Real Estate Blog for Palo Alto, Mountain View, California, and Surrounding Communities
• Jun. 3, 2007 - Baby Boom or Befuddled Builders??
There are 5 new homes going up at the end of my block. It is always exciting when new homes are built in an older, established neighborhood. Everybody wants to know what they will look like, who is going to move in, etc. The thing that strikes me about these homes is that they are so BIG! Not mansion sized, mind you, but they are certainly larger than any of the neighboring homes.
Now I am not one to get upset about people building large homes, as long as they are tastefully done and fit in with the neighborhood, but it does puzzle me. After all, if you listen to the economists we are the brink of a social disaster as baby boomers begin to retire and there aren’t enough in the following generation to pay for their social security. If that is true, who is going to buy all the large, 2 story homes that are being built? It is pretty common for people who are retiring or downsizing as they become empty nesters to want a single story home. They realize this might be their last home and they are looking ahead to days when they may become less nimble than they are now. Certainly I have sold 2 story homes to people who had just retired and wanted to buy their dream home, only to have to sell that same home 10 years later when their health had deteriorated. It seems to me it isn’t the baby boomers who are buying these giant homes!
So, I wonder, are the economists wrong, or are the builders wrong? I sometimes think it must be the economists. It seems everybody is having babies these days. Almost all of my clients this year have sold their starter homes or condos and bought bigger because their families are expanding. School boards that 10 or 15 years ago closed down schools and sold off the land they sat on are now scrambling to open new schools. On our property flyers, we may list the local schools, but always with the caveat that the schools are not guaranteed and buyers must confirm with the local school if their child will be able to attend. Why? Because the schools are so crowded that there isn’t room for everybody!!
On the other hand, builders seem to be paying little if any attention to those of us who really are slowing down or at least realizing that our best days may be behind us, even though, when we do plan to move, you can bet we will be looking for a single story home or at least one with the master bedroom downstairs. How rare that is!! But maybe they builders are more “with it” than the economists and they realize there may be another baby boom taking place!! It is an interesting puzzle.
As for me, I know I won’t solve the puzzle, but like all the neighbors I am walking by the new homes every day, watching their progress, surmising what the interiors will look like, and hoping that we will be blessed with new neighbors that are as nice as the people already living here. We shall see!! |
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• Mar. 30, 2007 - RSVP for Seniors and the Housebound
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The Realtor Service Volunteer Program (RSVP) is getting set for its annual week of volunteer service to the community. This annual week-long community outreach program, initiated in 2001, provides free assistance to qualified seniors housebound individuals who cannot perform certain tasks within their homes. The goal is to have all the work required by a single homeowner completed by a small team of volunteers in a single visit.
Many Realtors recognize this as a wonderful way to give back to the community that we depend on for our livelihood and volunteer their time to wash windows, change light bulbs and smoke detector batteries, trim bushes, clean gutters, move furniture, flip mattresses, and any other routine maintenance tasks that do not require special expertise.
If you would like to submit an application for assistance in your home, please contact me for an application form. Applications are due in mid April. A coordinating team with preview the homes selected to determine how many volunteers and what materials will be required. The work will be completed between May 7th and May 12th.
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• Nov. 8, 2006 - How's the Market?
How’s the Market?
This is one of the most common questions real estate agents hear. Of course, real estate agents are sales people, and as such they are inclined to put a positive spin on everything. There is no “bad” time to sell a house. There is no bubble, just a correction. And so it goes.
I guess I am as guilty as the next guy. I have been saying all along that the bubble was not going to burst in this area any time soon. It isn’t based on the real estate agent’s eternal optimism, but on my own experience and an understanding of human nature.
It is true that the market goes up and down, just like the stock market, and it can change pretty quickly. But as long as there are more people moving into our area than are leaving, as long as this area continues to be considered one of the best areas in the US to live, based on climate, amenities, opportunity, etc., and as long as there is a chronic shortage of housing and no vacant land to build on, the down cycles are bound to be mere blips on an ongoing upward trend.
There is no question that sales have been off this year, compared to last year. In some parts of the country, even within the state, there has been a serious shift in the housing market with marked price reductions. But not here. The changes here have been very moderate. It is true that sales have dropped to the 2003 level (which was, by the way, a record year!) And the median price of homes has slipped in recent months. That trend could continue into the next year, or it may just be the stabilization and slowdown that one expects in a “normal” year, once summer arrives. The problem we have is that there are not many “normal” years in this area.
For those of you who are concerned about whether or not this is a good time to buy, please note. None other than former Federal Reserve Chairman Alan Greenspan has said, “The U.S. housing market will weaken further, but the sharpest decline is over as inventories of unsold homes decrease.” In other words, we may be close to another up tick. In the meantime, interest rates have dropped down again and are now barely 1% higher than the 40 year record lows set a year ago.
