Blog Brawl-Update

Blog Brawl

Incredibly, I won again! This is all because of you folks too! Thank you very much!!

Well, here we go again…into the Elite 8! This round is a truly outstanding blog from Virginia, VArealestatetalk.com who my assistant accidently insulted.(She didn’t mean it Cindy, honest!) Everybody in Virginia is bound to be lining up to support her now!  Please help this little Cinderella story move on to the Final Four! (Amazing!) Click the link below and vote for one choice in each zone. You can only vote once per IP address…but vote often from multiple computors! Go Fostercityblog!

Elite8VoteElite8Vote

Thanks again!! Voting ends on Sunday at 9:00PM Pacific time…I’ll let you know how it turns out.

A Tip for Sellers

Kitchen

Here’s a little slice of life. I’ve got some buyer clients who are qualified up to $900,000 looking for a house with minimum 3 bedrooms, one level, good area and not a tear down and, of course, a good deal. We were planning to go look at some places one Saturday recently. All of my clients are plugged into an automatic property search that’s part of my website and they receive listings as they come on the market. This on-line organizer allows them to mark homes they’re interested in or delete those they’re not too hip about. ( It’s not uncommon for a client to delete a real gem and mark as interested a real dump…but that’s what I’m here for…to educate them). Typically clients will express an interest in living “somewhere in the Mid-Peninsula”. It’s actually kind of unusual to hear someone insist on living in only one city, so again, it’s my job to cull down the choices to a selection that the client will like based upon the education they’ve been giving me during our relationship. It’s also common for a client to mark 15 to 20 houses as interested but I discovered a long time ago that once people get past the 5th or 6th house their memory of what they’ve seen blurs a bit and they find it hard to keep track of the many details of the houses they’ve seen. Consequently I almost never show more than 6 houses at a time, there’s a natural, human point of diminishing return if we do…for everybody. It’s important to note that if you’re looking in more than one community there’s always going to be something to see in any given price range at any given time. It does happen that one house stands out way over and above all of it’s competition but it’s much more rare than you might think. My point? If you’re a seller chances are your house is not unique…there’s other houses comparable to yours on the market too.

So here’s what happens in the real world. I try to find a manageable 6 houses out of a stack of maybe 15 listings the client’s expressed interest in. Since I’ve typically previewed these houses I know immediately which represent the best opportunity to meet my clients expectations and that’ll reduce the list right away to 8 to 10 choices. How do I reduce it further you ask? The sellers do it themselves! On Friday afternoon I’ll call these listings to make appointments to show the houses Saturday morning. The first two, simple, no problem. The third goes like this:

Me: Hi, this is Jim Minkey with Re/Max, I just called to see if I can show your house tomorrow morning?

Seller: Who? What?

Me: Jim Minkey with Re/Max…is it OK if I come over tomorrow and show your place?

Seller: Ummmm…No

Me: (confused) Ummm…I can’t?

Seller: No, sorry, we’re busy tomorrow. Why don’t you come over on Sunday afternoon during the open house.

Me: Umm..sorry but my clients have plans on Sunday. They’re meeting me tomorrow.

Seller: Oh, well

Me: Thanks anyway…good luck.

The fourth call is fine and then we have this one: The listing agent is from out of the area. The house doesn’t have a lock-box, has no seller phone number and all showings need to be arranged through the listing agent. So I call him/her in area code 415,510,408 and sometimes 831 or 916 and inevitably leave a message. Do you suppose agent x returns my call? Ah..no. Actually yes they do…at 4:00PM on Sunday afternoon. “Go ahead and show it. There’s a combination lock-box hidden in the meter box on the side of the house” Great, too bad my clients looked at houses yesterday. “You’re exaggerating” you say. I’m serious…this kind of thing happens almost every-time I make appointments to show property.

Here’s the thing..when your house is on the market it’s your product.It has to be exposed to potential purchasers. It’s no different than if you opened a store at the Hillsdale Mall. Imagine Restoration Hardware’s manager saying “Sorry, you can’t come in here on Saturday afternoon, my aunt’s in town from Topeka and we’re busy. Why don’t you come over between 1 and 4 on Sunday afternoon?” Or even better…Restoration Hardware’s manager has to drive over from Fremont to unlock the door but only if you’re lucky enough to catch him on his cell phone to make the appointment well in advance. It’s not a coincidence that these listings tend to sit on the market a long time…and take several price reductions in the process.

No question, it can be a grueling adventure having your home on the market. I’m also well aware that often agents will call, make appointments, and never show up. It’s a pain to have to keep the place in perfect showing condition, especially when the kids are running amok and dinner is burning in the oven but the rewards can be great in doing so. In this market in particular you want as many potential buyers as you possibly can get.

