Here is an update to some of the events and on-going programs you might want to put on your calendar for December. Most of these are selections from Sunnyvale and Cupertino but other communities in Silicon Valley may be included (e.g., Mountain View, Santa Clara, Palo Alto).
•December 1-6: California Theater Center presents – “The Elves and the Shoemaker”, 408-245-2978 or www.ctcinc.org
•December 1: Board of Library Sunnyvale Trustee’s Meeting, 7pm
•December 2, 9, 16: Sunnyvale City Council Meeting, 7pm
•December 2: Oregon Shakespeare Festival, Sunnyvale Public Library, 7pm
•December 3, 10, 17: Kiwanis Club of Silicon Valley, 7:20am, 408-774-0609
•December 3: American Association of Retired Persons (AARP), monthly meeting, 1:30pm, 408-296-3805
•December 3: Silicon Valley Toastmasters, 5pm
•December 4: Sunnyvale Community Services Auction, 725 Kifer Road, 5pm, 408-738-4321
•December 4: SNAIL Neighborhood Association, monthly, 7pm
•December 5: Holiday Luncheon, Senior Center, 550 E. Remington Drive, $11 for members, $13 for non-members, 408-730-7360, Noon – 1pm
•December 5: Heritage District Neighborhood Association Monthly Meeting, 7pm
•December 6, 13, 20, 27: Farmers Market, 510-745-7100
•December 7, 14, 21, 28: Fair Oaks Toastmasters, 11:30am
•December 8-20: California Theater Center presents – “Madeline’s Christmas”, 408-245-2978 or www.ctcinc.org
•December 8: San Miguel Neighbors Association, General Meeting, 7pm
•December 8, 22: Sunnyvale Planning Commission Meeting, 8pm
•December 10: Sunnyvale Parks and Recreation Commission Meeting, 7pm
•December 10: Lakewood Village Neighborhood Association, monthly, 7pm
•December 13: Breakfast with Santa, Senior Center, 8-10am or 11am-1pm, 408-730-7360
•December 13: An Evening of Cultural Arts presents “Kugelplex – Klezmers Coming to Town”, 8pm, 408-733-6611
•December 15: Personnel Board Meeting, Sunnyvale, 5pm
•December 17: Arts Commission Meeting, 7pm
•December 18: Sunnyvale Bicycle & Pedestrian Advisory Commission Meeting, 6:30pm
•Mondays, Wednesdays, Fridays: Computer and E-Waste Recycling, 8:00am-4:30pm, Cupertino proof of residency
•Every Wednesday: Silicon Valley Toastmasters, 5pm, 260 S. Sunnyvale Avenue, Suite 4, Sunnyvale, 866-387-4086
•Every Saturday: Family Astronomy Evenings, De Anza College Planetarium, 6:00pm, 7:00pm or 8:00pm, Cupertino
•Every Second Monday of Month: Fine Arts League of Cupertino, Quinlan Community Center, 7:00pm
Thanks for reading!
Tuesday, November 25, 2008
Cost vs. Value Report - 2008
Remodeling Magazine, published by Hanley-Wood, LLC, Washington, D.C., has been publishing the "Cost vs. Value Report" annually for more than twenty years. The 2008 version compiles information for 79 markets, (up from 64 in past years) on 29 upscale and midrange home improvement projects estimated by HomeTech Information Systems (www.hometechonline.com), which publishes estimating software for professional remodelers.
What do the latest numbers have to say? Home prices have fallen from the summer of 2007 to the summer of 2008 (Cost vs. Value information complied during each summer) but that the value of improvements have fallen less which means that improvements continue to add incremental value. The national average percentage that homeowners can expect to recoup was 67.3% versus the high reached in 2005 of 86.7%. Higher cost estimates for projects coupled with lower resale prices have tipped the percentages to below 100% with minor exceptions. What I noticed in going through the report, with few exceptions, was that the percentage of cost recouped on upscale additions and remodels were generally lower than midrange additions and remodels. This stands to reason as many upscale remodels are not undertaken using an investment return mentality.
Repeated this year is an online source (requires registration) for free city reports. If interested, go to www.costvsvalue.com. A map on the site shows cost comparisons by region.
