Silicon Valley Real Estate Info

Satake Estates is one of Summerhill Homes newest developments.  Located in Mountain View on the old Satake Nursery site (at the end of Marilyn Drive), Satake Estates is a higher end development of 30 single family homes. 

Currently, prices range from $1,537,000 to over $2,013,000 plus options.  Home sizes range from approximately 2238 square feet up to approximately 3358 square feet (s.f.).  Lots range from approximately 6000 s.f. to slightly over 11,000 s.f., with the majority of the lots in the 6k+ s.f. range.  Click here for interactive community map.

When I previewed the homes last Friday, there were many things that I liked about the development; the quality of the construction, the high ceilings, the large bedrooms (so many times new home developements have teeny-weeny bedrooms) and many of the features (I’m sure the model homes included many optional upgrades).  I liked the emphasis on “green” construction, energy efficiency and that the homes were designed to be Greenpoint rated.  I liked the wide hallways, high countertops and general open feel to the floor-plans.  Lastly, I liked the two-story designs and large garage spaces.

There was only one negative; the bathroom sinks were good looking but not functional.  The small “bowl” sinks sat on top of the counters and all I can think about is water going all over the place and what a pain to clean. 

The development is aggressivelly priced for the immediate neighborhood and even though the homes are located within the Los Altos School District (Springer Elementary, Blach Intermediate, Mountain View High), it might be hard to justify (financially) buying one of these homes and making it pencil out. 

For example, one could buy a home in Los Altos, remodel and expand and be close to the asking price of the larger homes.  However, one would have a Los Altos address and Los Altos sized lots which command higher prices and still have ability for faster appreciation. 

I try to advise my clients into rethink buying the highest priced home in any neighborhood.  Why?, one may ask!  Because the values of a lower priced neighborhood typically drive down the value of a higher priced home within that neighborhood.  This is the case with Satake Estates.  They are the highest priced homes in Mountain View and the surrounding neighborhood(s) are likely to have a downward pull on home values within the Satake Estate’s neighborhood.  The next closest neighborhood in price, schools etc. would be Gest Ranch and homes in this neighborhood have recently sold under $1,300,000.

All in all, I liked what I saw.  If one desires a “new” home with great schools, this may be the place for you.  As the Summerhill Homes marketing material states “We believe a great neighborhood starts with great schools and custom home features.”  This development certaining fits the bill.

However, I think that the Satake Estates homes may be priced above what our current real estate market may bare.   Check them out for yourself, they are located at 1156 Marilyn Drive (enter via the Springer Road side of Marilyn).  OR

If you would like me to act as your buyer’s agent (not affiliated with the seller or builder) and/or arrange a personal tour for you, please contact me directly at 650 917-4250.

May 2009 sales of single family homes in Los Altos were the strongest for the year.   However, when compared with historic May sales totals, the market continues to be unsettled. 

According to MLS Listings, Inc. data, for the month of May 2009, 22 single family homes closed escrow in Los Altos.   This is approximately a 50% decline over previous May’s sales totals.  May 2009 sales totals (in units) were the lowest (for the month of May) in the last 12 years.  The next lowest sales total was May 1998 with 24 sales for the month.  The graph below documents the sales numbers.

The chart below shows a 12 year history of the average sales price, the median sale price and the average list price to sales price ratio for single family homes that closed escrow in Los Altos in the month of May.   In short, prices are down!

Lastly, in addition to soft home prices, homes are taking longer to sell.  In May 2009, it took on average 60 days to sell a home in Los Altos.  The 12 year average for homes that sold in Los Altos in May was 27 days.  See details below.

It still remains a tight credit market with only one lender (B of A, retail) generating jumbo loans with 20% down.  Most lenders continue to require 25-30% cash down, which is problematic for today’s home buyer.  Should we get more options in the mortgage market, we may see activity increase. 

