Okay, we’ll take it. Good news is not that easy to find right now, so beggars can’t be choosers!

Share This

Share This

There are 4 basic floorplans in The Preserve, ranging from 3400 sq ft to over 4300 sq ft. The Laurel is a single story floorplan with approximately 3420 sq ft featuring 3 bedrooms (all suites), with a den/optional 4th bedroom. A second single story floorplan with 5 bedrooms and 3 1/2 baths was added after the initial phase, with approximately 3600 sq ft. This model was mostly built on sloped lots, and a downstairs bonus room was usually added in this event. The Le Blanc floorplan features 4 bedrooms plus a den, 4 1/2 baths, and approximately 4000 sq ft. The largest floorplan is the Mounier, which features four bedrooms plus a loft and den, with approximately 4350 sq ft. Some of these floorplans offered expanded bonus space over the detached garage, which brings the square footage of this model to almost 5000 sq ft. These homes feature both 3 and 4 car garages, and lot sizes typically range from 1/3 to over 1/2 acre, many with views of the valley and/or backing to open space. Many of the homes in The Preserve feature detached guest houses, from studios to 2 bedroom, 1 bath units up to 800 sq ft. This is a highly desirable feature to many buyers. Prices in The Preserve range from $1,500,000 to over $2 million.

Kolb Ranch Estates is a pocket of high end semi-custom homes and lots within The Preserve. They range from 4500 sq ft and up, on 1/2 to 2/3 Acre lots. These homes were built in 2007, and are in the $2 million to $2.5 million price range. There are also custom lots for sale in the $1 million range. There are also a handful of custom homes at the end of Crosby Dr that were built in the last 5 years.

Buyers are attracted to The Preserve because of its incredible setting, topography, and views of the ridge and the valley. It is also extremely convenient to all major commute points, including BART, I-580, and I-680. Buyers who are commuting to Oakland, San Francisco, and the peninsula are especially attracted to the location because of commute considerations. Values in The Preserve have held up reasonably well in the current market, and there seems to be strong demand for homes in this neighborhood.

Here is a video tour of The Preserve and Kolb Ranch Estates:

A Video Tour of The Preserve & Kolb Ranch Estates, Plesanton

Share This

In Pleasanton, there were 30 pending sales in October, down from a strong 55 pending sales in September. Actually, that is not bad considering the climate of fear that prevailed throughout much of the month. But there is also a growing sense among some of the smart money that we may be closer to the bottom of the real estate market then many people think. And there are some great buys out there. Inventory overall dropped slightly, with 231 single family homes on the market at the end of October, as compared with 236 homes on the market at the end of September. (Click on the graph to enlarge)

In the under $1 million market segment, activity was down strongly. There were 21 pending sales in October, as compared with 37 pending sales in September. Inventory remained roughly the same with 122 single family homes on the market. (click on graph to enlarge)

In the $1 million to $2 million market segment, sales dropped from 15 pending sales in September to 7 in October. No doubt the gyrations in the financial markets had an impact on some buyer’s down payment funds. Inventory remained steady at 78 homes on the market, or a 10 month supply. (Click on the graph to enlarge)

In the luxury home segment over $2 million, there were 2 pending sales in October, as compared to 3 in September. Inventory dropped in this price segment to 31 homes on the market at the end of October, as compared to 37 at the end of September. Certainly some of the sellers decided that this was not the market they wanted to play in, and opted to wait for a better market to sell. Still, there is a 10 month supply of homes in this price segment, and it continues to struggle along. (Click on graph to enlarge)

Hopefully with the election, we can turn the page and get on with the recovery. Opportunity is certainly out there, and smart buyers with stable jobs, good credit, and strong assets are finding the market to be ripe with good values.

Share This

The development was built by Morrison Homes starting in 1964. It is in the geographic center of the city, bordered by Santa Rita Rd and Hopyard Rd, and stratteling Valley Ave and Black Ave. The homes themselves range from 1500 to over 2500 sq ft. “Birdland” is a section of Pleasanton Valley North of Valley near the Sports Park. It is so named because most of the streets are named after birds (Blackbird Way, Woodthrush Dr, Raven Rd, etc). The lamplight area is adjacent to Harvest Park Middle School and Walnut Grove Elementary School between Valley & Black Ave. It is so named because there are distinctive lamp posts in the front yard of each home. And Creek’s Bend, located off of Del Valle Parkway closest to downtown, features a picturesque creekside setting.

Most of the homes have been upgraded and remodeled through the years, and there are abundant mature trees giving the area a charming feel. There is strong demand for homes in Pleasanton Valley that have been upgraded. Homes that are in mostly original condition are somewhat more difficult to sell, but if they are priced to reflect the condition they can also sell fairly quickly. It is the classic “Eight is Enough” feel of the neighborhood that attracts buyers, especially buyers looking for mature, private lots. The lots here typically range from 6500 to 8000 sq ft, with some lots in the 10,000 to 12,000 sq ft range. The floor plans are good, and easily adaptable for remodeling or expanding. Pleasanton Valley is definitely an “in-demand” neighborhood, and might even be improving with age.

