I don’t know, I somehow can’t resist a photo that has a connection with food. Call me zany…I had all these trench photos and I liked this one best.

Alot of my posts are simply my observations about the local real estate market and about Foster City specifically. I really do want to identify these comments as observations rather than fact but they are, in fact, what I experience every day and what my peers are talking about too. So, I thought I’d congeal some of these thoughts into a post in it’s own right.

I think that it’s significantly harder for buyers to get loans in 2008. Nevertheless, you can get a loan if you’re qualified. I’ve seen plenty of buyers forced to wait because they simply are not ready right now. I don’t think that’s a bad thing because buyers are now going to have to afford the home that they’re buying before they buy it. It was simply crazy that folks were buying houses when their sole criteria for qualifying seemed to be “can you fog a mirror?” I think buyer’s need to create a gameplan and save a decent down payment before jumping in now.

I think there are more sellers than “serious” buyers right now. In other words I think there are plenty of buyers out there, but most are on the fence about the decision and as a result sellers are nervous. Oddly enough, there are still price ranges where there really isn’t enough inventory and multiple offers are occuring. For example, try finding a good 3 bedroom, 2 bath house in the $850,000 range…it doesn’t even exist in Foster City at all. On the westside in San Mateo, Belmont or San Carlos it’s very hard,and if something comes up you’ll see multiples.

In case you were not aware of this, there are lots of businesses that exist via the real estate industry. There’s Title companies, Home Warranty companies, direct lenders, mortgage brokers, business coaches, printers, advertisers of all types, website designers…also of all types. Almost all of them have sales people that call on my office…and thus, me. There’s alot less of them this year. A couple of weeks ago one of the big players around here, Financial Title, closed it’s doors one afternoon. Every office…all of their employees were let go immediately. I can’t tell you how many mortgage brokers I know that have either gone to work for a big bank or have changed industries. It turns out 3rd party originators aren’t too popular on the secondary mortgage market so most of the big banks won’t work with brokers like they used to.

I know lots of real estate agents who are really having a terrible year too. Many are stuggling to survive. Strangely though, I know some agents who are having their best year. For my part I’m working harder and making less money. Honestly, I’m really blessed because I’m still selling homes and making a very good living…it’s just not 2005. Buyers want to take more time making their decisions and listings tend to take longer to sell. It’s actually all just a normal cycle in my opinion…it’s happened before and it’ll happen again. The pie has gotten a little smaller and there’s less people able to feed off of it…but there’s still lots of people still doing well. Compared to almost everywhere else this area is doing fine. We had it amazingly good for a very long time…and now we get to adjust. Sometimes that can be painful.

Just when I thought this was going to be the  week for sure…we had a winner! I have to admit, that this one was really pretty hard too! The photo is, of course, the sign for the Beach Park Plaza shopping area at the corner of Beach Park and Marlin. This weeks winner is a first timer, Anu Ramesh of Foster City, who came in with the right answer on Saturday afternoon. Great job Anu! I also have to give credit to Erika Jahnke who also got it right…but on Sunday afternoon. Anu wins the $30.00 gift card to Safeway. This is the second time I’ve used a photo from the area near the bay on Beach Park that has stumped alot of you…you guys need to get over there more often! Thanks for playing folks! See you this Friday!

That sure is a tired old saw, isn’t it? Supposedly, the three most important elements of real estate investment. One of those beaten to death old phrases that causes a smile on everyone’s face because it’s been around so long and is so familiar. It’s such an old fashioned phrase that it got completely taken for granted around here for the last several years, huh? Guess what? It’s back. In the 2008 market, it’s entirely possible that being in the right location is more important than ever.