The Los Altos pet parade is an annual tradition in my household.  I have participated in over 15 pet parades with four different dogs (Patches, Hero, Sugar, and Bear).  Below is a little video taken at the 62 annual Los Altos Pet Parade.  Enjoy!  

Mountain View and Cupertino were recently named by Forbes magazine as two of the top towns in the U.S. in which to live well.  Teaming with Forbes,  ZoomProspector.com, a San Francisco-based consulting firm that specializes in corporate relocation ranked Mountain View fourth and Cupertino fifth. 

The study looked at “towns” with populations under 100,000 residents and ranked them according:

 ”to median income; average commute; distance to highways and airports; per capita venture capital funding; per capita number of small businesses, sole-proprietorships and start-ups; the percentage of the population with bachelor’s degrees or higher; the share of professional-level workers as defined by the Bureau of Labor Statistics (BLS); the percentage of young and educated people, or those 25-34 with a bachelor’s degree or higher; and the percentage of foreign-born residents with a bachelor’s degree or higher. We also measured the per capita number of restaurants, bars, museums and cultural institutions. “

Below is what Forbes said about Mountain View:

Population: 70,960
Location:South of Palo Alto on the Bay Area peninsula.
Median income: $88,736

Strongest categories: While there’s plenty more to Mountain View, the average commute time of 20 minutes is a rarely found pleasure of Bay Area living. Credit Mountain View’s standing as our most active venture capital markets, for an abundance of entrepreneurs running their own businesses, which in turn means they don’t have to commute to bigger cities like San Jose and San Francisco.

Drawbacks:There aren’t a lot of restaurants, music venues, museums or cultural attractions in Mountain View, though it isn’t too far for residents to trek 15 miles into San Jose.

Below is what Forbes said about Cupertino:

Population: 50,572
Location: South of San Francisco and west of San Jose.
Median income: $128,149

Strongest categories:A great start-up environment in the heart of the Silicon Valley and home to a number of semiconductor and technology companies, most notably Apple, Cupertino succeeds as a mix of a place for established businesses and small shops. It ranks in the top 10 for sole proprietors and small businesses per capita.

Drawbacks:While you certainly can’t complain about the warm climate, Cupertino simply didn’t do as well as the top cities on our list even in the categories considered its strengths.

In San Mateo County, Foster City was ranked 10th, Belmont 11th, and Hillsborough 12th.

The South Bay area has seen a huge uptick in short sale activity.  I’ve recently spent a fair amount of time with various clients looking at short sale real estate listings in Mountain View, Santa Clara and San Jose.

Buying a short sale property can be an excellent opportunity, but the process is full of headaches and there is a lot of competition.  Below are 5 reasons that buyers and their agent’s hate the short sale buying process.

(1)  Access to the property can be difficult.  If the homeowner is still living in the property, they sometimesalways make it inconvenient for a potential buyer to see the home.  Last week, I had pre-set appointments to show several homes and yet we were unable to get into seven of them.  The success ratio was about 1 in 3. 

Reasons for not gaining entry into these homes ranged from: the listing agent forgot to put the lock box out, the house key wasn’t in the lock box, the homeowner must be present during the appointment (however, they apparently forgot that they had set up appointments with 3 sets of buyers).  And a personal favorite, the home already has an offer approved by the bank.   Apparently, changing the MLS data to reflect the property sale wasn’t a good idea.

(2)  No interior photos of the home.  Like buyers of non-short sale properties, buyers of short sale properties want to preview homes online before driving out to take a look at them.  Is it asking to much for the agent, his/her assistant, his/her 12 year nephew to go out and take several interior shots of the home.  Show the good and the bad of the house.  You may get less showings, but I bet you’ll have a higher sales ratio.

Unofficially, I would say that over half of the short sale properties in San Jose do not have interior photos of the home.  Buyers especially like it when there are some creatively/artfully taken interior shots that somehow omit the plethora of problems with the home.  Problems like holes in the walls, missing/broken fixtures, broken windows and large piles of pungent dog droppings.  It seems that the bathrooms in short sale properties have become especially shy when it comes to real estate photography.

