which followed a public elementary/middle school) with a student population that includes kids from an extremely diverse range of socio-economic backgrounds. He's been able to thrive in a student community in which acceptance, respect, and support are nurtured and prevalent. He and his friends and classmates have worked hard, played hard, and have excelled in so many ways. They've challenged each other to reach higher, they've propped each other up when they've needed it, and they've cheered each other on. They've developed into exemplary young men and women, and I have no doubt that they will all contribute to our world in wonderful ways.
The State of the Market
Here we are in May 2012, and who would have predicted that our local real estate market would have turned so dramatically? The predictions I made at the beginning of the year have proven to be a mere understatement, as multiple offers have returned in a very big way, brought on by extremely low inventory and lots of pent-up demand, continuing historically low interest rates that are giving buyers unparalleled purchasing power, and a concern that these favorable conditions may not last. Prices are increasing, there's a perception that upcoming IPOs such as Facebook may flood the market with new homebuyers, and there's a higher comfort level in regards to our overall economy and job market.
So what does this mean for buyers and sellers?If you've been considering selling your home, now is the time! It's just as critical as ever to put together a sales strategy of prepping your home, marketing it to the max, and pricing it so that you will be able to get the best pricing and terms that today's market will bear. If you'd like an idea of what that may be, just give me a call. I expect you may be pleasantly surprised.
If you're considering buying a home, don't despair, just be prepared! It's so important to be completely approved before you begin your search, so that you can position yourself to aggressively pursue the home of your dreams. The more comprehensively you prepare for the home buying process, the better equipped you'll be to succeed regardless of your competition.
In today's market, it takes a team of experienced experts to ensure your success. Please contact me whether you're buying or selling. We'll make it happen!
The Difference Between Short Sales, REOs, and Regular Sales
I recently had the honor of representing my clients in their quest to purchase a home, and of the five offers that were presented, the sellers chose ours. That in itself was awesome, but what was so great about the experience was that I had the opportunity to present to sellers who were interested in who my clients were, rather than only in the bottom line. What a difference it makes in the process, the outcome, and the satisfaction!
You see, in a real estate environment in which short sales and bank-owned properties (REOs) are not uncommon, it's easy to forget that the most important aspect of Realtors' jobs is that we represent people, not just numbers and terms. We represent dreams and aspirations. We represent emotions, challenges, and a lot of time and hard work.
With a short sale or REO, it's easy to lose the joy of real estate. In these scenarios, the decision-making is taken away from the people who actually inhabit the home, and is handed over to bank employees who are detached and view the transaction as just another file to close out. Their objective is straightforward: get the highest possible price for the sale of the property so their employer comes away as 'whole' as possible. A lot of forms to complete, boxes to check, approvals to get, and compliances by which to abide.
There's no one to read the letter from prospective buyers describing how they fell in love with the home the moment they walked in. No one to admire the child's drawing of what his or her new room will look like. No one to tell that these buyers have made offers on three other homes that they did not get, and how excited they are at the possibility of calling this one their own. In short sales and REOs, buyers are one-dimensional: a purchase amount, a close date. As long as they qualify to complete the purchase, little else matters.
But with sellers of their own homes, everything that is black-and-white with shortsales/REOs suddenly blooms into living color! Everyone is invested in the outcome. While numbers and terms are of paramount importance, Realtors have an opportunity to present prospective buyers as real people, and sellers respond accordingly. We have the opportunity to practice the 'art' of real estate, which is infinitely more rewarding than filling out a form. As part of the negotiations, we can address nuanced needs and desires of both buyers and sellers in a way that often eases the whole process for all parties involved. There is great satisfaction in being able to match up buyers, sellers, and homes that truly are good 'fits'.
Short sales and REOs are part of our real estate environment for the forseeable future, and they can present some amazing opportunities. But in no way do they compare with being able to represent buyers and sellers in transactions in which everyone can walk away knowing they've been considered in a holistic manner. It's the people we're honored to work with every day who make all the difference.