Fun with Numbers

A friend of mine asked me to do a little analysis for him on what Foster City single family home prices were in 1998 and give him an average. 1998 seems like yesterday to me, in fact I’ll bet if I went through the pockets of some of my pants hanging in my closet I’ll find a dinner receipt from Chevy’s from some night in 1998. (No jokes about weight gain, please!) Actually I’ll bet half of my wardrobe was purchased in 1998! The Denver Broncos won their second Super Bowl in 1998! It all seems like yesterday to me. Here’s the thing…the most expensive house in Foster City, one of those big places on Sea Island Lane, sold for $840,000 in 1998. After that it was a 4 bedroom waterfront on Monterey that went for $784,000. 198 single family homes sold in 1998 in Foster City and 36 of them sold for $450,000 or less. Also, of the 198 sales, 30% (61 of them) went for the asking price or over. Is it just me or don’t those price ranges seem like a long time ago? In the last calendar year 110 single family homes sold in Foster City and only 3 of them went for less than that pricey house on Sea Island sold for in 1998…one of them was gutted by a fire and sold in that condition, and the other two were attached houses at Williams Landing!

So I thought that in light of all of that horrible news we’re constantly bombarded with about the “bubble” bursting and home values plummeting I’d throw out some numbers that I think are significant:

14…The total number of single family houses currently on the market in Foster City.

14…Total number of single family houses in Foster City priced over $900,000

7….Total number of Pending Sales, or 50%

 2….Number of non Eichler ranchers currently for sale in Foster City

 18…Total number of single family houses sold in Foster City in the last 3 months(Remember, it’s a dead market)

14…Total number that sold for over $1,000,000

38.8%…Percentage of homes in the last 3 months that sold at or over the asking price, better than 1998.

Now let’s get a little perspective by looking at the total number of single family homes currently for sale in our neighboring sister Peninsula cities:

San Mateo….139

Belmont….45

San Carlos….49

Redwood City…195

When I look at Foster City’s current inventory I’m shocked at how low it is. There’s over 4500 single family homes in this town…14 is very low inventory and the fact that there are so few ranchers on the market tells me what an opportunity is out there right now. In spite of the bursting “bubble” and the treacherous “subprime”and the “mortgage meltdown” Foster City’s real estate economy is doing pretty darn well, thank you very much.

And the Winner is…

Village SquareVillage Square

Village SquareThe basic design for the new downtown area in the 15 acre-Village Square site was unveiled last week at a Planning Commission study session and was met with rave reviews (how about that!) from both folks in attendance as well as from Commissioners. The model shown was a revision of one produced earlier and this one features much taller residential towers, up to 14 stories in some places, yet opens up clear site-lines along many key corridors. The center of the main plaza will have a pavilion that could be used as a restaurant. Now that the basis design is a go the architecture of the buildings will begin to be developed. It’s hoped that construction could begin by the summer of 2009. Here’s a link to more about this:

NewDesignLink

Chess Drive and Gilead Projects

 

Just in case you thought the 15 acre site-Village Square project, the Pilgrim-Triton project and the newly filled Parkside Towers reflected a booming Foster City business environment, look out, because here comes two more. The Chess Drive project, which is in the area north of highway 92 and east of Foster City Blvd, will replace 190,000 square feet of office and warehouse space with an 800,000 square foot office building that could rise as high as 10 stories. On top of that the big biotechnology company Gilead Sciences plans to double it’s research and development facility on Lakeside Drive from a little over 600,000 square feet to 1,200,000 square feet. Yowza! So here’s what Foster City’s got on the table right now in terms of future square footage in just the newest developments:

Parkside Towers……400,000 sq ft

Gilead Sciences……..1,200,000 sq ft

Pilgrim-Triton………..319,000 sq ft

Village Square………..30,000 sq ft

Chess Drive……………800,000 sq ft

                      Total    2,749,000 sq ft of office and retail space on the horizon!

Needless to say, Foster City is in the process of hiring a consultant to study the anticipated outcome on local traffic from having all of these projects converge in this town. Here’s a link to a San Mateo Daily News story about this issue:

TrafficStory

Um, let’s think about this for a second…almost 3 million square feet of new office space, a new downtown environment, a second retail live-work hub and maybe even a Peets Coffee. It would seem that our home values are going to be OK? I think we can count on it.

Soccer in Foster City

Soccer

Just in case you might have missed it, or have been in a coma for the last 20 years and have just awakened, Soccer is a big deal. In fact, it’s a really BIG DEAL and when it comes to Foster City I don’t have a font size large enough to express how big of a deal it is here. Let’s just agree to say that in Foster City people like it a whole bunch. Maybe it’s because this community is enormously blessed with many wonderful and expansive parks with fields large enough to allow soccer to be played there and people from all over the Peninsula have been attracted to them like Stanford alums to a good Cabernet. Five parks, Edgewater, Boothbay, Port Royal, Catamaran and Sea Cloud have soccer fields and the last one is the most coveted destination…maybe on the whole Peninsula. Drive over to Sea Cloud Park some weekend and check it out…you’ll be amazed.