(3)  Lack of availability of the listing agent.  Apparently, once a listing agent has put a short sale property on the Multiple Listing Service with the obligatory “fax offers w/short sale addendum, pre-approval letter, and verification of funds,” the agent goes “Dark Ops,” never to be seen or heard from until the bank approves (if it is approved) the short sale.  One might have better odds at winning the lottery than getting a call back from a listing agent on a short sale property, especially on a home that is in demand. 

Short sale properties are in demand because the seller must price them below market in order to get an offer (s).  Without an offer (s), the bank won’t speak with the troubled homeowner about a short sale..

At least I can understand why the listing agent is so difficult to get in contact with (just a little).  There are many more buyers (for short sale properties) than there are properties and the agent may be in over their head.  The agent may have several properties and no assistance.  Over worked and underpaid.  However, agents clean out your cell and office voice mail and at least allow buyers/agents to leave a message.  Once you have the message, return the phone call.  That’s good business sense and that’s your job!

(4)  Web sites that purport to detail the status of a short sale properties are pitiful.  Many agents who “specialize” in marketing short sale properties think it is a good idea to create a web site that shows the status of a given short sale property. 

At first glance, this isn’t a bad idea.  Give potential buyers detailed instructions on how to submit an offer and “status updates” on where the home is in the sales process.  However, the information is only as good as the person who updates it.  If it is updated in real time, fabulous.  But most are updated every few days.  Information that is a few days old is worthless.  It makes you want to call the listing agent to get the pertinent information!  Now were back to problem of trying to get a hold of the listing agent.  It’s a vicious cycle!

(5)  Have a strategy for presenting offers and advise everyone about it.  Normally, the seller and their agent will look at all offers and choose the best one and then submit the best offer to the bank for approval.  However, I have found that there are no normal situations when it comes to offers on short sale properties.   

First off, many short sale properties hit the market as “sale pending.”  So much for that long drawn out sales process that everyone talks about.  Many agents submit offers to the bank as they come in.  Some may set a date and not accept any offers after that date.  The MLS instructions will read, ”Note: all offers have been submitted to the bank for review.  At this time, we are not accepting any other offers.”  I’m not too sure that this method doesn’t violate an agent’s duty to present “any and all” offers.  

Two things may happen when buyers get frustrated with the process of buying short sale properties:

(1) They walk away and don’t buy.

(2) Buyers submit offers on multiple properties, site unseen, hoping that they get one.  If the bank approves an offer, buyers will take their first look at the property.  There is a decent probability that the home will fall out of contract.  The end result may be that the seller may lose the house to foreclosure and the buyer moves on.  Not a good result for anyone involved. 

If the process were better, properties may sell for more and more properties would actually close escrow.  Instead, people are scrambling.

I was having a cup of coffee at Peets last weekend and this funky looking road bike caught my eye.  Check out the photo.  With the gnarly mesh-looking frame, the bike looked like it should have been in 1975 classic movie,  Rollerball.  Just imagine … James Caan ripping around an oval track on this thing!

It turns out it is the Ascend road bike created by Delta 7 Sports.  The bike which Delta 7 calls an “IsoTruss” based bike has tubing made of a combination of carbon fiber and Kevlar.  Delta 7 claims the frame is stronger than any bike in its weight class.  I picked the bike up and it was unbelievably light.

Being larger than the average road biker, I questioned whether the bike could withstand my girth.  I tend to bend wheels and such.  He claimed it could and went on to discuss the design of the bike. 

I also wondered whether the open weaving of the tubes would create more wind resistance than a traditional bike.  Apparently, in wind tunnel testing (with head winds), the Ascend road bike had slightly less drag than a comparable sized cylinder frame bike.  I forgot to ask, but I wonder if it was tested in cross winds and what the results were?

