Real Estate Blog for Palo Alto, Mountain View, California, and Surrounding Communities

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September 2006

• Sep. 18, 2006 - Where the Brains Are …

One of the more interesting articles I have read recently is entitled “Where the Brains Are” by Richard Florida and run in several major newspapers. In this essay, Florida notes that the most highly skilled, highly educated, and highly paid members of our society are increasingly clustered around a relatively small number of Metropolitan areas, among them our own Silicon Valley.   Not surprisingly, these same areas tend to be those where housing prices and appreciation are highest. In his opinion, these areas will continue to outpace the national averages with regard to both price and appreciation rates over the long term because housing supply is limited and demand remains high. He hypothesizes that talented and ambitions people will be willing to pay a premium to live in these areas because of the opportunities for development and success that abound in these regions. From a very personal perspective, that is exactly why I elected to remain in this area some 30+ years ago, despite the high cost of living even then. Silicon Valley is a vibrant and unique area where people are open to new ideas, where universities and industry collaborate, many times with huge success, and one that reinvents itself whenever necessary.   A typical reinvention is taking place right now in Silicon Valley. The nickname, of course, derives from the manufacture of silicon wafers for computer chips. This is the industry that transformed the area from one of orchards and farming to a high tech mecca for the early computer industry. As housing prices skyrocketed and manufacturing centers moved to areas with lower land values, the valley reinvented itself with the internet. By 2000, Palo Alto was the epicenter of the dot.com era. When that bubble burst, thousands of techies found themselves out of work, but many of those formed their own businesses and continued to flourish. In the meantime, biotech industries, drawn by the proximity of major medical centers such as Stanford and UCSF have taken root. And, in keeping with California’s ever progressive stance on the environment, many companies are now delving into development of a new silicon technology, that of solar energy. A new silicon era has begun, and the talent is already here to make it easier to push forward into this new frontier. Innovation and challenge, that is what most of us here live for. And there is plenty to go around!!   © Lynne Mercer September 2006

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• Sep. 11, 2006 - It's About Earning Your Trust