Where are all the homes for sale?
> We talked about it earlier this year and here we are: beginning of March, the prime spring market, and we're at the lowest inventory levels that I can ever remember for this time of year. San Carlos: 31 single family homes for sale. Redwood City: 74. Belmont: 29. Redwood Shores: 6. City after city on the Mid-Peninsula ... you get the general idea. So my message to all who might be considering selling your home: now is the time. There hasn't been a better sellers' market for quite some time, so whether you're moving up, moving down, moving out of the area, or moving for any other reason, do it. The pricing declines that are being reported by the news media? Not here. The large amounts of shadow inventory predicted to flood the market? We're not seeing it. What we are seeing are packed open houses for the homes that are for sale, multiple offers, lots of cash, and eager, anxious buyers.
Why? A whole multitude of reasons: people want to live on the Mid-Peninsula in towns that have charm, a strong sense of community, good schools, vibrant downtowns. People want to live somewhere with great access to pretty much everything and everywhere. People want 'the American Dream' of home ownership. Our economy is diversified. Employment seems relatively solid. Interest rates are amazingly low. And then, of course, we come back to supply and demand. Even if the number of available homes were twice what they are right now, the inventory would still be low. If you're thinking you won't be able to sell your home for a reasonable price please think again. Let this market work to your advantage. Call me for an evaluation of what your home might command in today's real estate market. You'll be glad you did.
Two refrains are the talk of our local real estate market these days ... one is ‘what a great time to buy’ and the other is ‘where are all the homes for sale?’ An interesting predicament, to say the least. So what’s going on, and what can we do about it?
A great time to buy? Here are the top reasons why.
* Interest rates are amazing. I don’t know how much more emphatic I can be, but when have we ever been able to get loan rates as low as 2.5 percent! From term-fixed to 30-year rates, there are a variety of programs that give buyers so much purchasing power! Yes, you have to qualify, and yes, that process can be trying, but come on. What a perfect time to lock in low payments for long term. You’ll be surprised at how much more home you can afford at today’s rates, compared to if they increase a point or two. If you’ve been on the fence, it’s time to jump off, and into a home.
* Rentals are few and far between, and expensive! Why pay someone else’s mortgage when you could be paying your own? If at all possible, buy!
* Prices are stabilizing, and may be heading up. Everyone is looking for the deal, and everyone wants to hit the market at the absolute bottom. But we won’t know the bottom ‘till it’s long past, and then you’ve definitely missed it. What we do know is that our local market is active, with multiple offers commonplace. When homes start selling for more than the list price, they create the new comps. That’s how the upward trending begins. Is that where our market is? Very possibly.
Ok, you’ve been looking. But there are no homes for sale!
It’s true. Our local inventory of homes for sale, which is always low, is now meager at best. Homes that have been on the market for months have been picked over, a few times. Very few homes are being put for sale, and they're commanding a lot of attention. So should you just give up? No way. Finding the right home to buy can take some time, and being successful in buying the home you want takes preparation and perseverance. So don't despair, just get ready and get aggressive. Even if a home has multiple offers and sells for more than the list price, remember that today's overbids are tomorrow's comps. With interest rates as low as they are, your monthly payment is probably more important than the price you're paying for a home. Adding $25k to your loan probably won't make a significant difference in your monthly payments, but it may make the difference in getting the home you want.
We're hoping more homes come for sale as the winter (what winter?!) folds into spring. If you're considering selling your home, it's a great time! The advantages regarding purchasing power that buyers have right now will benefit you as well. So don't wait ... fewer homes on the market give you an opportunity to showcase yours!
With signs pointing to a strengthening economic recovery nationally as well as locally, many are saying that 2012 is the year for real estate. Pundits such as Warren Buffet and other economists are saying so, and the new year brought a flurry of headlines to this effect (per KCM Blog):
Washington Post: “Housing Market and Economy Showing Encouraging Signs.”
