Real Estate Discussions with Mike Silvas

Things continue to improve

Mon, 27 Jul 2009 18:28:00 GMT

I haven't added a post in quite a while as things have been pretty static since my last.

We hit bottom and propeties at the lower end of the market are literally flying off the shelves. We are seeing multiple offers from investors competing with first time homebuyers and frequently the winning offer is well over list price.

That being said however the higher end of the market is moving in fits and starts. Sonoma County is more active and seeing better sales than in Napa County so far, but we are beginning to experience more activity in Napa as well.

Unfortunately the politicians, bureacrats and regulators have run amok in an effort to protect us from ourselves and those dastardly lenders out there trying to bilk us for everythig we are worth. Lately, everytime we turn around there are new regulations to comply with. First it was the appraisal process and now effective July 31st there are new rules being imposed on lenders that will create delays and confusion in some transactions I'm sure.

How can I be so sure, because the new regs are hard for the lender to explain to us so how easy is it going to be for the average consumer to comprehend?

There will be a learning curve and then an adjustment period and then we will all get used to the new systems and just advise our clients accordingly.

It is actually kind of funny. In the 70's when I began selling real estate many of the things we are being asked to do today we did as a matter of course back then.

So how does the future look? Well last week I read an article that mentioned the fact that 5 or so years after we come out of a cycle like this one, people look back and lament the fact that they didn't buy back then when things were so cheap.

Interest rates are at levels from the late 60's early 70's, values have fallen anywhere form 15%to 50% depending on the location and price range of the property. Our local housing inventory for sale is dropping and the population continues to grow and they still aren't making any more land and finally we all need a place to live and making house payments, even if you owe more than the property is worth is better than paying rent. Eventually that too will turn and you will be rewarded for hanging in there by building equity again, both by paying down the loan and the property appreciating again.

I bought my first house in Ventura County for $23,000.00, that home today is worth over $300,00.00 even in today's market. We aren't going back to those values.

Bottomed out in North Bay and Napa and Sonoma Wine Country

Mon, 27 Apr 2009 17:17:00 GMT

Well we finally have reached bottom. In fact we have probably passed the bottom of the local real estate market. If you were waiting for it, you missed the bell, oh yeah they didn't ring a bell.

So how do I know, 36 years in this business and experience with 4 other major downturns. Sure there will be more foreclosures coming on the market, but they are being snapped right up, frequently with multiple offers.

While the job market continues to be challenged, some 90% of folks are working and fear is subsiding. The government isn't getting it all right by a long shot, but at least they are doing something and it feels different.

The media is starting to talk about it and they are always late in getting things reported.

I am not an economist and this isn't a scientific observation by any means, but by the time they get all the data and do their projections, they are two month's behind the curve. Look at the data being reported lately. It is for February and we are on the cusp of May.

So what to do now? Well if you are a buyer there are some real values out there and interest rates aren't likely to get much lower. But you need to speak to a lender and find out what you can afford, then shop with confidence.

Seller's on the other hand, unless they are a bank or asset management company, are hanging on a little too long and too many have trailed the market downward. Be realistic about the comparable values out there. Six month's ago is too long to measure value by. Two or three month's tops and you need to be competitive, either by price, condition, location or a combination of all three. It is still mostly a buyer's market and they have the leverage. If this is too tough to do, then you aren't a real seller in today's market. Give it another month or two then see what is going on.

Isn't technology wonderful, I can tell you what your Realtor can't face to face because they don't want to offend and the truth is hard to hear right now.

We have the tools to help you analyze your circumstance, the marketability of your property and the competition, then you have to decide based on the facts about what action to take, whether buying or selling.

Property Reassessment Scams, Don't be a Victim

Mon, 09 Mar 2009 16:16:00 GMT

The scammers are back! Once again, property owners throughout California are being targeted by a number of private companies who are taking advantage of people during these tough economic times.

These companies, with names and mailers designed to look like official governmental documents, are soliciting fees ranging from about $80.00 to more than $200.00 to file a homeowner's request for a reviewof their property’s assessed value for the current tax year, presumably to obtain a lower tax bill on a lower valuation. While they usually prey on the elderly, immigrants and others who may be confused about how property taxes work, these companies are now sending mass mailers to most homes in California.

