While we are seeing some positive signs in the early going this year for the Pleasanton CA and Tri-valley real estate market, we have had a slate of negative news nationally, including

* Sales of new homes in the US slumped to a 13 year low in January
* The median price of new homes dropped 15.1 % from January 2007
* Orders for U.S. manufactured durable goods dropped 5.3% in January
* Producer prices, a indication of wholesale prices, jumped 1% in January, and were up 7.4% in the last 12 months, a very troubling sign indicating that inflation may be picking up steam
* Consumer confidence dropped in January to the lowest level in 5 years.

Well, you get the idea. While the real estate market in Pleasanton, Dublin, San Ramon, and Danville seems to be showing some life, the national picture is not good. And this onslaught of negative news does impact people’s confidence in the market, and their outlook in general.

One thing is certain… if you have a secure job, and equity in your home, it is a great time to move up, especially since the lower end of the market is showing (finally) some stabilization, and the upper price ranges are sluggish. There are opportunities galore in the market place, and some very good deals to be had. If you have a long term perspective, it is a fabulous time to explore moving up. The difference in cost between your current home and a move-up home has never been less.

And now, back to our regularly scheduled Pleasanton area housing recovery.

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I just finished a video that features interviews with residents of Pleasanton CA. In this video, various Pleasanton residents talk about what they like best about the city, what they like doing here, and why they like living here. I hope you will find it interesting.

Feel free to pass it on to anyone who might find it interesting. And no, I have no plans to give up my day job.

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The question everyone wants to know in the Pleasanton, Dublin, San Ramon, and Tri-Valley region is “when are we going to hit the bottom of the real estate slump?” This seems to be the source of endless debate among both real estate professionals, as well as the general public. There are no clear answers, and for every argument that we have a ways to go in this downturn, there can be an equally convincing argument that the bottom is getting near.

So what do you think? You can register your opinion on my poll at The 680 Blog. Give it a look and see where your opinion falls.

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One Million Dollars. It’s a lot of dough.

So what does $1 Million buy in housing? Thanks to the real estate correction, the answer is “more than it did 3 years ago”. We all know how expensive the Pleasanton, Dublin, San Ramon, and Tri-Valley real estate markets are. Forbes Magazine shows us what $1 million buys you in 15 different markets across the U.S.

Slide Show: What you get for $1 Million in the U.S.

No real surprises here I guess. If I only liked humidity and bugs the size of small dogs…

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Pleasanton and Dublin CA area residents are well aware of the traffic gridlock that usually greets commuters heading East towards Livermore after 3:00 on weekday afternoons. At times, it seems that walking would be faster than navigating your way through the mess that is I-580.

I am happy to report that the traffic on I-580 seems to be much improved, thanks to the installation of metering lights on the on-ramps. Last week, I had to travel from Pleasanton to Livermore late in the afternoon (around 4:45 PM). I prepared for the usual gridlock and frustration by bringing along a new age CD and practicing deep breathing exercises. What I found was a pleasant surprise to me. Traffic was actually moving… even at 4:45 PM on a Wednesday. Oh sure, it slowed down in spots, and there was the usual assortment of obnoxious people passing on the right, etc. But overall, it did not resemble the usual late afternoon traffic fest on I-580.

Here are some photos I took while driving that afternoon. As you can see, there is actually space between the cars!

P.S., I don’t recommend trying this. Only years of practice as a multi-task expert enabled me to shoot these pictures while driving with my knees, talking on my cell phone, and listening to relaxation tapes at the same time.

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Great. Not only do we have to contend with the sub-prime crisis, the foreclosure crisis, inflation, the price of oil, and the middle east, now comes word that the Burmese Python has established breeding colonies in the U.S., and experts now predict that they could eventually occupy as much as 1/3 of the country, including the bay area and parts of California.

These pythons are currently found in Florida, and experts expect to see them in other states, although it will take a while. They are usually released into the wild by pet owners who no longer want them. (Note to people who have pythons as pets: If you decide you no longer want it, take it to the humane society, or the zoo. Or call Pythons Anonymous. Don’t be an a-hole and just release it into the wild).

