“There are three kinds of lies: lies, damned lies and statistics” Mark Twain

I got so excited about this post that I really feel like it needs musical accompaniment…so before you start digging in, go ahead and click the button below first. It’ll add to the enjoyment!

On Tuesday afternoon I surfed through SFGate.com and discovered that our friends at the Chronicle had, as one of their lead stories, a piece on the real estate market that was headlined “Real Estate Market in Free Fall”. They later modified that and it morped into the more friendly “The Plunge In The Price Of Homes Gets Worse” . The story had an attached companion piece showing Bay Area Home Prices By Zip in which I was shocked to discover that Foster City(FYI: The Chronicle thinks that Foster City is in San Mateo) has dropped in value 9.9% and, incredibly, the San Mateo Zip Code 94402 has dropped a whopping 27.1%! That last number was particularly stunning since it made it worse than Daly City, South City or Pacifica. As you may have guessed…I didn’t believe these numbers.

The Chronicle was touting the work of “experts” S&P/Case-Shiller who had compared the numbers from May 2007 to May 2008 numbers and thus had drawn their conclusions. Honestly, I got a little nervous because I had not done a year to date analysis myself and I reasoned that since May 07 was pre-mortgage meltdown I figured it was logical to assume that there could have been a fairly significant drop. So yesterday morning I got up and crunched the actual numbers from the MLS database. I looked at 94402 because that decline was so enormous. That zip is comprised of San Mateo Park, Baywood, Aragon, Parrott Park and, atypically, Sunnybrae, which is largely a starter home neighborhood. The others are very pricey. Guess what? Turns out that in May of 2007 not a single house in Sunnybrae sold…the lowest priced house in 94402 that month went for $1,200,000. Of the 20 houses that sold then all of them were on the west side. In May of 2008 8 out of 21 houses sold were on the east side and as you might guess that has a very large effect on the averages…actually a difference of 27%!

How about Foster City? In single family homes in May of 2007 19 sold at an average price of $1,131,526. In May 2008 17 homes sold…at an average price of $1,153,287! That’s right, values on single family homes actually ROSE year to date! So why the 9.9% decline? Because S&P/Case-Shiller averaged in condos/townhouses, and in May 2007 19 of them sold…including two at Promontory Point that sold for $1,087,000 and $1,335,000. In May of 2008 only four condos/townhouses sold…the most for $750,000. The average of both single family and condos/townhouses together shows a net loss of 9.9% as a result.

This kind of reporting is preposterous folks. You can’t compare multi million dollar properties to studio condos in search of truth about real estate values. I wonder if the June or July numbers come out and show no Sunnybrae sales in 2008 but 8 or 9 in 2007…will the Chronicle report that 94402 had a 27% increase year to date? If the July 2007 numbers show several 1 bedroom condo sales at the Admiralty and the July 2008 numbers show the three single family houses that closed over $1,600,000, will they report a 200% increase in values in Foster City?

I think this reporting is unfair and stretches the truth about this area alot. The only free fallin’ going on here is done by Tom Petty. (I saw him once in concert at the University of Denver…but hey, I’m a fossil)

The Condo/Townhouse segment of the market has some similarities and some differences to the Single Family market. It’s similar in the sense that it also has slowed down. Today we have 39 units on the market and 9 pending sales. Last time I did this we had 36 active with 13 pending sales. There’s a couple of things, in my opinion, that have a big impact on sales in FC. One is the fact that it’s become harder to get a loan for entry level buyers since more down payment is typically required, and/or lender criteria is so much more strict. It’s ironic that the lower price ranges are having the hardest time right now, but that’s the reality. When you combine that with the fact that some entry level projects have association dues approaching $500.00 a month and it becomes understandable why it’s slow. Interestingly, in the middle range with prices between $650,000 and $825,000 in Townhouses there isn’t much inventory…and what comes up is getting plenty of interest. Here’s some that are worth a look…and should sell pretty fast:

663 Draco Lane listed by Nonnie Dinges of Cashin Company for $749,000. This property needs some updating cosmetically, but you sure can’t argue with the price. It’s a large 4 bedroom, 2.5 bath 1920 square foot townhouse. Certainly you’ll not find any single family house with this much space anywhere near this price…the dues are under $300.00 a month too.

881 Balboa Lane listed by Lorelei Keim of Coldwell Banker for $748,888. This one’s my favorite right now in Foster City…it’s really gorgeous! Wide water front at the Islands with great views, 1780 square feet, 2 bedrooms with a family room. Great price too…just for fun go see the open house.

778 Gemini Lane listed by Patricia Dwyer of Cashin Company for $699,000. Much like the Draco property above…it’s an 1890 square foot 3 bedroom, 2.5 bath place. Same lower dues and decent price. Shell Cove has held it’s value pretty well.

Again, I’m thinking these places will sell sooner rather than later…we’ll see!