Because of all this interest a brouhaha has sort of developed because groups of recreational adult soccer players like to meet and have pick up games during lunch hours or after work in the parks and at Sea Cloud in particular. The city put tough new restrictions on field use and wants these groups to organize, pay fees and be insured to use these city parks. Recently, games in which players don’t have permits have been broken up by the Police. The recreational players argue that it’s impossible to buy liability insurance for pick up games since the participants are different from one day to the next.

Parks and Recreation committee meetings have been exciting as debate has gone on about the purpose of the city’s fields, the nature of liability insurance, and what constitutes an organized group as opposed to a pick up game. Naturally, the fact that Foster City is such an attractive location for soccer for the whole Peninsula underlies the controversy and makes competition among groups an inevitability. At this point it appears there is actually some movement toward compromise and in this mornings San Jose Mercury-News we had this story:

http://www.mercurynews.com/news/ci_8461416

So, back to the original point…soccer’s big, and it’s not gettin’ any smaller. If you’re at all interested in youth soccer in Foster City, and you’re not aware of this already, click on the following local links for more details.

http://www.aysofc.org/ 

or:

www.peninsula-soccer.com

Sad Story of our Times

Foreclosure

I was referred to an individual last week who wanted to know if I could sell his house. He’s a 59 year old disabled man who, as far as I was able to ascertain, has never worked in his life. He inherited the home following his parents death in 1993 and has been living there ever since.  There was no loan on the property at the time of his inheritance. His sources of income are his Social Security checks and rent from a separate in law unit at the house. As I was touring the house I asked him why he wanted to move. He told me because he couldn’t afford to live there for much longer. Why, I asked. He told me that the mortgage he has is burying him. He told me if he could get $800,000 for the house he’d be OK and could move someplace else and rent. In my opinion the house is worth somewhere between $650,000 and $700,000. When I asked him how much he owes he produced his mortgage statements…2 of them. He has a first loan of $645,000 and a second of $80,000, both from lenders I’ve never heard of. The first has been negatively amortizing. He also has $60,000 in credit card debt and to make matters even worse…he has terminal cancer. For the last 7 or 8 years he’s had a relationship with a mortgage broker who has refinanced him several times and on three separate occasions has taken equity out of the house to use as second deeds of trust, for other clients of this broker, on properties he did loans for in the East Bay. Payment on the seconds went to the mortgage broker who then paid this man. The aroma from all of this was stifling. When I told him he had no shot at $800,000 and a short sale would be his only way to sell the home outside of foreclosure he dejectedly told me he thought he’d ride it out. It’s awfully hard not to feel like he didn’t get ripped off. How does a lifelong unemployed person get $725,000 in loans? Where did all the money go? I gave him several options of people he could call to discuss these issues in detail but I don’t know if he ever will. He was real embarrassed by his plight and said he didn’t want to get anybody in any trouble. It’s haunted me ever since.

Lending Guidelines

Wells Fargo

I was at the Title company today to sign papers with my clients who are selling their Foster City townhouse when our escrow officer informed us that of the five files on his desk ours was the only one that the loan documents had come in on time…and thus we were on schedule to close on time next week. The other files he had were due to have closed either earlier this week or last week and were still awaiting the arrival of those precious docs. I had to laugh because I thought it was only my deals this year that had gone completely haywire from a timing standpoint! Why, you ask? The reason is because the lenders right now have become really, really strict when it comes to their guidelines. I actually had a transaction last month that was delayed almost two weeks and one of the reasons was that the buyers were $178.00 short on their cash reserves and the lender’s underwriter was uncomfortable drawing the loan docs if they were in any kind of a negative situation. $178.00. On a $700,000 loan. I actually put $200.00, of my own money, in my buyer’s savings account to put them in the black. The underwriter asked for a copy of the receipt! Needless to say, the easy, breezy days of zero down and stated income loans are over…the pendulum has swung pretty far in the other direction. Many lenders right now are back to requiring 20% (or more) down.

There are other loan products available but here’s an obvious fact, for the time being you’ll need to really have your ducks in a row if you’re buying right now. For quite awhile almost everybody could go from the idea stage to closing in a relatively short amount of time. If you’re thinking of buying now you really need to have, and work, a plan. You have to have an adequate down payment (and it needs to be your own money). You have to have a good credit score. You need adequate cash reserves and your debt to income ratio has to conform to lender’s standards…which actually keep getting tighter.

All of this is good too! We desperately needed to get back to some form of sanity. It’s OK if you can’t buy a property for 6 months or more. If you’re ducks are actually in a row you’ll find it much easier to handle that mortgage payment. If you’re kicking around the idea of buying, even if that involves a move up and the sale of a property it’s a must to spend plenty of time with a mortgage professional to create a successful game-plan. Once you do that you’ll greatly reduce the stress of the escrow process and close on time.