• Sep. 8, 2006 - Hybrid Cars in Carpool Lanes

OK! I will admit right up front that this is a biased report. I am a real estate agent, so I don’t carpool. I have tried to figure out ways to do it. I tried for an entire year to find a carpool passenger through the RIDES program, but the erratic hours I keep and the unpredictability of my coming and going made that an impossible feat. I have considered leaving my car at work overnight and commuting by bus. That would work fine if I could be sure that my first stop every morning and my last stop every evening would be at my office. But often I am far from my office at the beginning or the end of the day, and it makes no sense to go that far out of my way just to take a bus. I have even tried carpooling with my husband, who, like me, works erratic hours and needs his car all day. However, our offices are so far apart that it is as far to the other person’s office as it is just to go home. Nothing accomplished there either.   With all of that said, I am a staunch supporter of carpool lanes. It makes absolutely no sense at all to me that more people don’t carpool, especially if they only use their car to get to and from work (as opposed to using their car all day as part of their job, as some of us do.) There are all kinds of programs to match people up with others who work the same hours and live and work in the same general area. And many employers have incentives (actually pay their employees) to do just that. In addition, some employers guarantee a certain number of free rides home for family emergencies such as when a child gets sick at school, etc. I just don’t understand why people don’t do it.   In my opinion there should be more carpool lanes. One of the problems with the carpool system is that it is not continuous. There may be 5 miles of carpool lane and then it disappears and you are in with the mobs. I think they should just confiscate one of the single car lanes to make a carpool lane so the system will be continuous. It doesn’t matter if they aren’t full and the other lanes are. That is my point. Make it uncomfortable enough so that people begin to rethink their habits and realize that the world will not fall apart if they carpool. They may even like it… less stress, time to chat, make all the cell phone calls you like, meet new people. There are all kinds of possibilities that might open up.   With this mindset, you can imagine my chagrin when they decided to let hybrid owners use the carpool lanes. I always thought the reasons for carpooling were 1) to reduce our dependence on foreign fuel and 2) to ease congestion by reducing the number of cars on the road. While hybrid cars certainly help with reason #1, they do nothing at all for #2. Dumb idea!! Add 75,000 solo drivers to the carpool lanes and what is bound to happen? They will get congested. And, guess what? That is exactly what has happened.   The San Jose Mercury News has reported today that congestion has increased significantly in carpool lanes since 1 year ago, when solo hybrids were first permitted to use the carpool lanes. There is no proof that the hybrids are to blame. Maybe there are just more cars on the road. But even if that is true, all the more reason to keep solo drivers out of the carpool lanes. I believe more people would be motivated to carpool IF the carpool lanes really were faster than the other lanes. They used to be, but now they are not.   It shivers my timbers that there is a bill waiting for Governor Schwarzenegger’s signature that would permit MORE solo hybrids in the carpool lanes. Not that I have anything at all against hybrids. I expect all cars will be hybrids in the near future, and that is a good thing. But if the carpool lanes get clogged up, carpoolers will decide it isn’t worth it and go back to solo driving. If the authorities try to ease congestion in carpool lanes by raising the occupant load to 3 instead of 2, the same thing will happen. It is hard enough to get people to agree to an occupancy load of 2 (hence all the solo drivers). There has to be a better way! Why do I care? because many of us moved here and continue to live here because we love the weather and also the standard of living in this area. Obviously people need to get around, and I think there should be a mechanism for people to do it as easily as possible. A good public transit systen would be great, but with people spread out all over the bay area, living in one place and working miles away in all different directions, public transit may not ever really work well. More transit oriented housing is a good long term solution, but in the meantime we have to work with what we have, and the freeway system is it, at least for now. For entire Mercury News article and a chance to vote, go to www.mercurynews.com. Or add your opinion here. by: Lynne Mercer, GRI, e-Pro

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• Sep. 3, 2006 - Lower Interest Rates, Cooler Market = Buyer Opportunity!!

Contrary to most people’s expectations, interest rates have been slowly drifting lower since the Fed’s last meeting in which they left the rates where they were instead of raising them as they had been doing for the past 2 years. During the past week fixed rate 30 year mortgages averaged 6.44, down from last week’s 6.88. By comparison, the rate one year ago was 5.71 (for full details go to “Rates Continue to Drift Lower at http://nationalrealtynews.com .)   For buyers who have been waiting for the market to cool down, this may present a golden window of opportunity. While the rates average 0.73% higher than last year, the 6.44 is still very low by historic standards. When I purchased my first home in 1976, I was elated to get a 7.5% mortgage. Rates rose steadily after that, and eventually went as high as 16-19% for a 30 year fixed rate first mortgage in the early 1980’s. By the time I purchased another home in 1990, rates had dropped to as low as 12%. Again, I thought that was quite a deal. I never imagined that rates would drop below 10% again in my lifetime! Boy, was I ever wrong!   For the past few years buyers have been able to take advantage of some of the lowest interest rates in history. The thing to remember is that the rates are still in that category. There are many reasons to believe that this will not last forever. In the meantime, the tide has turned in the buyer’s favor in many markets. This is the perfect storm for the patient buyer…..a combination of still historically low interest rates AND motivated sellers!!   When I purchased my current home in 1990, I knew the market was slowing and prices were declining. Rates were declining too. But I also knew that the real estate market goes in cycles, and I was confident that, even if my house went down in value (which it did,) it would also go up in value (which it did) when the next cycle hit. I also knew that a slow market is the best market to buy into… lower prices, less competition, more choice. If I had waited until the market got hot again, I may not even be able to buy the home I have now. I certainly couldn’t buy it for the price I paid for it!! At some point buyers who sincerely want to buy their first home (or move up to a bigger home) have to commit and take action. Now may be the time!

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• Sep. 1, 2006 - Stanford Stadium Almost Completed!