Monday, April 26, 2010

Can you actually see a house on that thing?

I'm often asked by clients for information on what tools are best for searching for a home. Depending on where you are, the local MLS is probably a good start and there are merits to using major sites like Trulia, Realtor.com, and Zillow. However, I keep seeing articles about applications for smartphones and I have to wonder; can you really see a house on those things?

I've got a smartphone and I have used it to look up listings. I usually do it because someone asks me for details I don't have on a home. Unfortunately for the phone and the broadband network it runs on, downloading lots of high resolution pictures seems, well, impractical.

Sure, it seems cool that you can house hunt on your phone but can you actually see the home in any real detail? You can't see most of the virtual tours and the underlying listing details contain so much data you have to scroll through volumes of text to get what you want. Perhaps we should offer magnifying glasses to our clients who view homes on their tiny smartphone screens.

I just don't see the value in these applications and I have yet to hear from a client who finds them valuable. Most people I talk to use the tools for finding and mapping open houses.

Does anyone out there use these mobile apps to actually preview homes or are the application developers just pumping these things out for our amusement?

Thursday, April 22, 2010

Guess who's stalling the real estate recovery...

Well, here's another clue. It's the same idiots who made a bad problem worse by making the real estate downturn in the worst markets a national headline for months on end - the mainstream media. Why? Bad news sells papers and ad time on TV.

Several articles have been published in the last few days ranging from positive recovery news to more bad foreclosure news. Here are a few headlines:

Home sales, jobless figures point to recovery
Silicon Valley median home price rises 29%
Santa Clara county foreclosures jump 72%

In one article an economist at Credit Suisse says "We don't see another recession."

So, who's right in all this? No one. The reason it takes so long to recover is that the media will continue pumping any sign of bad news it can. This impacts the psychology of the entire country. The big media outlets report on what happens with one or more major metro areas as if it impact the entire country. It doesn't!

The downturn in Phoenix, Las Vegas, and various cities in Florida would not have had as much impact on the rest of the country if they had simply reported the news IN THOSE AREAS. Instead, the media insists on telling us the bad news there and then IMPLIES that the same thing will happen in my home town. Guess what, speculating on bad things often makes then happen - surprise!

Around here, when the foreclosures were starting to hit east San Jose, the media should have said "this applies to east San Jose because the area was showered in cheap loans made to people who couldn't afford them". Instead, we hear "the South Bay is seeing a downturn". Generalizations created fear and that is what took the markets down.

The media creates and continues to stoke fear in the hearts of buyers. The level of activity in the local area is strong with many homes selling in a few days with multiple offers. However, many buyers are cautious because of what they hear.

My advice to you is to look at the stats and don't believe the soundbites.

Sunday, April 18, 2010

A coat of paint doesn't mean "recently remodeled"!

I've been looking at single-family rental homes in areas of Saratoga, West San Jose, and Cupertino lately. In that search, a curious term gets used - remodeled.

For most people, the word "remodeled" implies that a home has had new flooring, new dual-pane windows, or a new kitchen or bathroom installed. The expectation is that some part of the home will look "new" or at least be in very good condition. However, several of the owners of these homes seem to have missed that point.

I've seen several homes that were posted on Craigslist described as "remodeled" or "updated" where nothing more was done than a coat of paint. Even worse, the paint was not done throughout the home or was done badly. Note to the "do it yourself landlords" - streaks, drips, and clumps mean you're doing something wrong! The few homes with real remodeled kitchens or floors looked like the work was done by blind, epileptic monkeys. Gaps, cracks, peeling on the cabinets and bumps in the floors. Is quality a lost art?

Can we get a little truth in advertising here? Painting is not remodeling. If the home was built in 1954 and looks like it was built in 1954 with dingy, nearly original cabinets, tile, and flooring, please don't try to scam me with exterior photos doctored in Photoshop and a complete lack of clear interior shots! As a Realtor who is required to accurately reflect the condition of a property, I find it offensive that after looking at dozens of listings all but two have come up severely short on their descriptions.

Wednesday, April 7, 2010

You CAN cut your high property taxes and save money!

The SF Bay Area is one of the most expensive real estate markets in the country. During the boom we all watched as our property values soared and felt a sense of security in knowing we had all that money for the future. When property taxes rose at the same time, nobody cared. Why worry about a few thousand dollars when I'm making hundreds of thousands in appreciation?

Well, the future is upon us and values have collapsed. Unfortunately, the property taxes haven't. To make matters worse, the tax assessor is under no obligation to review your property to see if you're overpaying. How bad can it be? Here's an example...

Let's say you bought a home in Los Altos for $2 million at the peak. It's a nice 4BR/3BA on a quarter acre with upgrades and conveniences. That house is costing you about $22,000 a year in property taxes. That same house now is probably worth about $1.7M, given that the market has dropped about 15%. If the assessor revalues your home at $1.7 million your taxes should be about $18,700. That's a savings of about $3300!

To get this break, all you need to do is call the county tax assessors office and ask for an appraisal. It will take time but the effort is well worth it. You can do it all by yourself, don't fall for scams implying that a company can do it for you. Go save yourself some money and call today!

The website is here: www.scc-assessor.org and their number is 408-299-5500.

Tuesday, April 6, 2010

Americans say it's time to buy a house. Are you doing your part?

I read an article this morning that says 64% of American's think this is a good time to buy. That compares favorably to a similar survey in 2003 when the figure stood at 66%. So, just because the majority think it's a good idea does that mean it's so? Yes!

Let's start with interest rates. Right now the average overnight rate on a 30 year loan is 5.25%. That's really cheap money. For jumbo loans - more applicable around here - the average rate is 5.95%. But wait, just because I can get a cheap loan doesn't mean it's a good time to buy. That's partly what started the downturn, right?

True enough but we're seeing strong demand without radical price increases. Multiple offers are making a comeback but the difference between the boom times and now is that we're not seeing most houses push way over their asking prices.

For Q1 2010 in Los Altos, we had 63 closed sales versus 27 in 2009. The median sales price increased from $1.41M to $1.521M and the percentage of listing price received increased from 93.56% to 97.29%. These statistics are for single-family homes.

It's a great time to buy and the statistics are showing that in this area we are doing our part. Let's have a strong Q2 and continue the trek back to a stable economy.

Friday, April 2, 2010

Pay tax on cancelled debt? Government is numb from the neck up...

I read an article about the latest challenge in California about how people with canceled mortgage debt are faced with huge tax bills because the money is "taxable income" in the State of California. The only question I have for the legislature in Sacramento is; Are you guys numb from the neck up?

Seriously, the Feds had this figured out years ago and put a law into place that suspends taxing these losses until 2012. That's pretty forward thinking for Congress no matter how dysfunctional they seem. So, why can't our state do the same thing?

We should have a standing law on the books that says that there are no taxes on any forgiven debt when selling any real property where the sales price meets or exceeds the original debt. It's not that hard to do. They had it in the 2007 and 2008 tax years, how about a quick resolution to bring it back.

If the state lets the law stand, I fully expect to see personal bankruptcies increase this year as a result. You can't expect broke people to pay tens of thousands in taxes and not declare bankruptcy. If the politicians need something else to be scared of, that's certainly worthy. Our state is barely recovering and we need these taxes eliminated.

What do you think?