May Silicon Valley Real Estate Market Update

This information summary and analysis uses MLS Listings Inc. (MLS) transactional data for April 2008. For single family homes in Santa Clara County, April saw a reduction of closings of 26% from April 2007. There were 653 closings in the month with 1124 initiated sales (accepted offers) that indicates that closings in May will likely continue higher. This drop from last year occurred across the board in each of the counties I track closely: Santa Clara, San Mateo, Santa Cruz and Monterey. Both San Mateo and Santa Clara counties registered more sales than in March, in keeping with the normal seasonal uptrend towards Memorial Day. Santa Cruz and Monterey counties did increase from last month but only slightly. Closings in San Mateo County were 346 only an 11% decline from April 2007.


Inventory of available single family homes was 5,540, up from 5,303 last month and up from 3,378 in April 2007. This places Santa Clara County at an all-time high. San Mateo county is also at an all-time high of 1,717, up from 1,141 the same month a year ago. Both Santa Cruz and Monterey are near their all-time highs.


Days of Unsold Inventory (DUI) or the intersection of the inventory (supply) with the recent sales level (demand), shows Santa Clara County at 148, down from 173 last month but up sharply from 78 in April 2007. San Mateo County is at 122, up from 105 last month. Santa Cruz County has a DUI reading of 168, down sharply from 209 last month. Monterey County showed DUI at 197, also a sharp drop from 260 last month. Please remember that a lower figure is good here. Clearly, even with the drops in this indicator, these still are indicating a buyer's market condition as a reading of DUI of 90 or above depicts. For comparison, a seller's market will have a DUI of less than 45 and a balanced market will have a DUI between the two. Keep in mind that these are county-wide averages. The wider area you measure, the statistics are less reliable as a decision tool and also that there is often an incredible variation between those areas experiencing terrible market conditions compared to those at virtually the other extreme. As I've mentioned, real estate is local (down to the neighborhood level in some cases) and market conditions can vary within each county and even within cities by a large amount. For instance, within Santa Clara County, Los Altos and Palo Alto have the best market climates in the county with a DUI reading of 59, down from 60 last month, while Morgan Hill, San Martin and Gilroy have the worst reading of 245. The following is a ranking of selected Santa Clara County cities or areas with their current DUI readings and last month's calculation in parentheses. Even though there are a lot of "improving" notations made, these areas are still in what we call a "buyer's market" and have poor market climates. Just some markets are much better off than others.

• Los Altos, Mountain View, Palo Alto - 59 (last month - 60) - improving
  
• Cupertino - 54 (62) - improving
• Almaden Valley - 90 (85) - worse
• Sunnyvale - 75 (86) - improving
• Cambrian - 136 (88) - worse
• Campbell - 128 (94) - worse
• Saratoga - 145 (96) - worse
• Blossom Valley - 107 (125) - improving
• Santa Clara - 109 (120) - improving
• Milpitas - 120 (138) - improving
• Willow Glen - 148 (151) - improving
• North Valley - 104 (152) - improving
• Evergreen - 138 (152) - improving
• Downtown SJ - 176 (178) - improving
• Los Gatos - 120 (185) - improving
• Santa Teresa - 96 (210) - improving
• East Valley - 180 (236) - improving
• South SJ - 169 (250) - improving
• Gilroy, Morgan Hill, San Martin - 245 (298) - improving
• Los Gatos Mountains - 223 (356) - improving

The median price for single family homes in Santa Clara County was $768,000 down from $868,406 the same month a year ago which was our record high month and down from $799,000 in December. This is a decline of 11.6% from that record high. There is still an emphasis (overweighted percentage) of higher-priced homes sold as opposed to the more affordable homes but not as pronounced as last year when the sub-prime loan problems started in February 2007. The bottom 10% median selling price was $461,000 in April and showed a decline of 28.6% from the same month a year ago and the top 10% median price was $1,736,000 a drop of only 5.7% from April 2007. The northwest quadrant of the county including Palo Alto, Mountain View, Los Altos, Cupertino and parts of Sunnyvale (zip 94087) are at or near their all time highs while county-wide medians are down. Median prices for single family homes by county in April 2008 were:

• Santa Clara County - $768,000 (April 2007 was $868,405 or a decline of 11.6%)
• San Mateo County - $875,000 (April 2007 $976,000 or a decrease of 10.3%)
  
• Santa Cruz County - $683,500 (now below their April 2005 median price of $715,000)
• Monterey County - $405,000 (record high $799,500 set in August 2007 or a decrease of 49.3%)
  

The price range with the lowest DUI is called the "sweet-spot" of the market. For April it remains the $1,000,000 to $2,500,000 range. Next comes the $750,000 to $1,000,000 range and then the under $600,000 range. For condo/townhouses the picture is similar but slightly better with a DUI reading of 165, down from 177 last month. Potential real estate investment buyers take heart as the DUI picture has continued to post poor numbers and stands at 447, even though it did improve from last month. This means under the current rate of sales of multi-unit properties, there are about 1.22 years of unsold supply! The "sweet-spot" of the multi-unit or investor class is also the range $1,000,000 to $2,500,000. Lenders have substantially increased the borrower's minimum requirements to obtain a loan for investor property purchases AND many are not allowing the use of home equity credit lines for their down payments so I forecast that this area will remain weak. This remains an area of opportunity for smart, long term investors with adequate down payments. Rental rates continue to increase and are estimated to increase 10-12% in 2008.

Why is following all these trends and statistics worth it? I believe that informed clients make the best decisions. The research and staying on top of the changes to market conditions allows me to properly advise my clients on the appropriate strategy to employ so that they make the best decision possible. This is one area I part company from other real estate agents as only a relative handful of agents invest the time to study the trends. Most other agents spend the bulk of their time working on self-promotion ads for newspapers, magazines and stuff that fill your mailbox with either "brag" cards or "spray and pray" cards. Beware the various media sound-bites or headlines as they generalize too much (i.e., the national real estate market, the Bay Area real estate market, etc.). If you generalize too much you lose the fineness of being able to use current information strategically to make better decisions.

If you have any comments or questions, please feel free to post them here or send me an email at tom.mcevoy@remax.net.

Thanks for reading!

Not All Bad News!

On the front page of the Business + Technology section for May 6, 2008, San Jose Mercury News real estate reporter, Sue McAllister, published an article "More Bad News!". The gist of the article was that, according to Zillow, San Jose area home prices fell about 8% from a year ago. What's more, half of the 2006 home buyers owe more than their homes are worth.

In the article was a chart from Zillow that portrayed each Santa Clara County zip code and the range of their median price change from the first quarter of 2007. Now the chart was colorful to be sure but the differences to me were striking. Here are my thoughts on the article/released data:

• To be sure, some zip codes, most notably in the north part of Sunnyvale, East portion of San Jose and Gilroy are experiencing a major downward movement in prices and are listed in the "down 13-19%" category.
• Some zip codes are moving the other way! These are located in Palo Alto, Mountain View, Los Altos, Sunnyvale, Cupertino, Saratoga and a portion of Los Gatos. These are categorized as "up 1-10%" from a year ago.
• There are several zip codes that weren't listed in any price change category due to no data. Most notably these are located in Palo Alto where the market has been hot. Who knows, perhaps Zillow didn't want to release that zip codes 94301, 94304 and 94305 increased more than 10%. I found it quite interesting, though, that an active market area in the above zip codes had "no data recorded".
• To me, there is an issue with one-size-fits-all headlines as they most often paint a picture with too broad of brush. Obviously, a homeowner who lives in in one of the zip codes experiencing an increase over last year would be scratching their head.
  

To the best of my chart interpretation, I've listed each zip code and the corresponding median price change category. For more information, please visit www.mercurynews.com or view the full report at www.zillow.com.