The Wall Street Journal: “From Bottom Up, Signs of Housing Recovery”
USA Today: “Housing Outlook is More Upbeat”
CoreLogic: “CoreLogic’s chief economist Mark Fleming says housing statistics and the duration of the downturn to date indicate 2012 may be the year the housing market begins to turn the corner.”
Freddie Mac: “With the New Year comes a sense of cautious optimism. There are some positive signs in the job market and consumer confidence; housing is starting to raise hopes for continued gradual economic recovery.”
Fannie Mae: “The housing sector will likely take incremental steps forward in 2012 …according to economists at Fannie Mae.”
So, if you've been thinking about selling or purchasing a home, this is the time! Give me a call, and we'll put a plan together to help you benefit from current market conditions, and achieve all of your real estate goals!
Happy New Year! I hope you've enjoyed this holiday season, and that it's given you joy and inspiration to last long into 2012. We have so much to be thankful for, and so much to look forward to! Life is a gift, and we do it justice by treasuring every moment. From my family to yours, best wishes for a year filled with good health, good tidings, and the continued quest for peace throughout our world.
It was a year ago that I launched my website! I hope you've found it full of information that is useful, informative, interesting, and worthy. I hope you refer to it as often as appropriate, and I hope you refer friends and family to it (and me!) as the resource for all things real estate. Suggestions and feedback are always welcome!
I am so grateful to all of you who over the years have trusted me with your real estate transactions and who look to me as your real estate expert. And I so appreciate your trusting me to work with your friends and family who you refer to me; as you know my commitment to excellence is unwavering and unparalleled, and I strive to live up to your highest expectations. So thank you for my career that I love and the opportunity to work people I enjoy ... as the saying goes, I couldn't do it without you!
So what about real estate? Key market factors that defined 2011 include:
*stabilizing/increasing sales prices
*the return of multiple offers
*increasingly stringent mortgage guidelines
I've always said that our local housing market is a unique and protected real estate pocket, and while we've been affected by the rough economy, we have come through the last few years fairly unscathed when you compare us to pretty much anywhere else in the country. The same criteria that keep our property values high are what has allowed us to remain in relatively good shape. Location, jobs, supply and demand ... all of these criteria will continue to sustain us in the coming years.
So what can we expect in 2012?
Of course, pundits are all over the map. However, I think we'll see:
*cheap mortgages, but with a lot of t's to cross and i's to dot on the qualifying and processing side
*relatively low inventory, with lots of pent-up demand
*prices that will reflect supply and demand; nice homes in good school districts will continue to sell extremely well
*a good local jobs outlook that will enhance our housing market
*the prospect of IPOs for local companies like Facebook that have many all atwitter (no pun intended!)
This year more than ever, it's critical to work with Realtors who are truly excellent at what they do. With the complexities of financing and appraisals added to the mix of having the right professional market your home to ensure the best pricing, terms, and performance, it's essential to hire an expert Realtor. Gone are the days when anything less than the highest level of skill, up-to-the-minute knowledge, and complete proactive dedication to your success will do. It's equally important for buyers and sellers, as not only do you need to make sure you have the best representation, but you also need to be aware of the caliber of agent who's sitting across the negotiating table from you.
So what are your plans for the coming year? Do you anticipate a move? Do you have friends or family members who may be considering buying or selling a home? Call me so we can start strategizing and putting a plan together ... let's make it happen!
Here's to a wonderful 2012!
Q. Now that the holidays are approaching, should we hold off on our home sale and purchase till next year?
A. No, not at all. While so many get caught up in all the holiday dazzle, these last two months of the year create a market with it's own unique dynamics that should not be ignored by serious home buyers or home sellers. This year in particular has some added features that make this a perfect time to buy or sell.
Fewer buyers, serious buyers -- Unlike the annual spring frenzy, there are fewer people looking to buy a home during this time of the year, but those who are are very serious about achieving their goals. Perhaps they've been looking for some time and just haven't seen the right home, or perhaps they've been unsuccessful in their bids for homes they've identified. Whatever the reason, folks looking to purchase a home now are motivated to do so.