I was a little surprised at the response this week…I guess alot of us notice that stained glass. It’s, of course, the US Bank in Charter Square at the corner of Beach Park and Shell. Arriving first on the scene on Friday was Haber Tu of Foster City. Haber wins the $30.00 gift card to Chipotle over at Marlin Cove. Also answering correctly were Kali Shih, Edna, Erika, Drink More Water (Sounds like my wife Lesley talking to me!), Sindhu, Nicole, Boom007, Pete and Doug. Thanks you guys!! See you this Friday when we’ll do it all again!

Well, things have certainly changed. The first time I did a chart like this was in April and at that time there was 18 single family homes on the market and 10 pending sales. The next time was in early June and inventory had risen to 31, then fallen to 23 at the time of that posting, with 18 pending sales. Today we’re at a 2008 high of 32 active listings with only 9 pending sales. It’s pretty hard to argue that this is the slowest it’s been so far in 2008 in Foster City and in my opinion it’ll certainly have an impact on prices going forward. Bottom line…it’s a great time to buy here. This is all particularly strange to me as I personally am as busy as I’ve been all year. I’m working with several sets of buyers right now and have a number of listings coming up…and I’ve heard the same story from other agents I know too. I ran into a friend, who’s the broker/manager of an Intero office yesterday and she told me she’s swamped reviewing files on sales that have taken place in her office. Why this isn’t happening in Foster City is beyond me, but I know that there are many anxious sellers in town right now and good deals can happen for buyers who are willing to get off of the fence. Of the recent listings out there right now some really stand out and are worth a look:

1410 St Kitts listed by Sue Dickey of Alain Pinel for $1,349,000 is my favorite in town right now. Really large yard, remodeled wonderfully and in that great Antigua neighborhood. Not too many back yards in Foster City like this and it’s really private too. It’s a great house and if it doesn’t sell quickly I’ll be shocked!

980 Cumberland listed by John Shroyer of Re/Max Today for $1,189,000. I think this house is priced well for a waterfront. It’s clean, yet needs some updating, but it’s a good value for a 4 bedroom, 3 bath house.

540 Trinidad listed by Brooke Dunbar of Cashin Company for $905,000. This house just came on the market late Thursday and I need to take a closer look at it…but I think it’s sure priced right. It’s got a few issues that need to be done on it, but it seems like a good buy to me at that price…particularly since it’s in Pitcairn.

I’m going to be watching these closely…it’ll be intersting!

I’ve always sort of marveled at stained glass, it really is an art form. I drive by this work all the time and always glance at it. I don’t think it’s anything famous or anything like that, but it’s pretty…and it’s nice to look at. If you read my post from yesterday your thinking “before it was slasher horror films, now it’s stained glass…this guy’s weird!”. What can I say? I’m well rounded! In today’s contest I need to know both where this is and what’s in this building. Today’s winner will win a $30.00 gift card to Chipotle Mexican Grill in Marlin Cove. Simply place your answer in the comments below. All the rules of this nutty contest are available on the left hand margin and on the bar above. I won’t publish the right answers until Monday, but I will publish all semi zany retorts, subtle and not so subtle jabs, almost all general silliness, and all wrong answers as soon as I get it. Good luck!

Did you see any of the Halloween movies? The first one was a classic, done on a very small budget in 1978. At the end the bad guy, Michael Myers, get’s shot 6 times and falls from a second story balcony. Upon looking out the window we discover that Michael is nowhere to be found. There are 9 Halloween Movies and in all but one of them Michael Myers meets some kind of grisly end…only to resurface inexplicably in the next movie. This darn guy just won’t stay dead!

It kind of reminds me of the perpetual discussion about a High School in Foster City. I wrote a post about this topic in early April, Foster City High School…Not and at that time a charter school idea had just been dispatched in Jamie Lee Curtis style by the City Council…and then yesterday I read another article about how another group wanting to build the Magnolia Science Academy, a charter high school, were voted down again on Monday night. I kept thinking “I wonder if the idea was shot several times by sheriff’s deputies, which then fell down a mineshaft, which collapsed when the deputies threw dynamite down it. (Halloween 4, The Return of Michael Myers).

Who know’s? Is dead really ever dead? Never say never…maybe one day a proposal with some real merit will be floated that could be approved. I personally don’t think it’ll ever happen, I think the land in question has more value to the city in other capacities going forward. Until then maybe we can get John Carpenter to film this saga?

Here’s a link to the story:

Charter School Story

It occured to me while I was showing property over the weekend that maybe the best thing about this current market is the fact that buyers don’t have to compromise nearly as much as they used to. Fortunately, the old and wise rules about real estate investment have returned…and that’s a good thing! In the past 10 years or so, if you wrote down a list of the top 10 or 15 attributes you wanted in the purchase of a home you might have been lucky to have gotten 2 or 3 of them. People, quite literally, were buying homes they didn’t even like because they were so afraid that an escalating market would price them out. Now there’s something we haven’t seen in a while…choice!