Santa Clara County Zip Codes
Zip Code		Median Price Change
94022		Up 1-10%
94024		Up 1-10%
94035		ND
94040		Up 1-10%
94041		ND
94043		Down 3-7%
94085		Down 13-19%
94086		Down 7-13%
94087		Up 1-10%
94089		Down 13-19%
94301		ND
94304		ND
94305		ND
94306		Up 1-10%
95002		ND
95008		Down 7-13%
95013		ND
95014		Up 1-10%
95030		Up 1-10%
95032		Down 1-3%
95033		ND
95035		Down 7-13%
95037		Down 7-13%
95046		Down 13-19%
95050		Down 7-13%
95051		Down 3-7%
95054		Down 7-13%
95070		Up 1-10%
95110		Down 7-13%
95111		Down 13-19%
95112		Down 7-13%
95113		Down 7-13%
95116		Down 13-19%
95117		Down 3-7%
95118		Down 7-13%
95119		Down 7-13%
95120		Down 3-7%
95121		Down 13-19%
95122		Down 13-19%
95123		Down 13-19%
95124		Down 3-7%
95125		Down 3-7%
95126		Down 7-13%
95127		Down 13-19%
95128		Down 3-7%
95129		Up 1-10%
95130		Down 1-3%
95131		Down 7-13%
95132		Down 7-13%
95133		Down 7-13%
95134		Down 7-13%
95135		Down 7-13%
95136		Down 7-13%
95138		Down 3-7%
95139		Down 7-13%
95141		ND
95148		Down 7-13%
		ND = no data

In researching the current market value for either buyers or sellers, I proceed to review all recent sales as well as those homes that have sold but not closed escrow (sale pending). Current list prices are not as relevant due to the fact that some sellers have "sticky" prices that are obviously too high for their particular market. The outcome of my research is what I call the home's "relevant range" or the value most likely to produce a transaction in a reasonable length of time. By the way, my research to obtain the relevant range is normally done on a finer level and even at a neighborhood level as entire zip codes could mask what is occurring in a particular part of a zip code.

If you have any questions or feedback, please leave me a comment or send me an email. Thanks for reading!

Spring Cleaning? Include the Prevention of ID Theft

Since tax season is done, I usually clean up files that have been accumulating this past year to make room it seems for more paper! To get a fix on what I needed to keep, I turned to the Better Business Bureau (BBB) for advice.

In the careful handling of personal paperwork, I invested in a crosscut shredder for small to medium sized jobs. It also has a handy slot to thoroughly cut up credit cards. I've learned that you can't do all the shredding at once as you'll burn the motor! If you've procrastinated a long while and have a larger job, please give me a call or send me an email and I'll refer you to a reputable area firm that will either shred at your place of business or home.

Here is an article from the BBB publication "The Connection" that contains handy tips for all sorts of different items...

Spring-Cleaning? Prevent ID Theft by Following BBB Advice on What to Keep and What to Shred

Spring is here and now is a good time to rid the house of paperwork that has accumulated over the past year. Better Business Bureau (BBB) warns that, when it comes to reviewing and cleaning out financial records, failing to shred sensitive documents can put everyone at risk of ID theft.

Last year alone 8.1 million Americans became victims of ID theft resulting in the loss of $45 billion according to a 2008 report from Javelin Strategy and Research. The report notes that, contrary to popular belief, only 12 percent of ID theft is perpetrated online. The vast majority of ID theft occurs when the thief has direct contact with the victim’s personal information such as through a stolen or lost wallet, or by rifling through the victim’s mailbox or trash.

“When people think of ID theft they almost immediately focus on hackers and online security,” said Sharon D'Amico, BBB president. “But the truth is most ID theft happens when people have failed to secure or properly destroy important financial information including paper documents, IDs, and credit cards.”

Properly destroying sensitive personal and financial documents is a key step in ID theft prevention and BBB offers the following guide on when to shred the following documents:

Canceled checks

Canceled checks with no long-term significance for tax or other purposes can be destroyed after one year. However, canceled checks that support tax returns, such as charitable contributions or tax payments, should be held for at least seven years – long enough to cover the six-year tax assessment period. BBB advises that consumers indefinitely keep any canceled checks and related receipts or documents for a home purchase or sale, renovations or other improvements to owned property, and non-deductible contributions to an Individual Retirement Account.