Fewer sellers, serious sellers -- While many may not think this time of year is a good time to sell, homes often show best during the holiday season. Well lit, toasty warm homes create a welcoming cozy feel for potential buyers, and a reasonable amount of tasteful decorating for the holidays can greatly enhance a home's appearance. Sellers who may have been a little too optimistic with their pricing may often adjust it now, hoping to complete the sale before the year's end. As with buyers, sellers who have their homes for sale this time of year most often are very motivated.
Interest rates -- We've heard it before and we're hearing it now: interest rates are at historic lows. Hovering around 4 percent (give or take a bit depending on the program), current rates are so low that buyers have much more buying power than almost any other time in history, allowing them to purchase more home and still keep their monthly costs well in line. Why not lock in an affordable monthly housing cost that will never change for the life of the loan? Compared to renting, in which you are subject to someone else's whim and increasing, unstable costs, an affordable mortgage gives you all kinds of benefits. Will these rates last? We've heard that they will be around for a while, but they'll go up the second economic conditions will allow. So grab the opportunity, and make current conditions work for you.
Home prices -- Everyone wants to get the best price at the exact moment the market hits rock bottom, (if not lower!) right? And when we read the news about housing, most of what we hear is that prices will still go down, it's a buyers' market, and more. The fallacy of this line of discussion is based on the notion that all real estate is local, and it just so happens that our local market has been active and vibrant all year. Prices have stabilized, many homes are attracting multiple offers and selling for more than they're listed for, inventory has been extremely limited, and a large pool of buyers is resulting in pent-up demand. Does this sound like a declining market? That doesn't mean that there aren't some great opportunities, but homes that offer the components that are critical, regardless of market conditions -- location, land, space, amenities, finishes and/or potential -- and are perceived as good value will always be in demand. And any savings you might be hoping for by waiting to see if prices drop will quickly disappear with even a slight uptick in interest rates.
A great time to move -- Talk about great gifts! What could be a bigger, more exciting gift for you and your family than a new home! With kids out of school for winter break, easier work schedules due to the holidays, and potentially inclement weather keeping activities indoors, the end of the year is a great time to move. What could be better than to spend the holiday season settling into your new home, and having such a wonderful start to the new year? Sound enticing? If so, please give me a call. We'll work hard to truly make your holidays bright!
Q. What’s up with appraisals?
A. Short answer? A lot. Appraisals, which all lenders require as part of the loan approval process, have gone from being pretty much of a given before the financial fiasco to being a make-or-break issue in buyers’ ability to secure a loan to purchase a home. To understand the hows and whys, a little context is helpful.
The prices that homes actually sell for have always been determined by one of real estate’s most basic tenets: homes sell for what the market will bear. Sale prices may not always correspond with list prices; homes priced higher than what buyers are willing to pay sell for less, and homes listed for less than buyers are willing to pay will most likely attract multiple offers and sell for more. This concept was reflected in the appraisal, which served as a confirmation of value based on the home, its condition, amenities, appeal, local market conditions, comparable homes for sale and that had sold, and more.
After the mortgage meltdown, however, authorities determined that the appraisal process involved inherent risks and undue influence. The way to make appraisals more objective, it was decided, was to limit access to appraisers to avoid any influence in regards to home values, to hire appraisers from an independent third-party pool so that mortgage professionals could no longer choose their own (preferred) appraiser, and to rely on appraisal reports to determine home values much more than ever before.
This may sound workable, but because of the way these new rules have been implemented, the entire appraisal process has become fraught with problems that are affecting many purchases. In fact, the National Association or Realtors just released figures showing that in the month of August, a full 18 percent of homes fell out of contract. A good number of these, I suspect, were due to appraisal issues. Why? Because under the new system, appraisers who are unfamiliar with local markets, local inventory, and local nuances are attaching prices and values to homes in areas and neighborhoods they know little about, and are subjectively valuing features and amenities in a way that adversely affects the net price. And because access to appraisers is so limited, they've found themselves with greatly enhanced power in determining the value of a home and consequently, the amount the lender is willing to lend.