Buyers…. There may not be a better time to buy a house than right now. Demand is low (less competition) and interest rates are low as well. Don’t wait until activity increases again or rates go up again. Could have, should have, would have....... I have heard those words before, when buyers looked back and realized, too late, they had missed a great opportunity. |
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• Oct. 23, 2006 - HOUSING AND THE UPCOMING ELECTIONS
November is election month, and there are issues on the ballot that are directly related to housing issues.
One of these, proposition 88, would impose a fixed $50 tax on most real estate property parcels in California to fund public schools in kindergarten through grade 12. Certain elderly and disabled homeowners may be exempt.
Proposition 90 seeks to bar state and local government from condemning or damaging private property to promote other private projects or uses. It seeks to regulate the definition of “just compensation” if a property is condemned or taken by eminent domain, and it seeks to limit government’s authority to adopt certain land use, housing, consumer, environmental, and workplace laws and regulations except when necessary to preserve public health or safety. (Note, the initiative, if passed, applies to all types of private property such as cars, buildings, etc., not just lands or homes).
Proposition 1C would authorize the state to sell bonds to finance affordable housing projects.
These issues are complex and the decision to vote for against each one will require a commitment of considerable time for the conscientious voter. Still, I encourage every responsible citizen to sit down and read not just the pro and con arguments, but the proposition itself, as there will be language in there that the pro and con writers will either choose to ignore or to take out of context.
I can not presume to advise you how to vote. Everybody must vote according to his or her own conscience. Personally I get angry to think that ordinary citizens are being asked to make decisions that we really are not qualified to make. That is what we pay our legislators to do for us. However, it always seems to come down to this and it cannot be ignored. The issues are way too important, so please, do vote and please do vote responsibly.
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• Sep. 11, 2006 - It's About Earning Your Trust
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Why is it that the general public regards us so poorly? Personally I think there are a number of reasons, primary among them is the low standard for entry into the profession. Take a few courses, pass and exam, and presto, you are a real estate agent. Unfortunately passing the exam is only the beginning of the learning process, but agents are let out on their own, often with little or no real supervision, right away. The reality is that real estate is complicated. It requires a combination of skill sets that include project management (getting the house ready for sale), successful marketing, construction issues, legal issues, and negotiating skills, to mention only a few. It takes most agents a number of years to hone and refine those skills. Some new agents learn very quickly, but some never do!! I would like to see a system where new agents would have to work as apprentices for established agent for at least a year or two before getting a final, permanent license.
Secondly, not all real estate agents are Realtors®. Realtors® belong to a professional organization the National Association of Realtors® and subscribe to the strict code of ethics referred to in the opening paragraph. Realtors® who violate those rules can be reoported and they may lose their status.
Also, in my humble opinion, there just are too many real estate agents out there. There seems to be a misconception that selling real estate is easy. Just stick a sign in the ground, hold and open house or two, and presto, make a lot of money! That may in fact be true when the market is hot, as it has been for the past few years (although there are a myriad of things that can and do go wrong even in a fast market). However that misconception melts away pretty fast when the market slows, houses stay on the market forever, buyers refuse to buy, sellers refuse to be realistic, and agents have to really, really work to find buyers, find the right house for them, and negotiate, sometimes fiercely, to make the deal go together. When I entered real estate in the early 1980’s, interest rates for first mortgages zoomed as high as 16-20%!! Most sales involved “creative financing” which took many forms, some of which were downright scary!! But you had to be creative. I remember negotiations going back and forth for days or even weeks before everybody agreed on all the details.
When the market is hot though, and there are several available agents for every potential listing, some agents will start cutting corners, making promises they can’t keep, forgetting that their primary function is to serve their clients as opposed to line their pockets. They discount their commissions, and then try to “double end” the transaction (represent both sides) to make it profitable. Sellers may think their agent is great for finding a buyer for them, but they don’t realize that they may have lost thousands by not exposing their home to a wider range of buyers. Sometimes these same agents don’t market it like they should. How can they when they have cut out their own profit margin? Advertising is expensive!
When the market takes a downturn, one thing is certain. Many agents will flee the scene. Once the dust has settled, look around. The agents that are left are the same ones who were there before the craziness started. They are professionals, almost always with a loyal client base of repeat and referral clients. Like any profession, there are good and bad, but it is the bad ones that make it difficult for everybody. I, for one, can hardly wait for the dust to settle!! |
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Selling real estate in the mid San Francisco peninsula is unlike selling real estate in any other area. Just as the geographical area is famous for its microclimates, the real estate landscape has its own microclimates, each with its own idiosyncracies. An experienced agent will be in tune with the subtle variations from one subarea to another. But it is always changing. In this blog I will attempt to capture some items of interest to buyers and sellers alike, and to have some fun as well (see ""Fun Stuff"). If you have information you would like to have posted on this website, please email your suggestios to Lmercer@Lmercer.com.
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