Deposit, ATM, credit card and debit card receipts

Consumers should save credit, debit, and ATM receipts until the transaction appears on their statement and they have verified that the information is accurate.

Credit card and bank account statements

Credit card and bank account statements with no tax or other long-term significance can be discarded after a year; remaining statements should be kept for up to seven years. If a consumer receives a detailed annual statement, they should keep it and shred the corresponding monthly statements.

Credit card contracts and other loan agreements

Credit card contracts and loan agreements should be kept for as long as the account is active in case the consumer has a dispute with their lender over the terms of the contract.

Documentation of a purchase or sale of stocks, bonds and other investments

Investors should retain documentation of a purchase or sale for as long as they own the investment and then seven years beyond that time. Monthly retirement and monthly investment account statements can be shredded annually after being reconciled with the year-end statement.

Paycheck Stubs

Paycheck stubs can be shredded yearly after the income has been reconciled with a W-2 or other tax forms.

Utility or monthly bills

Monthly bills should be shredded the year after being received by the consumer. This way, if it’s a power bill, for example, consumers can compare this month’s bill to last year’s bill for any major changes before shredding it.

Shred-it Checklist - Don’t just toss it, shred it!

• Documents that include Social Security numbers, birthdates, PIN numbers or passwords
• Banking documents and other financial information
• Leases, contracts or letters that include signatures
• Pre-approved credit card applications
• Medical or dental bills
• Travel itineraries
• Used airline tickets

For more trustworthy advice from BBB on preventing ID theft and for guidance on what to do if your identity is stolen, go to www.bbb.org.

As a Realtor with a Seniors Real Estate Specialist designation (SRES), I am especially sensitive to seniors but understand that virtually anyone can become a victim of identity theft. The above contents were used with permission of the Better Business Bureau at 408-278-7400. Tom McEvoy, Realtor is an Accredited Business (member) of the Better Business Bureau.

Thanks for reading!

Silicon Valley Community Calendar -- May

Here is an update to some of the events and on-going programs you might want to put on your calendar for May. These are selections from Sunnyvale, Cupertino, Mountain View, Santa Clara and other communities in Silicon Valley.