If a purchase is all or nearly all cash, this discussion becomes moot. But for the majority of purchases that involve the minimum 20 percent downpayment, even a small disparity between purchase price and appraisal price can cause huge waves in what otherwise might be a perfectly smooth transaction. Buyers may have to add cash, or sellers may discount the accepted sales price. Or as the statistics show, whole transactions may fall apart. Any of these solutions leaves someone, if not everyone, feeling short-changed.
It's not that appraisers don't have guidelines; they are licensed, regulated, and their work is increasingly audited. They take uniform approaches to determining value, and issue standardized appraisal reports. But within all of this monitoring, there is a lot of subjectivity at play. Information can be interpreted and applied selectively, and as with most everything, beauty (and value) is in the eye of the beholder. Limited inventory and sales to serve as comps make the process even more challenging. Of course there are exceptions; some appraisers are knowledgable, maintain a reasonable level of objectivity, and do a great job. Some lenders are learning to work within the system to improve the quality and qualifications of the appraisers assigned to do the job. Fortunately, there remains one party to the transaction who still has the ability to talk to the appraiser, and who should do everything possible to ensure that the appraiser has as much good information as possible to help them do as good a job as possible. That individual is your Realtor.
Your Realtor should always meet the appraiser at the home. It's the only opportunity to provide an appraiser your input about comparable homes, market conditions, neighborhoods, and all additional information that can affect opinions of value. While there are some appraisers who respond defensively, many appraisers welcome the information. In my experience, the appraisers who are not receptive to input are typically those who are not competent to do the appraisal. As the KCM Blog noted in their October 5 entry, "realize that your agent must sell a home twice: once to a qualified buyer, and second, to the bank through the appraiser."
If you have any questions about appraisals, or if you want to make sure you're working with a Realtor who will do everything possible to make your home buying or selling experience a success, give me a call. We'll tackle every step of the process and get it done!
Q. Rental homes as investment properties?
A. Yes! With more questions about the booming rental market coming up every day, I thought it’d be a good time to look at rentals from an investment perspective. I’ve incorporated much of a recent column written by the founder of Intero, Gino Blefari, but the upshot is, purchasing homes to rent may be a perfect opportunity to take advantage of lower pricing, low interest rates, and skyrocketing demand.
While all the focus has been on the data related to single-family housing – home sales, home values, foreclosures – there's a lot brewing in the market for rentals. Think about the millions of people who've lost or have had to sell their homes and have gone from owning to renting. Think about those who have had to downsize due to job loss or a cut in wages.
Data from the Census Bureau shows that household formation has declined during the recession – most likely because there are more unemployed young adults who are still living at home with their parents, and many of those who have lost their jobs have had to temporarily move in with friends or relatives.
When jobs pick back up and it's time to move out, where will these people go? Will they jump into home ownership? Likely not. They'll be looking for a nice place to rent. And all those borrowers who defaulted on their mortgages? They're probably going to need to rent for awhile too.
So what's the opportunity for you and me?
If you’re in the market to invest in property, you might want to start by looking at duplexes and smaller homes that could be used as rental properties. Picture yourself as a landlord, not a house flipper. The rental market is on fire and, by the looks of it, will continue this way for several years. People have to live somewhere and home ownership is still a few steps away from a pretty large pool of the population. Being a landlord might not be what you'd pictured yourself doing as a real estate investor, but the opportunity to earn extra income speaks for itself.
Please contact me with any questions you may have about investment properties, the local rental market, and all things real estate. There are lots of great opportunities; let me show you some today!