These official looking mailers are usually printed on a legal size form that contains the homeowner's name, address and current property assessment information preprinted on the form (which are available from public records). These solicitations may also include an estimated tax savings of hundreds or thousands of dollars. Some of the solicitations even create a false sense of urgency by stating that the property owner must comply by a certain date or there will be a penalty of an increased fee for the service.

The reality is that homeowners can request a reassessment of the value of their property at any time and do so directly with the County Assessor’s office – for free.

Virtually every County Assessor has a system for property owners to request a re-evaluation of their property’s value. The Assessors will have forms in their offices, and most have the forms online. The form may be called something like a “Decline in Value” form. Most counties have these forms available in several languages.

In many cases, the property owner can complete the form online; or they can also download and print a paper copy of the form, complete it and either fax, mail or hand deliver their request. Most County Assessors accept most of these methods.

If their request is found to be meritorious, the property’s assessed value will be reduced. If the request is ultimately denied, in most cases the homeowner still has the option to file an appeal before a county appeals board.
ALL OF THIS IS RELATIVELY EASY, FREE -- AND DOESN’T REQUIRE THE HELP OF ANY PERSON OR ENTITY TO ASSIST FOR A FEE.

Artisan Group Winter Luxury Report

Mon, 29 Dec 2008 17:24:00 GMT

artisan

That’s the concept behind The Artisan Group, a collaboration of high profile, independently owned real estate companies located in Northern California and Nevada. This alliance covers eight specific areas, reaching from picturesque Carmel north to Napa and Sonoma and from cosmopolitan San Francisco west to the high-alpine environment of Lake Tahoe. By joining together, the individual brokerage firms cast a greater net across the Bay Area, providing their clients with expertise in many areas rather than just one. The collaboration also gives the individual firms an edge over their mainstream competition. The group maintains its personal service and dedication to catering to the luxury market. No matter where customers decide to buy or sell, The Artisan Group will be able to connect them with a professional that specializes in their targeted region.

At the Artisan web site (www.artisangroupre.com), customers can email questions to an Artisan concierge who in turn connects them with an appropriate agent. This customized home-buying strategy assures that customers will be connected with agents that are current on local market conditions and are knowledgeable about the neighborhoods, schools, shopping, zoning, and commuting conditions in their communities. For sellers, the expanded network delivers additional exposure for their property. Rather than just being listed by one firm, the listing will be shared with the family—27 real estate offices and a network of more than 1,000 agents.

Welcome to Our Extended Family

Having A Well-Connected Friend Is Good,

But Having A Well-Connected Family Is Golden.

The Artisan Group

Winter 2008 | Artisan Group Luxury Market Report | Page 1

The Artisan Group

Bailey Properties

Bailey Properties is the premier broker in Santa Cruz County, delivering upscale services to buyers and sellers of distinguished coastal properties. Established in 1974, the company currently offers four offices and a team of over 135 experienced professionals to assist the discriminating client with their specific interests and concerns. Services include financing, property management, relocation services and asset management.

831.688.7434 |831.426.4100 |831.438.2300

www.baileyproperties.com

Chase International

Chase covers the Lake Tahoe/Reno area with a team of 160 sales associates working from five offices around the Lake, one in Reno, Truckee and Squaw Valley and an international office in London. Focused on luxury real estate, Chase offers a portfolio of homes ranging from lakefront estates to slope-side retreats.

866.233.7111

www.chaseinternational.com | www.chasenation.com

Empire Realty Associates

Empire’s nearly 100 full-time agents, based in Danville and Walnut Creek, specialize in property sales from condominiums to single-family homes to multi-million dollar estates throughout Contra Costa and Southern Alameda Counties. Empire’s agent-partner ownership believes the consumer is best served by a locally owned company with deep roots in the community.

925.217.5000 • 925.465.2000 | www.empirerealty.com

The Grubb Co.

This full-service boutique agency has served families in Piedmont, Berkeley, Oakland, and Kensington since 1967. A team of 60 agents work from two offices, Oakland and Berkeley.