• May 1: SNAIL Neighborhood Association, monthly, 7:00pm
• May 2: Heritage District Neighborhood Association, 7:30pm
• May 3: California Theatre Center presents "The Emperor and the Nightingale", 11:00am www.ctcinc.org
• May 3: California Theatre Center presents "Fame", 8:00pm, 408-245-2978
• May 3, 10, 17, 24, 31: Sunnyvale Farmer's Market, 9:00am
• May 4, 11, 18, 25: Fair Oaks Toastmasters, 11:30am
• May 4: Sunnyvale Community Players presents "Fame", 8:00pm, www.sunnyvaleplayers.org
• May 5: Sunnyvale Board of Library Trustees Meeting, 7:00pm
• May 6, 13: Sunnyvale City Council Meeting, 7:00pm
• May 7, 14, 21, 28: Kiwanis Club of Silicon Valley, 7:20am
• May 7: American Association of Retired Persons (AARP), monthly meeting, 1:30pm
• May 7: Heritage Preservation Commission Meeting, 7:00pm
• May 8: Wake Up Sunnyvale!, Sunnyvale Chamber of Commerce (408-736-4971) Breakfast, 7:29am, not too early for me so if you want an invite, give me a call at 408-830-0092
• May 10: Sunnyvale Health & Safety Fair, Columbia Neighborhood Center, 785 Morse Avenue, 11:00am, 408-523-8150 ext. 19
• May 12, 30: Sunnyvale Planning Commission Meeting, 8:00pm
• May 12: San Miguel Neighbors Association, general meeting, 7:00pm
• May 14: Sunnyvale Parks and Recreation Commission Meeting, 7:00pm
• May 14: Lakewood Village Neighborhood Association, monthly, 7:00pm
• May 15: Sunnyvale Bicycle & Pedestrian Advisory Commission Meeting, 6:30pm
• May 16: Sunnyvale Theatre, Life and the Story Art Lecture, 7:30pm, 408-864-4060
• May 17: Compost Workshop, 10:00am
• May 17: National River Clean Up Day, 8:30am, 408-730-7274
• May 17: Hands on the Arts, Sunnyvale Community Center, 10:00am, 408-730-7350
• May 17: Household Hazardous Waste Drop-Off, 8:00am-1:00pm, Sunnyvale residents
• May 19, 26: California Theatre Center presents, "Fame", 8:00pm
• May 19: Future Business Leaders Showcase, Sunnyvale Public Library, 5:00pm, 408-730-7300
• May 19: Sunnyvale Personnel Board Meeting, 5:00pm
• May 21: Sunnyvale Arts Commission Meeting, 7:00pm
• May 22: Sunnyvale Chamber of Commerce (408-736-4971) Business Mixer, 5:00pm, give me a call at 408-830-0092 if you want an invite from me
• May 23: City Council Budget Workshop, 8:00am, Council Chambers
• May 26: Memorial Day (observed)
• May 28: Sunnyvale Housing and Human Services Commission Meeting, 7:00pm
• May 28: Glaucoma Support Group of the South Bay, 6:30pm
• May 28: For Your Health, Community Lecture, Mother's Day Special, Matters of the Heart, 7:00pm, Sunnyvale City Council Chambers, 408-523-3295
• May 29: Community Forum on a Branch Library, 6:30pm, Sunnyvale Public Library

• Mondays, Wednesdays, Fridays: Computer and E-Waste Recycling, 8:00am-4:30pm, Cupertino proof of residency
• Every Wednesday: South Bay Community Orchestra, Noon-1:00pm for strings, 1:00-4:00pm for full orchestra
• Every Saturday: Family Astronomy Evenings, De Anza College Minolta Planetarium, 6:00pm, 7:00pm or 8:00pm
  

• Every Second Monday of Month: Fine Arts League of Cupertino, Quinlan Community Center, 7:00pm
  

Thanks for reading!

Real Eats -- Fontana's Italian Restaurant, Cupertino, CA

On a recent date night, my wife and I decided to visit another fine restaurant. We do this at least once each month where we choose a nice place to enjoy the food and ambiance and this time, we chose Fontana's Italian Restaurant on Stevens Creek in Cupertino.

While we've been to Fontana's a number of times over many years both on our date nights as well as with our two sons, we have never been disappointed.

We started things off by sharing their Caprese salad which was made with alternating fresh, sliced red-ripe tomato, fresh mozzerella cheese, pesto, roasted red pepper and capers. This was drizzled over with olive oil. Now we love caesar salads but this to us is our favorite. It was marvelous.

Our dinner entrees were outstandingly presented. We both ordered (first time in a long time we've both ordered the same entree) one of their specialties -- Scalone Indorati. It had a pounded, combined scallop and Abalone steak which was sauteed and served with a lemon-butter sauce. Included were ample sides of delicious garlic mashed potatoes and a vegetable mix. My wife loved it! Oh, so did I!

I chose a glass of Italian white wine to accompany my dinner which went well with the entree.

For dessert, we split a profiteroles al cioccolato which were a few small cream puffs willed with a vanilla custard topped with warm chocolate and caramel sauces. It was sweet as you might have guessed but the actual cream puffs were a little chewier than we had expected. Overall, we gave this a passing grade.

Apart from excellent food and comfortable surroundings, we were treated well by an attentive but not overbearing server. Till we return.


Fontana's Italian Restaurant
20840 Stevens Creek Boulevard (across the street from Whole Foods)
Cupertino, CA 95014
(408) 725-0188
http://www.fontanasitalian.com/

Give me a call at 408-830-0092, if you'd like to find out how you can qualify for an invite to my annual Client Appreciation Party so I can wine and dine you and a guest.