July 4th Reflection--A Threat to Home Ownership and the American Dream
As we celebrate our country’s birthday this week, we can all reflect on what living in the USA means to us (other than a 3-day weekend!). We may think our country is a little bit crazy: change and uncertainty in politics, economics, societal norms, and much more. Yet for all the complaining, disagreement and discontent, all we have to do is look to any other country in the world to realize that we’re actually in a pretty good place. As the first natural born citizen in my family, I appreciate the love immigrants have for our country and all that it offers. Like my parents, so many risked their lives to come to America with nothing more than the clothes on their backs. Through a combination of motivation, inspiration, innovation, bravery, intelligence, hard work and yes, a little bit of luck, they made a life for themselves. They married, they raised their own families, they prospered. They enjoyed the American Dream.
As part of that dream, most of our parents were fortunate enough to own their own home. Mine, for example, have lived in the same home for more than 50 years. When they bought it (even though the pricing seems ludicrous to us today) they leveraged themselves to the max. First loans, second loans, even third loans! Each month, every penny was accounted for in the family budget, and the home took it’s share. But they wouldn’t have had it any other way.
Fast forward to today. While the numbers are dramatically different, the basic premise is the same. Studies and polls show that the vast majority of Americans strongly feel that owning our own home is a big part of the American Dream. Yet in today’s economic climate, there are proposals afoot that, if implemented, could significantly affect our ability to enjoy the same opportunities.
As part of the reactionary evolution of financing, a response to the ‘have-a-pulse, get-a-loan’ mindset that caused so much havoc, the qualifying guidelines are continually changing, tightening, and then changing some more. Making the task just a little bit harder, especially in places like the Mid-Peninsula where entry-level homes are so expensive, is the demise of ‘jumbo conforming’ loans. Introduced a couple of years ago to prop up a falling housing market, loan amounts up to $729,750 were attractively priced in between conforming loans (up to $417,000) and jumbo loans (above $729,750). But the feeling now is that the market is rebounding and the feds are starting to step away. By summer’s end, the interim rate will be set at $625,000. It may not seem like a huge difference, but for buyers who are right on the edge, it can be a ‘buy-or-no-buy’ difference. Housing market conditions have not improved enough to warrant letting the limits drop.
There’s another proposal that, if passed, could cast a significant pall on home ownership. It’s a proposal that’s been bantered about over the years, but now it seems to be gaining some momentum, especially with the government’s quest for revenue sources to offset our country’s deficit. The proposal is to significantly reduce, or eliminate entirely, the Mortgage Interest Deduction (MID). This means that the mortgage interest we currently deduct from our tax returns would no longer be allowed.
One of the great benefits of home ownership is the ability to shelter some of our income through the MID. Without this, the cost of home ownership increases significantly. When the incentive to own a home goes away, so do all the spillover effects: everything from pride in your own neighborhood to purchases to maintain and upgrade your home and so much more. The MID is vital to both home ownership and our economy. It’s time to preserve, protect and defend this critical deduction. The MID built the dream of home ownership in America; our economic recovery won’t be complete without a vibrant housing market.
If you have an opportunity to voice your support for programs that stimulate home ownership and the economy, like reasonable lending practices or the MID, please speak up. Let your congressional representatives know how you feel. And on our country’s birthday as well as every other day, I hope we’ll strive to make the American Dream that includes home ownership a true possibility for all of us, today and in the future.
Q: There’s so much talk these days about renting instead of buying a home. Is America losing it’s love affair with home ownership?
A: Absolutely not! There are some situations where renting truly does make more sense. But studies and polls consistently show that the vast majority of people prefer to own their own homes. There are so many reasons why, here are just a few:
Control -- There’s nothing worse than the hovering threat of that 30- or 60-day notice to move out of the house you’re living in. Busy at work? Too bad. Upsetting for children? Oh well. Nothing else available? Tough. Forcing your kids to switch schools? Bummer. As tenants, you and your family are always subject to someone else’s whim. The only way take control? Don’t be a tenant; own your own home.