510.339.0400 • 510.652.2133 | www.grubbco.com

Morgan Lane

Specializing in luxury properties in Napa, Sonoma, Marin, and Monterey Counties, Morgan Lane has 10 boutique offices with 75 full-time realtors serving more than 30 communities.

707.225.3775 | www.morganlane.com

Paragon Real Estate Group

From two facilities, Levi Plaza and the Civic Center, Paragon agents help their customers navigate San Francisco’s many neighborhoods. Passionate abouttheir city, they offer expertise in all areas—from the desirable Pacific Heights to the up-and-coming South Beach.

415.738.7000 • 415.565.0500 | www.paragon-re.com

www.ArtisanGroupRE.com

Winter 2008 | Artisan Group Luxury Market Report | Page 2

artisan artisan

artisan

luxury

Luxury Market Report

Winter 2008

Santa Cruz & Surrounding Cities
| Bailey Properties

The luxury home market in Santa Cruz County reflects the market conditions being experienced across the Bay Area and Central California. As a second home, beach resort area, and a commuter market, Santa Cruz County is heavily influenced by the Bay Area. The current buyer to active seller ratio in the luxury home market is approximately 1 buyer for every 10 active sellers. This has created a market ofopportunity for the luxury home buyer. There are many unique and exciting coastal and beach properties currently on the market. The quality homes that are priced competitively are selling, market forces have never been better for the buyer considering a luxury coastal home. The ocean, beach environment, and quality of life create a strong foundation for the Santa Cruz area luxury home market.

Lake Tahoe, Reno & Truckee
| Chase International

Serving the Reno-Tahoe-Truckee area, our market includes Lake Tahoe, the Washoe and Carson Valleys in Nevada and the Sierra Valley north of Truckee, California, as well as Alpine Meadows, Squaw Valley and Northstar ski resorts. At the mercy of our buyers’ travel schedules, average days on market for our homes are higher than in areas where primary buyers are purchasing their permanent residences. For well priced, well presented homes, we see fairly quick sales, sometimes with multiple offers. Overall, since June, prices have dropped as sellers become more realistic about market conditions. Northstar-at-Tahoe demonstrates the strongest area for high end sales (with 11 current escrows on the new Ritz Carlton Residences), and Tahoe Donner shows the most units sold. Our biggest listing is gorgeous Tranquility, on the east shore of the Tahoe Basin, at $100,000,000. Reno, where short sales and foreclosures are about 50% of the for-sale market, offers great deals for home buyers and investors. Year to date, the highest lakefront sale is $32,500,000, and Chase International represented all sides in two recent lakefront sales totaling $9,372,500 in sales volume. Because of that, inventory is decreasing, reflecting brisk sales activity. We currently have the best opportunity for buyers that we’ve seen in years—great selection, great prices, great interest rates.

Winter 2008 | Artisan Group Luxury Market Report | Page 3

Diablo, Lamorinda & Tri-Valley Areas |
Empire Realty Associates

Empire Realty serves the greater Diablo Valley and includes the towns of Orinda, Moraga, Lafayette, Walnut Creek, Alamo, Danville, Diablo, Blackhawk, San Ramon, Dublin, Pleasanton and Livermore. In the third quarter of 2008, there were a total of 86 homes sold from $1.5 million and up. The average number of days on the market was 45 and the average list to sales price was 95%. In the $3.5 million + category, there were four sales in Alamo, one in Diablo, and one in Pleasanton. The average price per square foot of sold properties over $1.5 million ranged from $303/SF in San Ramon to $625/SF in Diablo. Presently, Empire’s highest priced listings are a newly constructed, 6300 SF Santa Barbara, Spanish style home located in the Westside Danville hills offered for $4,750,000 and an exquisite, French Normandy style home in Alamo with 7400 SF offered for $4,999,998.

The excellent schools, picturesque topography, and convenient commuting options continue to attract transferring, executive buyers and local move up buyers…. often with all cash offers or large down payments. In general, sales have been hampered by the scarcity of jumbo loan products and the tougher underwriting standards. Discerning buyers prefer new or newer construction homes with large, private view lots to accommodate a pool and outdoor entertainment areas. Architecturally, Santa Barbara Mission and Tuscan styles remain popular…with an emphasis on indoor/outdoor living and a casual elegance reflecting the East Bay climate and lifestyle.