Here are samples of 2008 midrange projects for the Pacific Region along with its average percentage of cost recouped:
* Bathroom addition - 76%
* Deck addition (wood) - 97%
* Family room addition - 75%
* Master Suite addition - 74%
* Bathroom remodel - 76%
* Home office remodel - 65%
* Major kitchen remodel - 87%
* Minor kitchen remodel - 96% (one of the projects I have advised clients to consider)
* Roof replacement - 79% (may be needed for buyers to obtain fire insurance coverage)
* Siding replacement - 84%
* Windows replacement (vinyl) - 94%
Hope this information is of help to you as you decide on remodeling projects to either enhance the value of your home for immediate reselling or to enjoy the lifestyle benefits of the improvements and have no plans to sell. Please remember that not all remodeling projects will result in higher resale values. Many folks think that someone will want to pay $100,000 more for their remodeled home that costs them $50,000 to complete. Perhaps, but it depends upon on the project, the neighborhood, the likely market conditions upon completion, and other factors. If you are considering remodeling for a sale or just want to see what projects may cost and understand the process, I recommend reading the book "Remodel or Move?" by Dan Fritschen. His website at www.remodelormove.com has a remodel or move calculator to help you with your decision.
For more information and to view the entire Cost vs. Value Report online, please visit www.realtor.org/realtormag. If you want a professional opinion of how the market will react to your proposed project and as a way to save time, money and hassle, please contact me. I would provide you a market assessment of your contemplated remodeling project and if you want, a referral to a licensed trades-person who can provide free estimates or just to talk it over as you firm up your plans, please let me know. I would do this whether or not you would be doing the project for resale as I work exclusively by referral so regularly provide referrals to my clients to help them maintain or improve their homes. By the way, the only thing I get for a referral of this type is the satisfaction that you will be well-cared for by a licensed professional.
Thanks for reading!
What do the latest numbers have to say? Home prices have fallen from the summer of 2007 to the summer of 2008 (Cost vs. Value information complied during each summer) but that the value of improvements have fallen less which means that improvements continue to add incremental value. The national average percentage that homeowners can expect to recoup was 67.3% versus the high reached in 2005 of 86.7%. Higher cost estimates for projects coupled with lower resale prices have tipped the percentages to below 100% with minor exceptions. What I noticed in going through the report, with few exceptions, was that the percentage of cost recouped on upscale additions and remodels were generally lower than midrange additions and remodels. This stands to reason as many upscale remodels are not undertaken using an investment return mentality.
Repeated this year is an online source (requires registration) for free city reports. If interested, go to www.costvsvalue.com. A map on the site shows cost comparisons by region.
Here are samples of 2008 midrange projects for the Pacific Region along with its average percentage of cost recouped:
* Bathroom addition - 76%
* Deck addition (wood) - 97%
* Family room addition - 75%
* Master Suite addition - 74%
* Bathroom remodel - 76%
* Home office remodel - 65%
* Major kitchen remodel - 87%
* Minor kitchen remodel - 96% (one of the projects I have advised clients to consider)
* Roof replacement - 79% (may be needed for buyers to obtain fire insurance coverage)
* Siding replacement - 84%
* Windows replacement (vinyl) - 94%
Hope this information is of help to you as you decide on remodeling projects to either enhance the value of your home for immediate reselling or to enjoy the lifestyle benefits of the improvements and have no plans to sell. Please remember that not all remodeling projects will result in higher resale values. Many folks think that someone will want to pay $100,000 more for their remodeled home that costs them $50,000 to complete. Perhaps, but it depends upon on the project, the neighborhood, the likely market conditions upon completion, and other factors. If you are considering remodeling for a sale or just want to see what projects may cost and understand the process, I recommend reading the book "Remodel or Move?" by Dan Fritschen. His website at www.remodelormove.com has a remodel or move calculator to help you with your decision.
