Just Listed: 182 Oak Ct, Menlo Park, CA

I'm very excited to bring this adorable home to the market this week: 182 Oak Ct in Menlo Park. There is a personal aspect to this new listing - I am related to the seller and have many fond childhood memories at this house. I'm thrilled to be able to find a new family to call this lovely property home. 

Property Description: 

Boasting many original details, this charming 1928 cottage features 2 spacious, light-filled bedrooms, 1 bathroom, plus a bonus room perfect for use as an office or nursery. Located on a private cul-de-sac in The Willows neighborhood, it offers excellent Menlo Park schools and convenient access to Hwy 101 and downtown Palo Alto. This home is move-in ready, with newly refinished hardwood floors, new kitchen appliances, new roof, new furnace, and fresh paint.

  • 2 BD + office / 1 BA
  • Built: 1928 
  • 950 sq ft
  • 5548 sq ft lot
  • Menlo Park schools

Creating A "Forever House"... again

It has been a staggering six months since my last blog post and while I have certainly been busy with the hectic Spring/Summer real estate market, I also have a personal project that has been eating up my limited free time: a whole house remodel! 

And by "whole house remodel" I literally mean the whole house. After salvaging and donating as much as possible, we demolished everything to the studs and basically started from scratch. Including (but not limited to): relocating the kitchen, flopping the floor plan of the upstairs master suite, vaulting the ceilings, reconfiguring the downstairs guest bathroom, replacing all of the mechanical systems, completely insulating- no stone has been left unturned. Oh, did I mention the addition with the NanaWall and the heated concrete floors? 

The crazy thing is, this is not the first time my husband and I have created our "forever house". In 2011, we fully renovated our house in San Francisco with the expectation that we would live there for at least 20 years, only to move to Mountain View nine months after it was complete. Crazier still: I don't mind one bit. I'm one of those strange and rare birds who actually enjoys the process of remodeling a home. Which comes in handy given my career choice :) 

Speaking of which, I've also been busy preparing a new listing for sale. More on that tomorrow. 

 

Answering the Age-Old Question: "Is this the right time to buy?"

US Home Price Index, San Francisco Metro

US Home Price Index, San Francisco Metro

Over the past couple of years, buyers in Silicon Valley have been asking, “Is this the right time to buy?” or "When are things going to level out?" or "I don't want to buy at the top of the market - is this the top of the market?" And having myself purchased a home in 2006, near the apex of the housing bubble, I understand this concern on a very personal level. And it is very likely the housing bubble, or more accurately, the subsequent market correction, that buyers have in mind when they ask these questions of their Realtor. The sharp decline of the market is still very fresh in everyone’s mind and no one wants to be on the edge of that cliff. 

My answer to such questions is always this: As long as you are in it for the long-haul – that is to say, you plan to hold the property for at least 5-7 years - history tells us that you will have done well on your investment.  

Remember the home that I mentioned I purchased in 2006? My husband and I sold it in 2010 for a small loss. Today that property is now easily work $300,000 more than we paid for it.  If the perils of buying a home on the brink of one of the worst economic disasters in history are negated 7-9 years later, then rest assured that you too should do fine in the long-term.

Plus, if you also consider the fact that rents are increasing at a staggering rate, leading economists continue to paint a rosy picture of the housing market in 2015,  and interest rates remain historically low - that all adds up to this being the right time to buy in my book. 

Santa Clara/San Mateo County 2014 Year End Market Reports

In short, 2014 was another challenging year to be a buyer in Silicon Valley.The moderate interest rate increases that were forecast at the beginning of the year never materialized and would-be sellers, apparently confident in the continued price appreciation, felt no rush to "cash in". Therefore, inventory remained tight throughout the year while demand remained high given our blessedly buzzing local economy, driving double-digit price increases in most cities (Menlo Park with a whopping 21%!). 

Santa Clara County report below, scroll down further to see San Mateo County. Please feel free to contact me if you have any specific questions. 