A client told me last week that her family was encouraging her to buy in Fremont because there were so many good deals on foreclosures and other homes offered by desparate sellers…she wanted to know my opinion. Since 2002 I sold 6 homes to clients in areas in the East Bay or way south in San Jose…all of whom work in San Mateo County. All but one of them have strongly expressed the desire to move back to the Peninsula…and can’t. At the time, their reason’s seemed perfectly sound. They needed more room than they could find in a house here. They didn’t want to live in a condo. They felt like they could handle the commute. Now they all hate it and what it does to their lives and schedules. I’ve received calls from every one of them inquiring about how they can sell and get back here…and here’s the really painful part, they can’t. At least not right now. In one case, he works in San Carlos and she in Palo Alto and they have 2 kids. They made an offer on a 3 bedroom, 1 bath house in San Carlos in 2005 and didn’t get it in a multiple offer environment. It sold for $655,000. They bought a much larger house in Fremont for $650,000 and we all thought all would be well. He called earlier this year and told me how sick of commuting he was, how he was never home and how hard it was to be a part of his kids school activities…he wanted to sell. His house is now worth between $560,000 and $580,000. The same smaller houses in that San Carlos neighborhood are still in the high $600s or low $700’s. He’s not going anywhere, at least for the time being. This story is strangely similar to all of the other 5 clients who also moved out of this area. They all want to move back and can’t.

Here’s an even worse story. A friend and client of mine moved to Manteca, so he could live in a big 4 bedroom house with a pool, a few years ago and commuted to his job in Hayward every morning. He got up at 3:30AM to be at work by 7:30 and typically would get home about 7:00PM every night. He had a heart attack after about 8 months of that schedule. He’s fine, but Manteca sure doesn’t seem as appealing as it once did.

If you’re thinking about moving to a remote location to get a good deal and you’ll need to commute back here I would encourage you to really think hard about that before you do it. If Foster City, for example, experiences a 5 to 10% reduction of value and Fremont, or Blossom Valley, or Hayward experiences 25 to 30% depreciation…you’ll never get back over to this side of the Bay. It’s smarter to live in a condo in Foster City than to buy a house in the East Bay.

Since the last 2 weeks foto contests were so embarrasingly easy (or so I heard from both Lydia and my wife Lesley!) I thought I’d raise the bar a bit this week. Today’s foto comes again from the wandering eye and camera of none other than the City of Foster City’s own Steve Toler. Thanks Steve! All the rules of the road are available on the left hand margin as well as on the bar above. This weeks winner will receive a $30.00 gift card to Safeway in the Metro Center.  Since it’s been pretty darn easy lately the level of jokes, barbs and semi obnoxious comments have fallen drastically…somehow I think this picture could raise those levels a tad! All correct answers, if any, will be published on Monday morning. All the above mentioned stuff, plus all wrong answers will be published as soon as possible. Have fun!

As promised, here’s the chart for the condos/townhouses for the first 6 months of 2008. Strangely, it looks alot like the single family homes chart…with 56 units selling, 14 of which experienced price reductions. The total reduction in value in this segment of the market was 1.52%…again very similar to single family. Interestingly, the unit at 854 Andromeda actually had an original list price lower than the price it got an offer at! It was originally listed for $739,500, raised the price to $759,000 and it ended up selling for $742,000.

Still a tad sluggish when it comes to active listings in this category. 36 active and 10 pending…that’s just slightly better than the last time I looked but not by enough to make any real difference.

Anyway, have fun.

Since I got the ball rolling musically with that Tom Petty Free Fallin post on July 31 I figured it was time for another post with musical accompaniment. I can’t think of anybody more appropriately paired for a Real Estate technology discussion than…George Thorogood! Just click the little button below to add to your reading enjoyment:

 I got a call the other day from a saleswoman working for Realtor.com who pitched me on the idea of advertising on that site. She, of course, had multiple reasons why I would be a complete idiot not to do so. Two things crossed my mind during the pitch, 1) At any of the Real Estate conventions I’ve been to Realtor.com has, by far, the largest presence. Larger than Bank of America or Wells Fargo’s presense. They might have two thousand square feet of floor space dedicated to hooking real estate agents into their program. At the last National Association of Realtors convention I went to agents were lining up to pay for a beefed up presence on Realtor.com. 2) The second thing that crossed my mind was…who uses Realtor.com? I honestly don’t think that I’ve ever had a client, even one time, mention that they search on Realtor.com. I personally never use Realtor.com…do you?