Here is a video tour of Pleasanton Valley

Share This

I hear a lot of buyers say “I’m going to wait for the market to bottom out before I buy”. As a result, there is tremendous pent up-demand for housing in our area. All we need is for some definitive news that we have hit “the bottom” and there will be strong activity in the market. But finding “the bottom” is often harder than it seems. Unfortunately, there is no magic formula to alert us when we have hit “the bottom”. At that point, we are wondering “Is this the true bottom, or is it just a pause in the downward trend?”. The only way to know will be to wait and see, and if the market did in fact hit the bottom, and starts to trend up you will have missed it. In fact, the only way to know that you have hit “the bottom” is when you are well into the recovery.

Take a look at the above illustration. Everyone wants to buy at point “B”, which is the bottom. But actually buying there is more of a matter of luck than anything else, since at that point in time the market still seems to be going down. The reality is that most buyers who are waiting for “the bottom” end up buying at point “C”, which is well past the bottom. At this point, there are clear indications that the bottom has been hit. But due to pent-up demand from all the other buyers waiting for “the bottom”, the market has actually rebounded a little and is starting to trend up. In reality, you are better off buying at point “A” than point “C”, even though prices are still coming down. Why? Because if you buy at point “A”, you have several advantages:

* You have little or no competition for the house you want. Thus, you are in a better position to get a better price.

* You have the luxury of choice, and can find a home in a prime neighborhood that in normal market conditions would sell immediately, perhaps before you even had a chance to view it.

* Depending on the situation, you have less pressure to rush through inspections and gloss over potential issues with the property. You will have time to evaluate the condition and address any concerns you have. And the seller is much more likely to accommodate you if any property issues need correction.

If you buy at point “C”, you have missed the market. At that point, you are in a weaker position because:

* You have competition from other buyers who were waiting for “the bottom”. You will likely pay more for the house because of it.

* You have less choice in available homes as the market heats up. And prime properties in the best neighborhoods will sell quickly, sometimes with multiple offers

* You will be more inclined to make concessions on the condition of the home, as you will be under pressure from other potential buyers

* The seller also knows that we have hit “the bottom”, and is expecting prices to rise. This will raise their expectations, as well as the price they are willing to now accept

The fact is Real Estate is a long term proposition. If you are planning on staying in your house for 5 years or so, it is not crucial that you find the bottom of the market. I purchased my last 2 homes at the “top” of the market each time (in June of 1989, and July of 2000). And both houses have at least doubled in value, even if they declined in value after I purchased them. If you are a believer in market timing, I overpaid for both houses. And it is the best thing I ever did. In the long run, local real estate is very desirable, and given the long term growth in area population, job growth, and future restrictions on housing development, real estate will be in demand. So if you want to buy a home or move up into a larger home, now is a great time to do so, even if prices are still trending downward. Do it now before we hit “the bottom”, and you will be better off in the long run.

Share This

Share This

So what accounts for this strong showing in the face of negative news? In my opinion, it is several factors

* Pleasanton remains a highly desirable community, with excellent schools, good commute access, strong job base, outstanding quality of life, clean, well manicured neighborhoods, and a charming downtown.

* We are still seeing a fairly consistent migration from the South Bay/Fremont to this area. Buyers are looking for good schools and safe neighborhoods

* The market here is more stable than many others in the outlying areas. Pleasanton has yet to be inundated with large increases in distressed properties for sale.

* Home values are attractive. While the market is certainly more stable than other areas of the East Bay, prices here have definitely dropped over the course of the last 2 years, and this creates opportunities for buyers to get homes in prime neighborhoods at great prices.

Inventory is down because some sellers have decided they don’t want to participate in the current market environment, where demanding buyers are extremely cautious and looking for prices that reflect the current reality. There is no getting around it… buyers demand value today, or they are just as happy to wait. But when a home is a great value, there is interest from buyers. And the more motivated sellers are willing to swallow hard and sell their homes at a price that is attractive to buyers.

The under $1 million market saw a sharp decrease in inventory, with 121 single family homes on the market at the end of September, down from 148 at the end of August. Pending sales were about the same, with 37 pending sales in September, down from 38 in August. (click on graph to enlarge)

The $1 million to $2 million market saw an increase in pending sales, with 15 pending sales in September, up from 9 pending sales in August. Inventory edged down to 78 single family homes on the market at the end of September, as compared with 83 in at the end of August. (click on graph to enlarge)

In the luxury home segment, inventory edged up, with 37 homes on the market at the end of September, as opposed to 33 at the end of August. Pending sales were basically flat, with 3 pending sales in September. (click on graph to enlarge)

Here’s hoping we can see some stabilization in the financial sector soon so we can see better days ahead.

Share This

Check out this article from the New York Times originally published in 1999. It’s hard not to escape the conclusion that this whole mess was predictable. When you give loans to people who can’t afford them, you shouldn’t be surprised when they stop paying.

And check out this video on YouTube.