Oakland, Piedmont & Berkeley
| The Grubb Co.

News of the Death of Real Estate in The GRUBB Company’s market of the Oakland Hills, Berkeley, Piedmont, Kensington, Albany and El Cerrito Hills has proven to be premature. Throughout most of the year, we have experienced lower than expected inventory punctuated with surprisingly strong demand particularly in price ranges of $500,000 to $1,200,000. We have also set new record highs in our area with sales in the $8M range, which has never been previously experienced. There has certainly been a significant reduction in the number of properties selling with multiple offers. However, demand remains strong with an average marketing time of only 31 days. Comparing data from our Multiple Listing Service from June 1 until November 13, 2008, versus the same timeframe in 2007, for the price range of $500,000 and higher, our Marketplace experienced an overall reduction in the Unit Volume of Sales of 17.2% as well as a reduction in Total Dollar Volume of 21.6%. While this may seem like a startling statistic, the reason for this slowdown is easily explained. The inventory of New Listings coming to market in 2008 was down by 21.8% from the same time period in 2007. This is, no doubt due to the overall uncertainly that shrouds our major financial markets today. There is also a prevailing misconception that Real Estate loans are available and that prices are plummeting in all areas of California. This is not true. Loans are readily available and prices have held remarkably steady.

We have seen a minimal decline in our Median Price of only 3.5% over last year’s figures. This is the first real decline that we have experienced in many years. We remain insulated from the higher foreclosure rates and ever increasing inventory seen in other parts of California and the nation. The San Francisco East Bay continues to a central core of Real Estate activity and price stability.

Winter 2008 | Artisan Group Luxury Market Report | Page 4

Sonoma, Napa, Marin & Monterey/Carmel
| Morgan Lane

The Luxury real estate market in Napa and Sonoma Counties pretty much mirror each other. Since the so called federal bailouts and concurrent extreme stock market losses and day to day volatility began the luxury property market has slowed considerably and inventory has grown. Buyer’s are either hesitant to even consider buying or their expectation is for highly discounted sales prices relative to list prices. For example, a property just listed in Sonoma for $2.9 million sold for $2.25 million and a home in Napa listed for $4.6 million sold for $3.5 million. Additionally, both properties had been on the market for over 200 days, a not unusual time frame. While the Luxury Property market is sluggish, well priced properties continue to come on the market and defy the market and sell quickly and motivated sellers present excellent purchase opportunities for buyers. The key is to get the negotiating process started.

In Marin Country, as a result of the supply constrained nature of our market, (80% of our land in held development constrained non-profit trusts), home values have held strong in most neighborhoods and cities. Buyers are now reaping the benefits of the sub-prime lending practices and subsequent foreclosures in parts of San Rafael and Novato. These bank-owned properties (REOs) now represent great opportunities for buyers in the $750,000 - $1 million price range. The strongest sector of our housing market is in Central and Southern Marin from $800,000 - $1.8 million. Buyers have inventory to compare and select from; mortgage rates seem to be more competitive every day and sellers are finally willing to negotiate with qualified buyers. The high-end of Marin’s housing market ($2 million and up) is slowed as a result of significant losses and now volatile swings in the equity markets. Buyers are circling yet cautious. After a somewhat gridlocked October and November, new escrows over $2 million are increasing daily and we have two properties in escrow over $10 million. Overall we expect a robust first quarter of 2009 including an increase in volume in the high-end of 30% - 40%.