For quite a few years this area, by virtue of it’s technological sophistication, has been blessed to have MLSListings.com. Very few other regions have an actual MLS database available to the public and I know that many of my clients have used that resource over the years. Clients of mine have used my own websites to search, (and they are available via links on the bar above) Honestly, I think that most of my clients use multiple resources to search for homes.

It’s really incredible how many are out there right now! Patrick mentioned in his comment the other day how technology democratizes the process for all parties…isn’t that the truth! Except it’s sort of like the Presidential primaries in Iowa…who the heck is Mike Gravel or Tom Tancredo? Right now we have Homes.com, Homegain, Redfin, Zip, Zillow, Trulia, Movoto, Yahoo, BlueRoof, RealtyTrac, Cyberhomes, a new one called Roost…not to mention all of the individual realtors and their offices that also have search capability. Do you remember how many portals there were in 2000? Alta Vista, Excite, HotBot…the list went on and on. I can’t imagine all of these real estate search sites making it either.

Several of these sites exist, or so it seems, to collect fees from realtors who then will be referred out to consumers…and if that e-harmony like scenario works out another fee will be paid to the website. I went into Homegain last night and signed up as a consumer looking for a 4 bedroom house in 94404, 94070 and 94402. So far I’ve received e-mails from 9 agents wanting to be my best friend. Seven of them are from out of the area and as far away as Alameda, San Jose and Castro Valley. One’s actually from my own office! (I’m sure we’ll be chatting) I did the same thing on Movoto…I’m supposed to get phone calls instead of e-mails from them. YIKES!  The sharks are out!

I won’t be buying advertising on Realtor.com, but I am still curious, do you ever use it? Old George Thorogood is asking the question: Who do you love? I know that whenever I search out of state listings I use Trulia…I like it. Who do you use?

Well, I think it’s safe to say that Friday’s contest was just a tad bit too easy! I actually thought it was going to be a little obscure! For the small percentage of you that were unaware…Friday’s Foto was the seating area for the outdoor amphitheater at Leo Ryan Park. Thanks go to Patrick Au-Yueng for sending me a photo of his son playing there. Sorry you didn’t win Patrick...great shot though! Arriving first this week with the correct answer was Dana Ferri who wins the $30.00 gift card to Portofino Grill. Congratulations Dana! Obvioiusly lots of people use this facility, as evidenced by some of these testimonial answers! Our Church has a twice a year service out there and it’s hard to describe how hot it can be because of that turf…which doesn’t absorb the sunshine. Great place to see a show in the evening though! Many thanks also to Kali, Nicole, Claudette, Alex O, Bill, Chuck Gilooley of WhiteOaksBlog, Asif, Michael, Erika, Sindhu, Richard, Edward Chan, Edna, Bahador, the great and powerful Steve T, Patrick and last but not least, Deepa. 19 correct responses! Way to go folks! Hope to see you again this Friday.

I received a call from a really sweet, very well intentioned young lady the other day who was all excited about the possibilities of buying a foreclosure very cheaply. She had been trolling through one of the 8 million Foreclosures R Us websites and had found several deals that had fired her up. According to her, there was a 4 bedroom, 3 bath house on Halsey in Foster City that she could get for $26,819. If that didn’t come through she was also interested in a 3 bedroom, 2 bath house on Laguna in Burlingame for $12,227 or another house on Ribbon in Foster City for $14,707. Honestly, I’m really not sure what these amounts represent…mostly because I didn’t want to pay the $39.95 required to get more information, but I’m reasonably sure that neither this young lady, or me…or you for that matter, is going to buy one of these houses for those prices.