For more information and to view the entire Cost vs. Value Report online, please visit www.realtor.org/realtormag. If you want a professional opinion of how the market will react to your proposed project and as a way to save time, money and hassle, please contact me. I would provide you a market assessment of your contemplated remodeling project and if you want, a referral to a licensed trades-person who can provide free estimates or just to talk it over as you firm up your plans, please let me know. I would do this whether or not you would be doing the project for resale as I work exclusively by referral so regularly provide referrals to my clients to help them maintain or improve their homes. By the way, the only thing I get for a referral of this type is the satisfaction that you will be well-cared for by a licensed professional.
Thanks for reading!
Friday, November 14, 2008
November Silicon Valley Real Estate Market Update
This information summary and analysis uses MLS Listings Inc. (MLS) transactional data for October 2008. For single family homes in Santa Clara County, October saw an increase in closings of 41% from October 2007; closings of condos/townhouses saw an increase of 20% in the same period. There were 809 closings in the month with 1,073 initiated sales (accepted offers). As you know, not all accepted offers result in a closing. Closings of single family homes also increased in San Mateo County by 26%.
Inventory of available single family homes in Santa Clara County was 4,988, up a few from last month but up 5% from the same month last year. San Mateo County inventory increased by one to 1,654, but dropped 1% from October 2007. In Santa Cruz County, inventory trend has been slowly decreasing. Monterey County shows a steady trend toward lower inventory levels.
Days of Unsold Inventory (DUI) or the intersection of the inventory (supply) with the recent sales level (demand), shows Santa Clara County at 140 for single family residences and 163 for condos/townhouses, modest increases from last month. San Mateo County is at 142 and 167, respectively. Santa Cruz County has a DUI reading of 193 and 172, respectively. Monterey County showed DUI at 135 and 197, respectively, and now sports the best DUI for single family homes of the four counties. Please remember that a lower figure is good here and that a declining measure represents an improvement in the market. Clearly, these levels continue to indicate a buyer's market condition as a reading of DUI of 90 or above depicts. As a 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 for any specific area or neighborhood and also that there is often an incredible variation between those areas experiencing terrible market conditions compared to those that are stable. That's why I've mentioned that those statistics presented in newspaper articles are so general as to not be of use to an individual making a decision on a home in a particular area. 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.
The median price for single family homes in Santa Clara County was $550,000, down 36.2% from $861,500 the same month a year ago and down 31.2% from the December 2007 reading of $799,000. These sudden changes in the median prices from month to month show that there are many more lower-priced homes that closed, thus causing the drop in median and the mix of homes shifted from the higher-priced homes to the more affordable homes. Recently, the stock market crash has caused a major pause in the real estate market but only in the higher priced areas. The more affordable priced areas haven't been affected. The bottom 10% median selling price (10th percentile) was $329,600 in October and showed a decline of 44.6% from the same month a year ago and the top 10% median price (90th percentile) was $1,200,000, saw a drop of 31.2% from October 2007.
The price range with the lowest DUI reading we call the "sweet-spot" of the market for single family homes. For October, it was the $450,000 and under range with a DUI reading of 84. Next comes the $450,000 to $600,000 range with a DUI reading of 121. For condo/townhouses the picture looks similar with the sweet-spot being the $300,000 and under range with a DUI reading of 105.
For real estate investment buyers, the DUI for residential investment property has dramatically decreased and in now at 259 versus 316 last month. This means under the current rate of sales of multi-unit properties, there is about 8.5 months of unsold supply versus 11 last month! This remains a prime period for negotiation with a buyer whit preapproved financing and adequate investment funds. As mentioned before, many lenders have substantially increased the borrower's minimum requirements to obtain a loan for investment 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 and characterized as a buyer's market. This remains an area of opportunity for smart, long term investors with adequate down payments that have an appropriate long-term investment horizon. Matter of fact, we now see much better rates of return on rentals than previous. Rental vacancies are relatively low and steady. This year, rents are estimated to increase 10-12% in Santa Clara County.