San Mateo_Page_2.jpg

The Most Intimidating (and Innocuous) Question in Real Estate

For the vast majority of real estate customers, the first words they will hear a Realtor® utter are: "Are you currently working with an agent?"

As a Realtor, I fully understand why this question is asked. But in the not-too-distant past, as a real estate customer, I found this to be a strangely loaded question. When asked, it immediately spawned about a dozen question/answers in my mind:

"Why? Am I not supposed to be at your open house if I don't have an agent? Will you not take me seriously if I say, "no"? Will you give me the hard-sell if I say "yes"? Will you give me the hard-sell if I say "no"?  WHAT DO YOU WANT FROM ME???"

OK, maybe I got a little carried away at the end there, but you get the idea and I'm sure many can relate. Just this morning at my office sales meeting, my fellow agents were sharing stories about the dishonest answers to this question that customers have given them at open houses. And they were downright indignant about it! But instead of sharing in their exasperation, it brought to my attention what  a poor job we have done as an industry in educating customers as to why we ask this question. So allow me to briefly explain. 

As members of the National Association of Realtors, we adhere to a Code of Ethics, which explicitly forbids us (under penalty of lost commission, fines and other sanctions) from working with a client who is already working with a fellow Realtor®. 

Realtors shall not knowingly provide substantive services concerning a prospective transaction to prospects who are parties to exclusive representation agreements, except with the consent of the prospects exclusive representatives or at the direction of the prospects.
— National Assocation of Realtors, Code of Ethics, Standards of Practice 16-13

So while this question can come across as brusque and even verge on aggressively salesy, the impetus is actually quite well-intentioned. Realtors who ask this are simply attempting to establish the nature of the relationship with the customer and tailor their dialog accordingly. But if by doing so, we're making customers feel uncomfortable, it stands to reason that we can and must do better. 

Personally, I try to wait until introductions have been made and the customer has displayed at least  some interest in talking to me. And when I phrase the question, I try to give it some context, like, "Out of respect for my fellow Realtors, I must ask if you're currently working with an agent?", or "I would never want to give the impression that I'm trying to pilfer someone else's client, so I must ask: are you currently working with a Realtor?"

I'd love to hear from Realtors and customers alike. Realtors: What do you think the best approach is? Real estate customers: How do you react to this question when asked? How does it make you feel? 

Thanks in advance for your input! 

To Do in MVLA: Family Fun or Just Plain FUN!

This time of year in the Bay Area, we do not suffer from a lack of choices of "things to do". It's that magical time of year when the weather is usually perfect - not too hot, not too cold and almost guaranteed to be fog-free, even in the City. And if you are a City-dweller, you have beautiful weather in store and many wonderful "things to do" to choose from - ranging from Hardly Strictly Bluegrass to the Castro Street Fair

If you're a Silicon Valley-dweller, there are two major happenings; one that will appeal to the stroller-toting set and one to the kid-free/care-free set. I'll leave it to you to decide which is which. 

The 2nd Annual Mountain View Oktoberfest, presented by Steins Beer Garden, Tied House, the Mountain View Chamber of Commerce, and sponsored by PayPal. The Festival will feature authentic German Beer, Cuisine, and Entertainment. Live music and a free kids area for you and your family's entertainment. Proceeds will benefit non-profit organizations SOAR and CSA of Mountain View.

What else can I say? The poster speaks for itself! 

Whatever you end up doing this weekend, remember your hat, extra water and sunscreen - it's going to be a hot one. Enjoy! Go Giants and Go 'Niners!

You Say Goodbye (to Facebook), They Say Ello!