Thanks for reading!

Kmac Helps Tulo

My son, Kevin, who's nickname is Kmac, plays for the Fremont High School (Sunnyvale, CA) varsity baseball team.

Last Thursday, in a first-ever role as designated hitter (DH), Kmac went two for three, including two doubles and a sacrifice in four plate appearances. Not only that, his second double was of the walk-off two-run variety that launched the Fremont Firebirds over the Saratoga High Falcons by a score of 6-5.

Here's how it went down...

Going into the bottom of the seventh inning (high schools play seven innings in regulation), the score read Saratoga 5, Fremont 4. The Firebirds managed to load the bases and with two outs recorded, Kmac was up to bat. On a full count (3 balls, 2 strikes), Kmac hit a towering fly ball to deep left field. To set the stage a bit more, the Falcon's outfielders were playing a little closer in than normal because the potential tying and winning runs were on the bases. Anyway, the left fielder couldn't quite get to the ball allowing Kmac to steam into second base with the game-winning hit. His teammate, Tyler, who goes by the nickname, Tulo, was the pitcher of record for the Firebirds and with Kmac's game winning hit was able to notch the win. Kmac was greeted by his whole team and coaches in celebration of the victory.

For the rest of the story... Tulo's older brother, Troy Tulowitzki, plays shortstop for the Colorado Rockies, on the very same day was in the middle of a long duel of sorts with the San Diego Padres. The older Tulo, hit the game winning hit (a double -- how coincidental) to beat the Padres in the 22nd inning!

Congratulations to the Rockies, the Firebirds, both Tulo's and especially my son, Kmac!

Thanks for reading!

Median Price Comparison Tables for Silicon Valley

Here are some calculations I made comparing March 2008 with March 2007 median prices for both single family and condos and townhouses. These data are from the MLSListings statistics of actual transactions in both months. Newspaper articles utilize data from DataQuick, a firm that compiles property transfer information for it's subscribers. The problem with DataQuick information is that they first combine all transfers of single family homes, condos and townhouses, mobile homes. In addition, DataQuick includes transfers that are NOT sales like transfers in a divorce and family transfers where parents transfer property to their children where there is no money changing hands. For example, in a divorce a court may order a spouse to transfer a home to the other spouse for $120,000 when the market value of the home was closer to $800,000. In a family transfer where there is no property tax reassessment, these values are recorded at a zero value. These "transactions" or transfers are part of DataQuick's database and are counted as $120,000 and $0, respectively! DataQuick provides subscribers like the San Jose Mercury News this information. MLSListings, on the other hand, captures only actual sales transactions that are based on a buyer willing to step up and put money toward the purchase of a home -- a far more reliable an indicator of market value.

In the tables below, notice the wide variances between the types of properties as well as within the different counties. Another interesting comparison is the difference between the percentage changes from the lowest 10% and the highest 10%, especially in Santa Clara and San Mateo counties but also evident in Santa Cruz and Monterey counties.

Single Family - Median Prices	Santa Clara	San Mateo	Santa Cruz	Monterey
Lowest 10%	-20.2%	-10.1%	-22.9%	-46.1%
Median 50%	-1.8%	+0.6%	-14.0%	-35.7%
Highest 10%	-4.0%	+15.1%	-11.2%	-25.6%

Condo/Townhouse Median Prices	Santa Clara	San Mateo	Santa Cruz	Monterey
Lowest 10%	-16.8%	-3.1%	-29.8%	-25.5%
Median 50%	-1.9%	-6.9%	-11.2%	-5.8%
Highest 10%	+18.5%	+6.4%	-18.0%	-21.9%

For my latest market update report please refer to http://behindtherealestatescenes.blogspot.com/2008/04/april-silicon-valley-real-estate-market.html

Please let me know if you have any questions or have comments.

Thanks for reading!