Pride -- Not only do you become the master of your destiny (at least as far as housing goes) but most homeowners take immense pride in their homes. 'This is my home’ is a glorious statement, and there’s also the ability to make your home your own, fulfilling your specific needs, preferences, and reflecting who you are. The nasty carpet you were forced to live with in a rental? Gone. The drab off-white walls to which you were dying to add color? Go for it. The 25-year-old oven that baked so unevenly? Replace it. The veggie garden you’ve been longing to plant? Enjoy! Knowing you can do what you want to your home, and that everything will be for your benefit, is a wonderful feeling. The clerks at Home Depot may become your new best friends, and I guarantee that every job you complete will bring you a great sense of joy and satisfaction.
Security -- When you own your own home you truly can be the king or queen of your castle. Your home is yours, and it’s up to you to pay for it, maintain it, improve it, live in it, and enjoy it to the fullest. As long as you hold up your part of the agreement, no one can take it from you.
Good Investment -- Yes, purchasing a home is a good investment. With monthly rental prices of $3000-$3500 and even higher for a minimally acceptable 3 bedroom 2 bath home in a reasonable area, why help someone else pay off their mortgage and increase their equity when you could be accomplishing the same for yourself? With current tax benefits, $3500/month in rent is the equivalent of about $5000/month in mortgage. Yes, you need down payment monies. And good credit scores. And reserves. And a lot of additional checks and balances to make sure you are qualified for a loan. But as the financing world evolves, so do the available mortgage programs. There are programs once again for less than 20 percent down. Jumbo money loans are readily available. Interest rates are resting at historically low levels. Mortgage interest and property taxes are tax deductible, rent is not. The price you pay for your home becomes less relevant than the investment you make (your down payment) as well as the monthly costs of ownership. This becomes even more true the longer you own your home.
Owning A Home -- Is it expensive? It can be. Does it take prioritizing and compromises? Of course. Will the value increase? Most likely over time. But what you have is a tangible asset that you can touch and see every day, compared to other popular investments such as stock and commodities that have shown themselves to be unpredictable, to say the least. And if you take a historical look at home appreciation, you’ll see that no other investment comes close. But most importantly, your home provides you and your family with more than simply a roof over your head. It provides you a place of your own that you can identify with and build memories in, a place that is more than just a house, it’s your home.
Funny thing: as I was writing this response, the excellent real estate-focused KCM blog published an entry titled “Should You Rent Or Buy In This Market?” (Great minds think alike?) Here are some expert opinions KCM included:
“When we examine the relationships between mortgage payments and income and mortgage payments and rent, we see that these relationships have also reverted back to or below equilibrium points. In some cases, particularly when mortgage payments are compared to the cost of renting, home prices actually appear cheap.” -- Citigroup
‘The continuation of falling rental vacancies and rising rental demand will make home buying increasingly attractive,’ especially as rental prices increase” -- JP Morgan
So what does all this mean? It truly is a great time to buy a home! All you need to do is contact me, and we’ll get you on the road to home ownership.