There is something very big shaking up the social media industry this morning. It's been brewing for the last 48-72 hours (first showing up in my Facebook newsfeed on Friday) and has the potential to be the biggest social media shake up since Snapchat

It's called Ello and it is the brain child of a group of graphic designers and programmers who wanted a visually cleaner and ad-free social network. As I sit here on September 29th writing this blog post, Wikipedia describes Ello as:

an ad-free social networking service created by Paul Budnitz (founder of Kidrobot), graphic design lab Berger & Föhr, and technology collective Mode Set.[1][2] Launched in March 2014 amid little fanfare, Ello became popular in late September 2014
— Wikipedia, 9/29/2014

Ironically, this new social network that is the biggest threat to Facebook since Instagram (which was subsequently acquired by FB) is actually being spread via Facebook. People are posting their Ello handles (@heatherverde here!) on Facebook and encouraging their FB friends to find them there. And while Facebook's early appeal was that you had to have a Harvard email address to join, Ello's carrot is that you actually have to be invited to join and users can only invite 5 people - giving it that attainable exclusivity vibe that we all find oh so irresistible. 

Screenshot of Ello's landing page to the uninvited. 

Screenshot of Ello's landing page to the uninvited. 

While new and potential users are all a-buzz about this new player in social media, the online news media is absolutely a-flame this morning! A quick Google News search for Ello shows articles posted just this morning by The GuardianBoston Herald, The Washington Post, Mashable, PC World, and more, both to tout the network's success or to prophesize it's demise.

The reasons why this Silicon Valley REALTOR is blogging about a new social media platform may not be immediately apparent, so let me connect the dots. Facebook is headquartered in near-by Menlo Park. They are one of the many big players (Linked In, Google, Apple and a few others round out that list) in the area that keep the local economy humming along and housing in high demand. Ello's builders and designers, on the other hand, are based in Boulder, CO - a burgeoning tech hub that is very attractive to young people and far more affordable. As a matter of fact, Colorado is actively attracting start-ups in an effort to become the next Silicon Valley, or at least a very close runner-up. And that makes this social media tug-of-war story worth following in my book. 

 

Source: www.ello.co

America's Top 50 Cities: We're #3!

Downtown Mountain View, CA

Downtown Mountain View, CA

In an recent article featured in USA Today ranking the top 50 cities in America, our very own Mountain View, CA was declared #3 in the country. I'm guessing the only reason we missed the #1 spot was because housing affordability was one of the criteria: 

To determine America’s best cities to live in, 24/7 Wall St. reviewed data on the 550 areas measured by the U.S. Census Bureau with populations of 65,000 or more.

Based on a range of variables, including crime rates, employment growth, educational attainment, and housing affordability, 24/7 Wall St. identified America’s 50 best cities to live.

Rounding out the top 5 are: #5 Evanston, IL #4 Pleasanton, CA #2 Bellevue, WA and claiming the top spot, #1 Newton, MA. More of a "who's that?" than a "who's who" list, which is explained by the fact that most large cities were automatically eliminated due to high crime rates. I don't know about you, but I'd rather be on the "obscure but safe" list than the "well-know but dangerous" list. 

Summary from the article: 

3. Mountain View, California

> Median household income: $91,422

> Unemployment rate, 2013: 5.00%

> Median home value: $749,000

> Violent crime per 100,000 residents: 204.1

> Average commuter travel time: 20.4 minutes

Mountain View scores well across many important measures. The city had low crime rates, strong-performing schools, a highly educated population, and a healthy job market. Mountain View is home to several large high-tech companies. It is also part of Santa Clara County, which includes other well-known technology centers such as Cupertino, Palo Alto, and Sunnyvale.

The county also offers access to numerous amenities, including more than 3,500 restaurants and 216 gyms and fitness centers as of 2012. As of 2012, Santa Clara County had more than 3,500 restaurants and 216 gyms and fitness centers. Additionally, as of this year, residents can also watch the San Francisco 49ers at their new stadium in Santa Clara.