My suspicion is that we’re seeing a default number on something other than a first loan. Maybe it’s a small second that a homeowner is behind on…heck, for all I know it’s a car loan in default! I just know that in this area people are not buying houses at 1965 era prices. We chatted some more about this topic and inevitably I asked her if she had spoke to a lender about getting a loan…she had not. Turns out both she and her husband have jobs that are basically off the books. He’s a handy man and she walks dogs. They filed bankruptcy 5 years ago and she said they’re about to make their last payment to the IRS clearing them of a debt there too. If necessary they could probably come up with $10,000 for a down payment…as a gift. I hope it doesn’t sound like, in any way, like I’m making fun of these folks. She was sincere and really wanted to get on track. I offered to meet with them and help them create a gameplan that might pay off for them some time in the future, but it’s not going to be now.

It occured to me that just a few years ago there were lenders that probably would have given them a home loan. Stated income, zero down, sub-prime. It would have buried them then like it would bury them now. I don’t believe in get rich quick schemes. If you’re thinking about buying, spend plenty of time and energy creating a financial plan that will allow you to actually afford the home you’ll be buying and forget about the phantom $25,000 4 bedroom home in Foster City.

 No, it’s not the White Cliffs of Dover. Sorry, just trying to think outside of the box a little! This week I’m looking for you to identify what this is as well as where it is. You’ll have the opportunity to really show your “stripes” as a Foster City expert this week! (Sorry, another bad joke…I’m on a roll!) All the rules of the game are available to view on the left hand margin as well as on the bar up top. This weeks winner will receive a $30.00 gift card to Portofino Grill at Edgewater Place. Any and all correct answers will be published on Monday morning. Any fair to good jokes, barbs, semi obnoxious comments and all wrong answers will be published ASAP. Have fun and good luck!

 On May 15 I wrote a post called Technology For Real Estate in which I announced that I had just started a new website provided by a local company that had a product who’s property valuation technology was state of the art and was supposedly far superior to all of the others. Several other agents in my office bought into the same system and after nearly 3 months I’m here to tell you that, in all honesty, that property valuation technology pretty much stinks. In one classic story, a client of a friend of mine in my office called and was all excited because he had discovered that the house he had paid slightly over one million dollars for 18 months ago was now worth $1.2mil. He was ready to sell! My friend studied the comps and told him there was no way he was going to get anywhere near $1.2mil. 

“Who gave you the idea your house is worth $1.2mil?” She asked.

“You did!” the client replied. Her website’s property valuation technology had told him the high number!

 I’m really not trying to pick on the company I signed up with…the fact of the matter is all of these websites featuring instant home evaluations are extremely dubious. I think they’re correct only a small percentage of the time. Here’s some examples locally: 704 Cayman is in escrow with a list price of $1,598,000. Zillow has it at $1,360,000. 321 Bowfin is in escrow with a list price of $1,468,000. Zillow has it at $1,219,000. One of my recent favorites, 1410 St. Kitts is in escrow listed for $1,349,000. Zillow has it at $1,218,000. Last but not least, 897 Lurline is in escrow listed at $999,888. Zillow has it at $1,039,500. These are houses that have sold…they’re not pie in the sky listings with outlandish expectations. Secondly, the mistakes happen in both too high and too low fashion.

There are just too many variables for the valuation algorythms to pick up. In one case I know of in San Carlos an estimate shows a house I sold in 2004 to have less value than it did then. What it doesn’t realize is that the two houses that sold with low prices on that street in the last 3 months were fixer uppers with no view. It has no ability to understand comparables because “instant” is it’s highest value. I think it’s important to understand that many of these sites are “lead capture” systems and seller information is sold to Realtors…and the promise of home valuations is just bait. It always amuses me that many of the agents I see on some of these sites identified as “local experts” have in fact never even sold a home in this area. I know because I’ve checked them out in the MLS database. 

There are so many, many separate variables that add up to value in a home. It often takes alot of detailed analysis, and/or alot of experience in a very small geographic niche to comprehend a properties true worth. It just doesn’t happen with one short “click”.