San Francisco
| Paragon Real Estate Group

The luxury home market in San Francisco has proven to be remarkably resilient considering the general market conditions in California and the country. In the 5 months beginning June 1, 2008, there were 163 house sales and 72 condo/co-op sales in San Francisco of $1,500,000 and above – a 3% reduction in house sales and a 25% reduction in condo sales from the period a year earlier. The median sales price was in the $2,000,000 to $2,100,000 range – a 5% increase for houses and 10% increase for condos. 50% of luxury houses sold went pending sale within 30 days of going on market, to close at an average sales price of 103.4% above the asking price. The average dollar per square foot was an incredible $1038 for condos and $801 for houses, and sales at over $2000 per square foot do occur. Two areas of San Francisco dominate the luxury house market: the Noe Valley/Castro/Haight Ashbury district and the Pacific & Presidio Heights/ Marina district; the first has the greater number of sales; the second has the higher values. For high-end condos, the 3 most active and highest value districts are Pacific & Presidio Heights, Russian & Nob Hills, and South Beach/SOMA. The largest house sale in this period was a 9000 square foot, 8-bedroom, 11-bath, Pacific Heights mansion built in 1899, which sold for $18,000,000. The largest condo/co-op sale was a 4300 square foot, 3-bedroom, 3 ½ bath co-op apartment with spectacular views in Pacific Heights, which sold for $6,250,000.

Getting Over It

Mon, 29 Dec 2008 12:23:00 GMT

Getting Over It

(Contributed by Sharon Stensaas, Editor of the Yountville Sun)

The diagnosis for America – partial paralysis brought on by an agonizing stroke of economic fear.

Fear is not something Americans wear well. The Cuban Missile Crisis and 9/11 are the most serious bouts with national fear many of us can remember. The sources of our fear in both of those instances were external to our own culture – not part of the familiar fabric like banks, real estate, oil companies and auto manufacturers. This time the bad guys are us – our elected leaders, our financial gurus, the captains of business and industry, our neighbors and our own personal carelessness and greed.

We don’t have many recent markers to identify with in this current atmosphere of fear. For most of us the Great Depression is a chapter out of history that we have read and heard about on the lips of our parents and grandparents, but our personal experience in a like situation is basically nil.

For a time it seemed that all we could do was concentrate on the riveting race for the White House and kept close tabs on the stock market, hoping that some kind of divine positive current would make our fear disappear. Instead, the situation has grown more complicated and rippled out into every segment of American society and around the globe.

Now, we have a newly elected president without actual authority to act and a retiring president who has spent all of his political capital. We understand the system well enough to know that no one individual can resolve this problem single-handedly. And we know the fix isn’t going to come overnight. But the prospect of almost eight more weeks in utter limbo is maddening.

We’re Americans. By nature we seize the day, but how exactly to do that right now is a question we’d like to have answered. We are anxious to play some kind of role in re-igniting our economy. Many of us would settle for suggestions on some individual actions we could take today, tomorrow and next week that might contribute in some tiny but meaningful way to generating a spark of hope.

It is heartening to learn in survey after survey that, while Americans are planning to spend less this season on the holidays, they are not cutting charitable donations out of their plans and, in fact, many cite the necessity to give more this year. In other words, one of the ways to make a small difference right now already has been realized – to ease the conditions on those who are suffering the most. Hunger and homelessness are enemies we cannot allow to gain a foothold in our communities.

The fact that oil prices have fallen and gas is cheaper is due, in part, to the collective impact of many little actions taken to reduce consumption. Now that prices have eased, Americans will be tempted to go back to their old habits. We will be fools if we abandon carpooling, ferry, bus and BART rides, walking and biking, combining of errands and shopping into single trips, etc. More disposable income is almost a universal outcome of keeping oil prices down. It puts money in every pocket. The larger challenge will be a national energy policy that provides meaningful incentives for viable alternatives to fossil fuels, but that’s another entire discussion.

Logic also requires thinking twice before we neglect basic infrastructure. If the means aren’t available that is another story, but if we stop logical spending when we have the means that just doesn’t make sense. Unwise decisions include neglecting needed health maintenance – personal infrastructure, ignoring and postponing the upkeep of personal investments like cars and homes and allowing our communities to decline by neglecting the infrastructure that supports our homes and businesses.

Keeping the inherent optimism in our land of opportunity alive is another vital collective quest. At this very minute resourceful entrepreneurs are discovering opportunities to innovate in this challenging market. We don’t know them yet because the media hasn’t yet uncovered and reported their results, but they are sure to be our next Bill Gates and Warren Buffet. Incubating our dreams is an absolute necessity if we are to rekindle and share a favorable financial future.

We definitely don’t have all the answers for resolving our nation’s economic crisis, but we do have collective power to take a few simple and logical steps to help boost us out of our economic paralysis.