However, the cost of living in Mountain View — and California, more generally — is also quite high. Mountain View homes had a median value of nearly $750,000 in 2012, among the highest in the nation and more than double the statewide median. Residents also have to pay California’s relatively high taxes. In addition to the 7.5% California sales tax, Santa Clara has an additional 1.25% sales tax. State income tax rates are also quite high.
Source: http://en.wikipedia.org/wiki/Mountain_View...

To Do in Mountain View: Pancake Breakfast

This Saturday, September 20th, beginning at 8 AM, the Mountain View Fire Department will host its 10th Annual Pancake Breakfast benefitting Alisa Ann Ruch Burn Foundation

The Mountain View Firefighters host a Pancake Breakfast and Silent Auction every year as a kick off to Fire Prevention month. This year's breakfast will be held on Saturday, September 20, at Mountain View Fire Station 4, located at 229 N. Whisman Rd. The menu will included pancakes, sausage, fruit, juice and coffee, all of which were donated by local businesses and organizations.



What better reason to mingle with neighbors and show your appreciation for our firefighters while supporting a good cause. Hope to see you there! 

 

Maintaining Curb Appeal During a Drought

It is no secret that California is facing one of the most severe droughts on record. (As a matter of fact, while researching this blog post I discovered that HuffPo has even created a whole page dedicated to news about it. ) And given that California is a state with an environmentally conscientious population, people are scaling way back on their water usage. And since nearly 60% of a person's household water footprint can go toward lawn and garden maintenance, many are letting their front lawns and landscaping die. Understandable, right? Commendable even? Of course! BUT...

An otherwise beautifully maintained (and recently expanded) home with a neglected front yard (image blurred). 

An otherwise beautifully maintained (and recently expanded) home with a neglected front yard (image blurred). 

Let's not use the drought as an excuse to stop maintaining an attractive front yard. After all, high curb appeal can add thousands of dollars of value to your home. And even if you're not planning to sell anytime soon, your lack of yard maintenance could negatively impact your neighborhood's perceived value, not to mention community pride and morale. 

At the very low-cost, low-effort end of the spectrum, you could simply add a decorative mulch over the old lawn and it would be dramatically more attractive than dead grass alone. A step up from that, you can add some native, drought-tolerant plants and shrubs to add some visual variety and interest to the yard. Further still, you can add decorative rocks, gravel or boulders. The Los Altos Town Crier has a very helpful DIY article on the topic and here are some beautiful water-efficient front yard examples from my own neighborhood that will hopefully inspire you: 

Modern landscape with black mulch, moss rock and raw steel planters. 

Modern landscape with black mulch, moss rock and raw steel planters. 

Vintage landscape with decorative rock and highly stylized shrubs. 

Vintage landscape with decorative rock and highly stylized shrubs. 

My own front yard prior to lawn removal 

My own front yard prior to lawn removal 

My own front yard now

My own front yard now


UPDATE: New Construction in Old Los Altos

UPDATE: As I wrote a couple of weeks back, this new construction home in the area of Los Altos known as Old Los Altos sold immediately after its completion in June of 2013 for $3,500,000. Back on the market less than a year later with no improvements (a true apples-to-apples comparison), it closed escrow on June 6th for $4,500,000. That's a 29% increase in one year. 

Original post dated May 23, 2014: One To Watch: New Construction in Old Los Altos

One to Watch: New Construction in Old Los Altos

Build in 2013, this New England style 4 BR, 4.5 BA, almost 3700 sq ft home, on a 1/3 acre lot in Old Los Altos, originally sold for $3,500,000. Back on the market less than 1 year later with seemingly no modifications or improvements (a true apples to apples comparison), it is now listed for $4,150,000. The first open house is Memorial Day weekend. Stay tuned for the closing price... 

Charming New England architecture with welcoming wrap-around front porch 

Charming New England architecture with welcoming wrap-around front porch 

Dark hardwood floors, box beam ceilings and abundant natural light throughout the mail level

Dark hardwood floors, box beam ceilings and abundant natural light throughout the mail level

Gourmet kitchen with marble island and designer finishes throughout 

Gourmet kitchen with marble island and designer finishes throughout 

Source: http://tours.tourfactory.com/tours/sizetou...