But not to fear. Here is a paragraph from the story in USA Today:

The Burmese python is not poisonous and not considered a danger to humans. Attacks on humans have involved pet owners who mishandle and misfeed the snakes, Snow says. In Florida, they eat bobcats, deer, alligators, raccoons, cats, rats, rabbits, muskrats, possum, mice, ducks, egrets, herons and song birds. They grab with their mouth to anchor the prey, then coil around the animal and crush it to death before eating it whole.

Okay, I’m no wildlife expert, but how can any animal that can eat a bobcat, deer, or alligator whole not be a threat to humans? I’m sorry, but if someday I am hiking the Pleasanton Ridge, and I see one of these things swallowing a deer whole, I’m pretty much heading the other way…. rapidly.

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Information is power.

If you are buying a home, and you find a home you are interested in, I always suggest that you talk to the neighbors the first opportunity you get. We all know the classic “nosy neighbors” who make it their business to know everyone else’s business. Gladys Kravitz on Bewitched and any of the characters on Desperate Housewives are prime examples. While these people can be very annoying to live near, they can be your best source of information when you are evaluating a neighborhood. You see, neighbors have information, insights, and knowledge that comes from actually living in the neighborhood. They know far more about traffic patterns, kids in the neighborhood, what the residents are like, crime, nuisances, pending changes or developments that might impact the neighborhood, barking dogs, and other factors you might not consider. Go by the property on a weekend day, or after work and see if you can catch some of the neighbors mowing their lawns or in their yards. Don’t be afraid to knock on their doors and ask for their input. It is far better to find out about potential problems or drawbacks before you close escrow. Generally, neighbors are very forthcoming with information, and will point out things you should know.

One point of caution, however. It is probably best to do this after you have an accepted contract on the house, especially in a hot market. Otherwise, you run the risk of letting on just how interested in the neighbor’s house you are. And if the neighbor has a friend or someone they know interested in the house too, they might alert them to the fact that you are considering making an offer. Or they might tell the seller how interested you seem, which could inflate the seller’s expectations. So play it safe and
visit the neighbors after you have an accepted contract. And one side benefit is you might learn who not to share information with after you move in.

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If you have been following the Pleasanton real estate market these past few months, you know that bears are not the only animals in hibernation. Home buyers have been hibernating as well, forced into hiding by a seemingly unending wave of bad news about the national real estate market. Oh sure, buyers made occasional inquiries and even wondered into an open house or two, but for the most part they have been content to sit on the sidelines and see where things go.

Well, it looks like the hibernation might be ending. Home buyers are starting to venture out. Traffic is up at open houses, and more and more buyers are starting to explore some of the opportunities in the market. There were 15 pending sales the first 10 days of February, compared to 24 pending sales for the whole month of January. Even more telling is some of the pending sales activity. 10 of the 15 were on the market for 35 days or less. And a couple of these homes even had multiple offers.

Now, before we get ahead of ourselves and declare an end to the housing slump we need to keep this in perspective. Early spring often sees a jump in activity. And certainly the recent reductions in short term rates by the Fed, along with the increase in the FNMA conforming loan limits, have helped some buyers off the fence. It remains to be seen how we fare in Pleasanton as we get into the Spring months. It is still VALUE that rules the day. Homes must be in great condition, prepared for the market, and most importantly priced to attract attention from finicky buyers. But the early signs are certainly encouraging…

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Interesting case in San Diego, where an unhappy home buyer is suing their Realtor, alleging that they overpaid for their home because the Realtor withheld sales information that indicated a lower value for the property they purchased. Here is a short segment from The Today show explaining the background.

Certainly, no one likes to purchase a house and find out that the value has declined. However, Realtors don’t control the direction of the market. And there is no state law that homes in California can only go up in value (as if we all needed to be reminded of that right now).

If, as alleged, their Realtor purposely withheld relevant information (for example, pending or closed sales on the MLS) with the intent to deceive the buyer, then they have every right to be upset and to seek recourse. The Realtor has a fiduciary responsibility to represent his/her client’s best interest, and if the agent did in fact withhold vital information then they should bear the consequences.