Of course the pendulum has swung pretty far in the other direction right now and many buyers have talked themselves out of making an offer on places they liked because of relatively small, or eminently fixable problems discovered about the home they’re interested in. I heard a story recently about some buyers that backed out of a transaction because they discovered that the seller’s small child had scibbled on a wall with a crayon as they were doing their final walkthrough. It is funny to me, and certainly ironic, that many things that didn’t seem all that important a few years ago take on so much more meaning today. Buyers certainly inspect a home more thoroughly than they used to and there’s more soul searching discussion about moving forward too.

All this circumspection makes me think of a listing I had in Belmont in 2000. The seller, who had grown up in the home, was liquidating it following the death of her parents. Across the street was the back end of a shopping center and there was a ton of garbage, including an old mattress sitting near the loading docks. The house was in original condition and had a rotting front porch, rear deck and an attached storage shed that was literally falling apart. The worst part though was that the painstakingly honest seller had written in the disclosure that “sewage backs up into the house”. “Ummm…could you explain that?” I asked. Turns out the main sewer line for the City of Belmont ran right behind the back fence and when it rained heavily it got clogged up with debris and wouldn’t drain properly…and when that happened all that liquid backed up into the house, sometimes filling up the sinks and bathtub! This was a first for me as a listing agent. “What do you do?” I asked. “We call the city and they unclog it…usually takes 3 or 4 hours, no big deal” She said. 3 or 4 hours of sewage in your bathtub and sinks! It actually had a pretty easy fix but her family had gotten used to it…for 38 years! The moral of the story? We got 3 offers and it went over asking, As Is.

Do you know how grateful I am not to be getting that listing in July 2008! Folks, there’s no such thing as a perfect house so you’ll end up having to compromise on something…but I’m betting you won’t have to accept sewage in your new home in this market.

Yes, it was the dreaded Metro Center. When I was a kid, and I was out here visiting from Colorado, my uncle proudly told me that it was the tallest building between San Francisco and Los Angeles. Whether or not that was ever true…I have no idea. I did marvel at the time because of that somewhat impressive distinction. (For all I know it held that record for 6 months!) Asif Suria answered first on Friday but was ineligible. Congratulations then goes to this weeks winner, first timer Wei-Ling Huang of Foster City! Wei-Ling wins $30.00 in gift certificates to 99 Ranch Market in Marlin Cove. Also chiming in correctly were Erika, Dana, Rob, and Edna. Good job!! Thanks for playing and I hope to see you all back again on Friday.

I saw this image online and just had to use it! I’m asked very frequently “What is a short sale?” so I thought I’d comment. Let’s say a seller has loans on their homes of $700,000, and that seller get’s behind on their payments and is forced to sell to get out from under the burden. Now let’s say that the home’s value has fallen to $600,000. The seller, and their agent, list the house for somewhere near it’s current market value or less and when they get an offer they attempt to negotiate with the seller’s lender, or lenders, to get them to accept less than the full amount of their loan payoff. I don’t think it’s quite as dire as this picture suggests…but it’s no picnic either. There’s a very common perception, that’s been true in my experience, that it can take months for a lender to decide what to do with an offer that comes in asking for them to take a loss. Often a listing agent makes several calls per day to the lender just trying to find the right person to talk to…and thereby leaving lots of messages that never get returned. It’s an extremely tedious battle and often the buyers give up and move on when frustration sets in. Sometimes it all works out too. It’s tough to make plans, spend money on inspections and appraisals…etc, when you don’t really know if you’ll get the property in question.

In Foster City there really have not been many of these sales so far this year and mostly have been confined to the lower price ranges in condos. I’m certainly not trying to discourage anybody from taking a run at a short sale, because there’s plenty of them outside of our immediate area but you should know going in that it could be a long process.

A foreclosure is a bank owned property. It is a sale that takes place after the bank takes the given property back from the seller and after the short sale fails. Typically, it’s less bureaucratic (believe it or not) to buy a foreclosure because now the bank is ready to get it off of their books. I showed a foreclosure today in Redwood City that I thought was a really good buy listed in the low $800’s. It sold a couple of years ago for $1,200,000. Foreclosures like this can be really sad. There were holes in the walls, dirt and grime all over everything, the kitchen was a mess and there was spoiled food in the sink. I really thought you could feel the sadness of the sellers who had lost their home and were, most likely, evicted. Lot’s of times sellers facing foreclosure are not as proactive as they once were about maintaining these houses…and it shows. It’s sad…and it also is an opportunity for a buyer.

Sort of looks like a Transformer, huh? Or maybe I’m just crazier than both you and I think I am.  In sort of a funny, Chamber of Commerce sort of way, it did transform Foster City when it was built. The question for you is…what is it? This weeks winner will receive $30.00 in gift certificates to 99 Ranch Market in the Marlin Cove Shopping Center. Just type in your answer in the comments area below. All the rules of the road are available on both the left hand margin and on the bar above. I’ll publish all the correct answers on Monday morning. All incorrect answers, goofy retorts, snide comments and general frivolity will be published immediately. Thanks for playing…and have a great weekend!