One to Watch: Classics at Miramonte

Just listed last week at $1,598,000, this 4 bedroom, 2.5 bathroom single-family home in the 5-year-new Classics at Miramonte development, boasts a great floor plan, fine finishes, great schools and easy access to downtown Mountain View. 

This property last changed hands in a very different market in 2009 with a sale price of $1,050,000. Given the limited inventory and strong seller's market conditions, this property will likely attract multiple offers. With a list price already 52% over the last purchase price and promising to set a new neighborhood record (for the smaller lot models), this is certainly "one to watch" in our book. Stay tuned for the final closing price. 

Desperate Times

Buyers in Silicon Valley are getting desperate. 

Buyers in Silicon Valley are getting desperate. 

There is a very old saying, “Desperate times call for desperate measures.” And if you are a Buyer in the Silicon Valley housing market right about now, you just might qualify as desperate. Which is probably why those of us in the real estate industry are hearing more and more about Buyers who don’t want an agent to represent them exclusively in a transaction (a Buyer’s Agent). Instead they will only deal directly with the Listing Agent to write an offer, which is known in the industry as a double-ended deal for the agent. In a balanced market, this is almost unheard of. The listing agent is representing the seller’s best interests, so how can he or she also represent the buyer and ensure that their best interests are also represented? But apparently these buyers have convinced themselves that working with the listing agent will give them a distinct advantage in this highly competitive market. They are willing to overlook the obvious conflict of interest for a chance at getting into contract on a home.  Which fits perfectly with the definition of the aforementioned old saying:

“In adverse circumstances actions that might have been rejected under normal circumstances may become the best choice.”

Now I’m not saying that all double-ended deals are shady. There are circumstances when they legitimately come up and with the proper checks and balances in place, they can be executed in a manner that is fair and equitable for all involved.  

But when a buyer approaches a listing agent with the intention of bending the odds in their favor, one can only imagine that the agent who takes them up on it is lacking scruples. Most honest and reputable listing agents don’t want to risk even the appearance of impropriety so when they are approached by buyers who want them to double-end a deal, they will instead refer them to a colleague to help write their offer. And THAT, my dear friends who are looking for an edge in this crazy market, is what you should do.  

Now don’t get me wrong. Researching and hiring  (per my previous post) your own agent who understands your needs and wants and having that established relationship is, of course, ideal. But if you do find yourself falling for a house and you don’t already have a fabulous agent to represent you, take the referral from the listing agent. Chances are, the two agents will know each other very well and are even perhaps good friends, which means there will be a certain familiarity and comfort level that can work to your advantage. And a scrupulous advantage, at that. 

Considering a move from SF to the Peninsula? Read this first.

There are many good reasons why people opt to live in major cities. Most commonly, people are drawn to the hustle and bustle, appreciate the variety of nearby and diverse culinary and cultural activities, value a walk-able community and cherish the short commute that city-life affords them.

I counted these (and many others) among the reasons why I chose to live in San Francisco. But ultimately, my husband’s career drew him South and he began commuting a great distance to work each day. And after the birth of our two children we were faced with the toughest question that all urban parents will face: Where will they go to school? And finally there was the combination of having a relatively small home (no storage or play room) and the cold weather (makes park-going less pleasant) that finally pushed us out of the city.