While it is produced by the Republican National Congressional Committee, it is nonetheless a stinging indictment of our politicians. And I’m willing to bet that plenty of lawmakers on the Republican side were getting campaign contributions from Fannie Mae & Freddie Mac.

Housing has been subsidized by the Federal Government for decades… it has always been considered important to have a large percentage of the population owning homes. It adds to the stability of our society since more people have a stake in the success of our system. It also creates lots of jobs. And while these are certainly worthwhile goals, something changed under the Clinton Administration, and subsequently the Bush Administration. There was a definite policy shift in Washington. Previously, Fannie Mae & Freddie Mac purchased loans based on sound and prudent underwriting. Loans were made on the basis of the borrower’s ability to pay. They even required (get ready for this one) downpayments from borrowers! But the politicians decided that wasn’t good enough. The rules were changed and political pressure was exerted to open up home ownership to more Americans, whether they could afford it or not. And a lot of people got rich doing it, creating a house of cards that is now tumbling down.

This writer from Edgelings.com hits the nail right on the head in my opinion:

From where I sit, the United States government has embarked on two pieces of social engineering in the last few years. One was to make oil expensive as expensive as possible to drive people to greater use of alternative energy sources - because anything less would be irresponsible and destructive to the environment. The other was to enshrine home ownership (i.e., easy-to-obtain mortgages) as a new American right - because anything less would be unequal and racist.

None of us voted on these decisions - indeed, neither was even spoken about directly, much less debated. But nevertheless, both became national policy… and both have sparked national, now international, crises. Then, once they became crises, both were blamed on ‘greedy capitalism’, instead of what they really were: legislative interference into market forces.

Now our wonderful politicians have pledged a staggering amount of money to try to turn the tide. I guess time will tell if it works. Seriously, how do these people keep their jobs in Washington?

Share This

In terms of mortgage rates, the good news is that the conforming loan market is doing pretty well. Conforming loans are loans up to $729,750 (recently raised this year from $417,000) that conform to Fannie Mae & Freddie Mac guidelines. We all know how well those guidelines worked out, but I digress. For loans in this category, rates are still very attractive, mostly in the 6% to 6.25% range with 0 pts. There are slight adjustments for your FICO score. Borrowers with gold credit (i.e. high FICO scores) get a better rate. And you can still get 90% loans in this category, so as long as your credit is good and the loan amount is under $729,750, it is still relatively easy to get financing if your credit and income is good.

There are low down payment loans available as well. FHA loans up to $729,750 are at slightly higher fixed rates (6.625% range today) with 0 pts, although there is a Mortgage Insurance premium of 1.25 to 1.5 pts. The benefit here is that you can put as little as 3% down, so for buyers without large down payments the FHA program is the way to go. The other benefit is that there is no minimum credit score, so borrowers with lower credit scores can still get a loan with a low down payment.

It’s the market for loans over $729,750 where the market is struggling. The reason is simple - there are not many buyers for jumbo loans, and so the buyers demand more return (a higher rate) to entice them to take the risk. Right now on loan amounts over the conforming $729,750 loan amount the fixed rates are in the 8% range. And the buyer has to put more money down, with lenders typically demanding at least 20% down on loans up to $1 million, and 25% or more down on loans over $1 million. And underwriting guidelines and required credit scores have tightened as well. Gee, it’s as if the lenders don’t event want to lend the money. Most borrowers today in the jumbo loan category are moving towards interest only product, which is much more attractive. Right now on jumbo loans you can get a 5/1 interest only ARM (Fixed for 5 years, then turns into an adjustable rate loan) or a 7/1 interest only ARM in the 6.5% range. This is obviously a much more attractive alternative to the fixed rates available for jumbo loans.

Another common strategy in the jumbo loan market is to package a fixed and an equity line loan to finance the property. Let’s say the borrower wants to borrow $1.2 million and put at least 30% down. The borrower can get a conforming $729,750 first loan at say 6%, and also get an equity line of credit at 4.5% (prime rate minus 1/2%) today for the additional amount to bring the total loan amount to $1.2 million. The blended rate in this case would be 5.41%. Of course the equity line is a variable rate loan, and will adjust with the prime rate. But if short term rates are likely to remain low, this is not a bad option.

Other changes in the mortgage industry include:

* The jumbo conforming max loan amount is currently $729,750. However, this is set to expire at the end of this year. The current betting is that it will drop down to $615,000, although nothing is finalized yet.

* Credit underwriting has tightened up significantly. Income ratios have dropped, meaning lenders will allow less debt for every dollar of income. And credit scores have become very important in your ability to get a loan, and what rate you will pay

* Lenders have been requiring higher down payments, especially for investor loans and jumbo loans. Higher down payments can mean lower interest rates.

* FHA minimum down payments are expected to rise from 3% to 3.5% at the end of the year.

Overall, with the Fed pumping millions of dollars into the banking system to stimulate lending, there should not be significant upward pressure on rates. But the key question, especially in the jumbo loan market, is when are investors going to start buying jumbo loans again? Until there are more buyers for jumbo loans in the secondary market, the rates will remain high and the market will be volatile.

Share This