On the other hand, the buyer should take some responsibility for their transaction. The internet is a very powerful tool, and there are multiple channels available for consumers to do their own research on real estate. Sites such as CyberHomes.com, Zillow.com, and others exist where consumers can get neighborhood sales, estimates of value, and other relevant information about any property.

Lastly, real estate is not something that is easy to quantify. There is always a range of value, even within a neighborhood. Factors like upgrades, market conditions, appeal, lot size, location, and even the direction the home faces can have an impact on the sales price of the property. Just because a home sold for less than the subject property does not mean that the subject property is worth less money…. any of these factors can effect the final selling price of the subject property (up or down, for that matter). In this case, just because there were a couple of sales at a lower sales price than the property in question does not in and of itself mean that the buyers were deceived or misled. From a real estate perspective, a property is worth what a willing buyer is willing to pay, and what a willing seller is willing to sell for. And that figure can range depending on the buyer, as most buyers have different factors they value.

I am not an attorney, nor is my intent to comment on the specific allegations of this suit. But it is an interesting case, and one that is fairly topical at the moment given the sluggishness of the market. In a fast moving market like we are in now, it begs the ultimate question…. How do you really tell the value of a property?

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The Pleasanton CA real estate market continued on a slow and steady trend in January, as rainy weather and the dark clouds of bad news on real estate and the economy dampened most buyer’s moods. Fears of a recession and dismal national real estate news were instrumental in prompting the Federal Reserve to again lower short term interest rates by 3/4%, which is certainly good news for mortgage rates in the short term. And the impending stimulus plan being proposed in congress, but not yet signed into law, brought even more hope that the bottom of the cycle is near. Perhaps most significantly, the much discussed increase in the FNMA loan limits, which are currently stuck at a laughable $417,000, seemed to pick up steam, with speculation that an increase into the low $700,000’s for the Bay Area was being considered. This figure, which is based on 125% of the area’s median home price, might be the spark everyone is hoping for to signal the end of the home price declines. As the Senate and House reconcile their stimulus bills, it is not yet certain that an increase in the Federal conforming loan limits is imminent. But most industry insiders are hopeful that the increase in the loan limits will become a reality. All of this is prompting cautious optimism that we will see some stabilization in the Pleasanton area real estate market as we go into the Spring market.

Overall in January, pending sales remained at a low level, ending the month of January at 25 pending single family home sales, up from just 24 in December. The inventory at the end of January rose to 159 single family homes on the market, up from 136 at the end of December. This is still a low inventory figure, although it is expected to rise as we enter the Spring. (click on graph to enlarge).

In the under $1 Million market segment in Pleasanton, pending sales declined in January, ending the month with 14 pending sales, as compared to 17 in Decembr. Inventory rose, with 81 single family homes on the market at the end of January, as compared with 69 at the end of December. (click on graph to enlarge).

The $1 million to $2 million market segment saw an increase in pending sales, with 10 pending sales in January, up from 5 pending sales in December. Available inventory of homes in this bracket rose from 43 available homes at the end of December to 50 available homes at he end of January. (click on graph to enlarge).

In the $2 million plus market segment, there were no pending sales in January, a decrease from 1 pending sale in December, and 9 and 4 pending sales in October and November respectively. Inventory rose slightly, with 28 homes on the market at the end of January, up from 26 at the end of December. (click on graph to enlarge).

Look for both inventory and sales activity to pick up as we get into March and April. Lower interest rates, along with the possibility of the increase in FNMA loan limits, seem to be prompting more buyers to start looking. Most agents are reporting an increase in traffic at Open Houses, and there seems to be more inquiries from potential buyers. While this is no guarantee that sales will increase, it is certainly a good sign. Another positive sign is the emergence of “vulture funds”, where investors seek out bargains on foreclosed properties. This is a signal that at least some professional investors feel we are nearing the bottom of this down market.

Stay tuned… the next couple months promise to be interesting. And yes, there are some excellent purchase opportunities in the market.

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