But even though I knew our move to the suburbs would have many wonderful advantages (great public schools, no commute, warmer weather, and more space inside and out!), I still had major reservations. So if you’re considering a move to the Peninsula but you still have reservations, here is my honest take on reservations vs. reality:

Culinary Wasteland

Even if you don’t care to label yourself as a foodie, chances are after living in San Francisco for any period of time, you’ve become a little spoiled by easy access to the seemingly endless supply of creative, high quality food. And walking away from that can prove very challenging. Well, I do consider myself a foodie so I’m not going to sugarcoat this: the food on the Peninsula is not as good as the food in San Francisco. This assertion will likely make me about as popular with my neighbors as restaurant critic Michael Bauer, but I'm sorry - it’s true. Yet I also contend that it’s not as bad as you fear. There are, what I like to call “adequate substitutes.” Which is to say, they may not be quite as good as the SF original, but they’ll certainly do. Such as:


SF Favorite 
Ame    
Burma Superstar
Kokkari                
Slow Club
Slanted Door
Zuni Café              
Tartine    
Little Star Pizza         

Cuisine                               
Upscale Japanese  
Burmese                              
Upscale Greek                   
California Comfort                
Upscale Vietnamese            
Rustic Café                           
Bakery                                 
Thick Crust Pizza              

Peninsula Substitute
Wakuriya (San Mateo)
Rangoon Ruby (San Carlos & Palo Alto)
Evvia (Palo Alto, same owner)
Scratch (Mountain View)
Tamarine (Palo Alto)
Mayfield Bakery & Café (Palo Alto)
Mayfield Bakery & Café (Palo Alto)
Blue Line Pizza (Mountain View, same owner)


These substitutes, plus the undeniable trend of San Francisco restaurants opening more and more Peninsula outposts (Delfina, Pacific Catch, Blue Bottle, to name but a few), should alleviate most of your “culinary wasteland” concerns.

Car-dependent Lifestyle

Having spent most of my childhood and the last 10 years of adulthood in San Francisco, this was a big hurdle for me. I was very attached to the idea of limited car dependence, for both environmental and quality of life reasons. I loved being able to walk just about anywhere I needed to go: post office, café, park, grocery store – you name it. I feared that moving to the suburbs would mean putting an end to all of that glorious convenience and communing with neighbors and nature. And I was right (exceptions noted in next section).  

But there is some hope. There are fundamental cultural shifts in the US that will ultimately make suburbs more pedestrian/bike-friendly and less car-centric. These shifts are being led by Millennials (Gen-Y) and Gen-Xers, and they are described as the end of car culture and the urbanization of the suburbs.  So the good news is, even though we will likely remain tethered to our cars for the foreseeable future, at least there is hope that our children won’t have to be.

Plus, if moving to the ‘burbs means at least one member of your family will no longer be commuting 2+hours/day, total household time spent in the car per day will absolutely decrease. Because even though you will get in your car to go just about everywhere, it will never add up to 2 hours/day, I promise.

Suburban monoculture:

Whether you’re concerned about a dominance of chain stores, the prevalence of strip malls, or just a general lack of cultural diversity, this can be one of the most daunting reservations city-dwellers have about leaving. And yes, there is some truth to this concern.

There are certainly more chain restaurants/stores than there are in notoriously anti-chain San Francisco, but that can be quite convenient at times. For example, I left The City before Target had a presence there and frequently had to drive to Colma after having children. Let’s face it – for families with young children, access to certain chain stores is rather helpful if not altogether necessary. 

And yes, strip malls still dominate the landscape along El Camino (for the uninitiated, that's the main drag that runs the length of the Peninsula), but there are many charming “Main Streets” in Peninsula towns that provide the same Mom & Pop-owned stores, restaurants and services as your SF neighborhood. My favorite Peninsula “Main Streets” are: Burlingame Ave in Burlingame, Laurel Street in San Carlos, Broadway in Redwood City, Santa Cruz Ave in Menlo Park, University Ave in Palo Alto, Main & State Streets in Los Altos, and Castro Street in Mountain View. And a major bonus: if you can get a house walking distance to one of these streets, you can absolutely maintain your pedestrian-friendly lifestyle.

Last but not least, I have been pleasantly surprised with the cultural diversity that exists on the Peninsula. Many of the children that my kids go to preschool with speak another language at home and their families regularly share their cultural history and traditions at school. The fact that there is only one Liam (my son's name, which was the US’s 3rd most searched boy's name in 2013) and two Armaans in the pre-K class, tickles me. This is not the whitewashed suburbs I feared.