Why is following all these trends and statistics worth it? I believe that informed clients make the best decisions -- both buyers and sellers. 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 whether they decide to buy or sell. This is an example of how I invest my time to benefit my clients. Most other agents spend the bulk of their time working on self-promotion ads for newspapers, magazines and send you 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're curious about market conditions in a specific area, please don't hesitate to give me a call. With the credit situation we're experiencing, banks will be more aggressive in approving loan modifications which will slow down foreclosure activity. However, not all borrowers will qualify for a loan mod and so there will continue to be some bank-owned properties available in the future. I have access to four major sources of bank-owned homes so if you'd like to explore this area, please give me a call to set up an appointment.
Your comments are welcome! Please feel free to post them here or send me an email.
Thanks for reading!
Inventory of available single family homes in Santa Clara County was 4,988, up a few from last month but up 5% from the same month last year. San Mateo County inventory increased by one to 1,654, but dropped 1% from October 2007. In Santa Cruz County, inventory trend has been slowly decreasing. Monterey County shows a steady trend toward lower inventory levels.
Days of Unsold Inventory (DUI) or the intersection of the inventory (supply) with the recent sales level (demand), shows Santa Clara County at 140 for single family residences and 163 for condos/townhouses, modest increases from last month. San Mateo County is at 142 and 167, respectively. Santa Cruz County has a DUI reading of 193 and 172, respectively. Monterey County showed DUI at 135 and 197, respectively, and now sports the best DUI for single family homes of the four counties. Please remember that a lower figure is good here and that a declining measure represents an improvement in the market. Clearly, these levels continue to indicate a buyer's market condition as a reading of DUI of 90 or above depicts. As a 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 for any specific area or neighborhood and also that there is often an incredible variation between those areas experiencing terrible market conditions compared to those that are stable. That's why I've mentioned that those statistics presented in newspaper articles are so general as to not be of use to an individual making a decision on a home in a particular area. 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.
The median price for single family homes in Santa Clara County was $550,000, down 36.2% from $861,500 the same month a year ago and down 31.2% from the December 2007 reading of $799,000. These sudden changes in the median prices from month to month show that there are many more lower-priced homes that closed, thus causing the drop in median and the mix of homes shifted from the higher-priced homes to the more affordable homes. Recently, the stock market crash has caused a major pause in the real estate market but only in the higher priced areas. The more affordable priced areas haven't been affected. The bottom 10% median selling price (10th percentile) was $329,600 in October and showed a decline of 44.6% from the same month a year ago and the top 10% median price (90th percentile) was $1,200,000, saw a drop of 31.2% from October 2007.
The price range with the lowest DUI reading we call the "sweet-spot" of the market for single family homes. For October, it was the $450,000 and under range with a DUI reading of 84. Next comes the $450,000 to $600,000 range with a DUI reading of 121. For condo/townhouses the picture looks similar with the sweet-spot being the $300,000 and under range with a DUI reading of 105.
For real estate investment buyers, the DUI for residential investment property has dramatically decreased and in now at 259 versus 316 last month. This means under the current rate of sales of multi-unit properties, there is about 8.5 months of unsold supply versus 11 last month! This remains a prime period for negotiation with a buyer whit preapproved financing and adequate investment funds. As mentioned before, many lenders have substantially increased the borrower's minimum requirements to obtain a loan for investment 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 and characterized as a buyer's market. This remains an area of opportunity for smart, long term investors with adequate down payments that have an appropriate long-term investment horizon. Matter of fact, we now see much better rates of return on rentals than previous. Rental vacancies are relatively low and steady. This year, rents are estimated to increase 10-12% in Santa Clara County.
Why is following all these trends and statistics worth it? I believe that informed clients make the best decisions -- both buyers and sellers. 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 whether they decide to buy or sell. This is an example of how I invest my time to benefit my clients. Most other agents spend the bulk of their time working on self-promotion ads for newspapers, magazines and send you 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're curious about market conditions in a specific area, please don't hesitate to give me a call. With the credit situation we're experiencing, banks will be more aggressive in approving loan modifications which will slow down foreclosure activity. However, not all borrowers will qualify for a loan mod and so there will continue to be some bank-owned properties available in the future. I have access to four major sources of bank-owned homes so if you'd like to explore this area, please give me a call to set up an appointment.
Your comments are welcome! Please feel free to post them here or send me an email.
Thanks for reading!
Subscribe to:
Posts (Atom)