The Ascend road bike appears to be lighter and stronger than most road bikes, but at what cost?  I went to the web site and found that suggested retail price for the frame was $5,995. and for a completely built out bike, $10,995.

Kind of pricey, but if you want something light, rigid and strong, it might be the answer.  For now it appears that you can only order them online at http://www.delta7sports.com. 

It’s a great looking bike.  However, I think I would get more enjoyment out of my rides by losing a few LB’s and pocketing the money.  See you on the road and wear your helmet!

I recently had an inquiry on this Blog’s chat box asking about pricing in the Waverly Park neighborhood of Mountain View.  I thought I would give an expanded answer here.  Below is a map for the neighborhoods in question (MLS area 208, Waverly Park and the Martens-Carmelita neighborhoods).

View MLS Area 208, Waverly Park Mountain View CA in a larger map

Below are the first quarter statistics detailing the number of new listings and the number of sales of single family homes in the MLS area 208.  Sales are down slightly and listings are up (listing numbers are similar to those in 2001-2003). 

Prices continue to soften and inventory continues to build.   520 Chesley Avenue is an excellent “real life” example documenting the declines in Waverly Park home prices.

According to our local MLS provider, 520 Chesley Avenue was purchased by a local Realtor in March 2008 for $1,537,500.  On April 1st, 2009 it came on the market at $1,299,000.  It has been on the market for 19 days and is still an active listing.  If it were to sell today for it’s list price, it would be a 15% discount from it’s purchase price of a year ago. 

Below is a graph that shows the average sales price versus median sales price for the first quarter of each year (since 1998).

The graph shows a 20%+ drop in prices since the (apparent) high in 2007 (also a 15% drop from last year). 

The absorption rate of single family homes for sale in Waverly Park is approximately 6 months.  The absorption rate is how long it would take, in months, to sell the existing inventory available on the market at the current rate of sale.

What have we learned from all these pretty graphs and data?   It is still a strong Buyer’s market! 

Several weeks ago, I posted a video of a neighborhood house being demolished prior to it being rebuilt.  A large backhoe took about 75 minutes to tear down the home and a work crew took about 1 week, with multiple dump truck trips to the land fill, to remove the debris. 

More and more homeowners are using salvage companies to remove usable building materials.  Generally this method is more economical and reduces landfill waste.  Whole House Building Supply & Salvage (Whole House) in East Palo Alto is one such company.   

Another neighbor recently used Whole House for it’s home’s deconstruction and received a tax right off which almost covered the cost of the home’s demolition.  How does it work?

Whole House works with the non-profit East Palo Alto Council of Tenants Education Fund (EPACT).  The homeowner consults an appraiser to determine the value of the construction materials of the home.  The construction materials are then donated to EPACT. 

A crew from Whole House dismantles the home by hand, seeking the maximum re-use and recycling of materials from the building.   The items are then sold to the public at their warehouse at 1955 Pulgas Road in East Palo Alto.  Sometimes the sale occurs at the property.

Demolition generally takes longer than using a large backhoe and Whole House doesn’t remove all items from the property. Concrete, asphalt, and hazardous waste are some of the items that aren’t taken (see Whole House’s web site for a complete list of salvageable items).

If you’re looking for usable doors, pedestal sinks, windows, flooring etc., Whole House’s warehouse is a great place to look.  You also can get on their e-mail list which will alert you to their next home demolition sale.

According to our local Multiple Listing Service, there currently are four single family homes in Cupertino for sale that are listed as “short sale” properties. 

These homes are:

18840 Newsom Avenue, Cupertino

18900 Newsom Avenue, Cupertino

10210 Johnson Avenue, Cupertino

10187 Byrne Avenue, Cupertino

According to our local Multiple Listing Service, there currently are two “short sale” properties listed for sale in Los Altos Hills. 

These homes are:

13119 Estralita Place, Los Altos Hills

15411 Vista Serena, Los Altos Hills