There is however, one form of cultural homogenization that I did not anticipate. And that is, regardless of our ethnic, national, religious, etc. backgrounds, or even our age, we are all (what my child-free friends would affectionately refer to as) breeders. That is to say, we are all unified by parenthood, whether we are new parents, have school-aged children, are recent empty-nesters or are looking forward to the birth of our great-grandchildren. Which is both bad and good. On the one hand, I’d prefer my children to be exposed to other ways of life. Not everyone decides to have children. Not everyone decides to get married. Not everyone has a 9-5 job. And I want them to see that first-hand and know that it’s OK.  But on the other hand, when I’m in public and my children are acting up, I’m far more likely to get a look of “oh yeah, I’ve been there” than the “good lord, woman – you have children – what are you doing in public?” look I’d get in SF (even in family-oriented Noe Valley). So in general I find myself much more relaxed because I'm constantly surrounded by fellow parents and there’s this sense that we’re all in this together. Which is pretty nice. 

That's it in a (pretty big) nutshell. I could also go on and on about all of the benefits of suburban life (have you seen my vegetable garden?), but you've already heard those arguments from your suburban dwelling friends and I don't want this to be a hard-sell. This is the unvarnished truth as I see it and I hope it helps you make the best decision for you and your family. 

 

 

How 1% Interest Adds Up Over Time

"Although the difference in monthly payment between a 4.5 percent interest rate and a 5.5 percent interest is not dramatic, your savings in interest paid over the life of the loan is significant," said Erin Lantz, director of Zillow Mortgage Marketplace. "Mortgage rates will likely rise to 5 percent by the end of 2014 due to an improving economy and policy changes by the Federal Reserve. By buying a house while interest rates are still incredibly low, you could end up saving more than $52,000 over the course of 30 years."

What to Expect in 2014

There are two key factors that will dictate the direction of the real estate market in the coming year: interest rates and inventory

INTEREST RATES

Countless economists have weighed in on where interest rates will go in 2014, and while they vary on the subtleties of their predictions, the vast majority agrees that interest rates will go up. The good news is, that even though interest rates will continue to inch higher, historically speaking, they will still remain relatively and remarkably low. 

10 year treasury graph.png

So how will rising interest rates impact our local market? Given that prices are so high (historically speaking and relative to the rest of the country), even modest increases in interest rates will impact the affordability equation for many buyers. But not all buyers. Many in this area are able to pay cash or finance only a small portion of the purchase price of their home. For this segment of the population, the impact of modest interest rate increases will be negligible. I anticipate we will see slightly diminished demand as interest rates rise in 2014, but we certainly aren’t going to see demand dry up altogether. 

Interest rate graph for the past 3 years shows a steady increase since Q2 2013 which is expected to continue in 2014

Interest rate graph for the past 3 years shows a steady increase since Q2 2013 which is expected to continue in 2014

INVENTORY

On the supply side of the equation, there is the question of whether or not we will see housing inventory return to normal levels in 2014. The biggest challenge facing buyers in 2013 was low inventory. Essentially, demand greatly outpaced supply. With prices in this area steadily increasing over the past several years, the question is: Are prices now high enough to push would-be sellers off the fence? 

These “would-be sellers” are staying put for many reasons. For one, many homeowners re-financed at incredibly low rates, and now that interest rates are on the rise again, it’s difficult to walk away from those rates. Another reason is low property taxes. Many of these folks have owned their homes a long time and are not paying property taxes on the current market value, which would certainly change if they were to purchase a new home. And of course, capital gains tax is an oft cited reason for staying put. These are all economic deterrents for sellers, especially those who are looking to retire in the near future. 

MOI (Months of Inventory) in Mountain View for 2013 hovered at or below 2 months, which is very low. 