Q: So many of the homes in the area are pretty original, and I have a hard time visualizing how to update them. Does that mean I'm out of luck in finding a home I'll like?A: Absolutely not! There are so many things you can do to truly make a difference in a home without taking it down to the studs. Many are very straightforward; others take a little more time and planning. But with an open mind (yours), and a trained eye (your Realtor, your design consultant), you'll see how much difference a little bit of work can make. Here are the top 10 projects (in order of complexity) that will amaze you:1. Paint. In so many homes you don't even realize how drab the paint is until you cover it with a fresh coat. Bright ceilings in a white or creamy color, and contrasting walls that add color and personality without overwhelming will make a home look brighter, larger, and airy. And if the cabinetry in the kitchen or baths is dark and worn, a nice light color will make a world of difference. When clients have painted their cabinets prior to putting their home for sale, their first reaction has been "why didn't we do this when we first moved in?"2. Flooring. One of the great things about older homes is that they often have wonderful hardwood floors that can be uncovered, repaired and refinished to look virtually brand new and beautiful! Unlike carpet, hardwood reflects light, lightening and brightening the entire home. If you still want the coziness that carpet can bring, you can add area rugs, or even go with wall-to-wall carpeting in the bedrooms. But hardwood flooring is timeless, easy to keep clean, and will help your home look stunning.3. New interior/exterior doors & hardware. Sometime in the 1960s someone decided that the hollow, brown laminate wood doors with gold doorknobs were the way to go. Well, nothing could be further than the truth, or easier to change. There are door replacement companies that will come measure for your new doors, give you a choice of classic styles, custom paint them any color, install them, add your choice of new door hardware, and take away all the old ones for an extremely reasonable price. One of the best things about these companies? The whole process takes two visits: one to measure and order, and one to install. Painless! And you'll love the difference it makes in your home.4. Dressing up the fireplace. So many homes have fireplaces that can be beautiful focal points, once they're made to look their best. Painting or cleaning old brick or stone, or covering it with new stone, and then adding a beautiful mantel or surround can make your fireplace go from faux paux to fantastic. And if you want to be environmentally correct, add a gas line and log set for all the warmth and atmosphere without any of the ashes and mess of wood fires.5. New countertops . If you're happy with the cabinets and configuration in the kitchen or baths, and just want to get rid of the white tile/black grout look, it's easily done by getting prefabricated granite, quartz, or other natural material. By going prefab, you're cutting way back on the expense comparied to a slab. And there's no need to go with a fancy tiled backspash. Just ask your fabricator to cut a six inch tall backsplash from the same material as your countertops. Your kitchen and baths will look nearly new!6. New plumbing fixtures. There's nothing like getting rid of all the bright shiny gold faucets in your home, replacing them with oiled bronze or brushed nickel fixtures. Even chrome is regaining popularity for a contemporary look. If you have all the faucets ready for your plumber so they can all be changed during one service call, you'll find the cost to be modest, especially for the impact!7. New light fixtures. You can rid your home of all those cheesy gold and etched glass or faux-crystal chandeliers, and replace them with fixtures that look great and emit as much light as you need for the specific areas. The hallway you thought was dark? Gone. The dining room you thought lacked personality? Nothing like a great light fixture to add some drama! Again, have all the light fixtures ready for your electrician to change out during one visit for maximum efficiency. Then let the light shine!8. New appliances. Avocado green and harvest gold were certainly popular appliance colors way back when, but even white or beige appliances can still make your kitchen look dated. If you insist on designer label appliances you'll end up spending a lot of money, but you don't need to break the bank if you want good, reliable stainless appliances that will do all you need functionally while significantly changing the look of your kitchen. And, with new appliances so much more energy efficient, it's well worth enjoying the benefit as well as the beauty!9. New windows. You can have beautiful new double-paned vinyl-clad windows installed in one day. Sound too good to be true? Retro-fit windows don't require your old window frames to be removed, therefore you don't need to rip open your exterior or interior walls. They're also a fraction of the cost of other windows. You won't believe the difference new windows can make: aesthetically they're incomparably nicer than old dingy metal framed windows, and they're so much more energy efficient. You can decide which you're enjoying more: the look of your new windows, or the savings on your utility bills!10. New crown molding/baseboards/window & door trim. Consider these additions to be the jewelry of your home: not at all necesary but a perfect -- and economical -- way to dress up your home and add a little bling. You can go basic, or you can go to a specialty shop and get as ornate as you'd like, but you're sure to enjoy the way beautiful crown. base, and trim highlight the rooms of your home.All of these projects can be done with minimal disruption, and you'll get much greater benefit than the investment you'll make. If you need some assistance in figuring out which of these projects make the most sense for you, or who can help you with them, please don't hesitate to ask. Each of our homes is unique, and with projects like these, we have the ability to tailor them to our personal aesthetic and functional pleasure. Enjoy!