MOI (Months of Inventory) in Mountain View for 2013 hovered at or below 2 months, which is very low. 

So the big question for the coming year is: 

Are home prices finally high enough to balance supply and demand? Or are we in for yet another year of tight inventory, bidding wars and frustrated buyers?

Demand will be tempered by slightly higher interest rates and supply will loosen up as record prices knock more would-be sellers off of the fence. Though this will not be enough to tip the balance of power to a buyers market, especially in this economically thriving and highly desirable community we call Silicon Valley. Sellers will remain firmly in control though we will likely see more modest price gains in 2014 vs. 2013. 

UPDATE - One to Watch: Mountain View Appreciation

Before the holidays, I wrote about a new listing in Mountain View that caught my eye as "One to Watch". The 4 bedroom, 3.5 bathroom house on a quarter acre lot had last sold in 2005 for $1.335 million and was brought to the market last month with an asking price of $2.195 million. As I acknowledged in my earlier post, this is not an apples to apples comparison due to the minor improvements that had been made to the home, but I was still curious to see what this listing would tell us about the current state of the market. Here's what it had to say: 

The property was listed on December 5th, went into contract on December 12th and closed on December 18th for (likely all-cash given the short closing) $2.408 million. That's $1,073,000 or an 80% jump in value. Not bad for an 8 year hold, especially considering the original purchase was very near the housing bubble peak. 

 

Source: http://www.mlslistings.com/ML81342445/1322...

One to Watch: Mountain View Appreciation

Every now and then I come across a listing that tests and even potentially defines the market, and I'd like to start sharing those with you, Dear Reader. 

First up: There's a new listing on Brookdale Avenue in Mountain View that has captured my attention. It's a 4 BR, 3.5 BA, 3385 sq ft home on a large 10,560 sq ft lot with excellent Mountain View Schools, listed at $2,195,000. 

1322 Brookdale Ave, Mountain View, CA, listed by Judy C. Lee, Wilbur Properties

1322 Brookdale Ave, Mountain View, CA, listed by Judy C. LeeWilbur Properties

The main reason I find this listing so intriguing is because the last time it changed hands in 2005 it sold for $1,335,000. Now 2005 was not the absolute peak of the market, but I think we can all agree that it certainly was the heyday of the Housing Bubble.

Granted, some improvements have been made since then, including new roof and gutter system according to the listing. There is also new exterior paint/shutters, new flooring throughout the main level, painted cabinets, new countertops/backsplash and all new appliances in the kitchen and new french doors out to the backyard. And you may be wondering: how do I know this? Because even though only a facade photo was used in the MLS in 2005, the virtual tour is still live. Here are some side by sides: 

Basically the same kitchen with cosmetic and appliance upgrades. The addition of a tray ceiling was a stroke of genius, as this really did the most to modernize and open up the space. 

Basically the same kitchen with cosmetic and appliance upgrades. The addition of a tray ceiling was a stroke of genius, as this really did the most to modernize and open up the space. 

Again in the family room, most of the changes are cosmetic. Even the wood stove is the same. The biggest (and likely, most costly) improvement here is the addition of the french doors. 

Again in the family room, most of the changes are cosmetic. Even the wood stove is the same. The biggest (and likely, most costly) improvement here is the addition of the french doors. 

The flooring and cabinetry are unchanged in the dining room, but again, the tray ceiling is the biggest improvement. 

The flooring and cabinetry are unchanged in the dining room, but again, the tray ceiling is the biggest improvement. 

So while this is not an apples to apples comparison by any means, appreciation of $860,000 (64%) from the near top of the housing boom to today, even with the (mostly cosmetic) improvements made, would be quite something. That's why this listing is One to Watch! Offers are due on Tuesday, 12/12, and I will have an update shortly after that.  

Side note: If they do get near the asking price, let this also be a case for staging and professional photography. This property is very nicely presented this time around.