Market Activity in Cambrian Park San Jose, CA 95118 as of Dec. 8, 2008

johnleahy — Wed, 10 Dec 2008 01:38:43 +0000

The market in the Cambrian Park area of San Jose is still weak, but holding steady. Of the 33 closed sales from Nov. 1 to Dec 4 - 4 were short sales and 10 were bank owned. That means that 19 or just 58% of the sales were normal sales. Many sold pretty close to their list prices with 13 at or above list, although there were 10 that the sellers really gave up from $28,000 to $49,950 or more such as 3418 Meridian Ave; a 2690 sf home listed for $785,000 that sold for $700,000 and 3015 Yucca Ave; a 1140 sf Hacienda Gardens home that was lsited for $400,000 and sold for $350,000. It is interesting to see that the higher end market is beginning to be affected. Saratoga homes listed over $2,000,000 have only one pending sale to 60 homes currently for sale in that range. Not a good sales ratio. Cambrian Park currently has 175 active listings and 60 pending sales; a fairly respectable 75 days of inventory.

Street    List Price    Sales Price    SqFt    BD    BA   COE
Kooser Road    $439,999            1185    3    2       active
Princeton Drive    $449,950            1250    4    2       active
Blossom Hill Road    $450,000            1630    3    3       active
Purdue Place    $454,900            1211    3    2       active
Holland Lane    $495,000            1252    4    2       active
Princeton Drive    $495,000            1211    3    2       active
Blossom Hill Road    $499,950            1446    3    2       active
Harvard Drive    $520,000            1513    5    2       active
Holland Court    $579,995            1189    3    2       active
Yale Drive    $599,999            1198    3    1.5    active
Rhine Lane    $599,998            1728    3    2       active
Dwight Avenue    $625,000            1211    3    2       active
Weathersfield Way    $675,000            1176    3    2       active
Princeton Drive    $495,000    pending        1185    3    2    Dec 12, 08
Holland Court    $579,995    pending        1189    3    2    Dec 19, 08
Kooser Road    $419,999    pending        1185       3    2    Dec 21, 08
Princeton Drive    $495,000    pending        1185    3    2   Sept. 27, 08
1541 Princeton Dr.    $465,900    $465,900        1185    3    2    Nov 21, 08
5755 Waltrip Lane    $499,900    $520,000        1282    4    2    Nov 20, 08
5749 Siefert Avenue    $598,000    $598,000        1286    3    2    Nov 7, 08
1578 Tobias Drive    $699,000    $695,000        1782    4    2    Nov 6, 08
5016 Joseph Lane    $699,900    $650,000        1734    4    3    Dec 4, 08

Market Activity in West San Jose, CA 95129 as of Dec. 8, 2008

johnleahy — Wed, 10 Dec 2008 01:35:25 +0000

The December market for homes with Lynbrook High School is still showing slowing sales and higher than usual inventory for this time of year. Closings are down but the inventory of homes with the Lynbrook (259) school code has dropped one to 17 active listings and 5 pending sales. The numbers don’t look bad but the feeling is becoming one of caution on the part of buyers. In Saratoga the market has turned much harder especially in the higher end homes. Over $2 million there is only 1 pending sale to 59 active listings. This may or may not migrate to our local market. Only time will tell.
There are more investors taking advantage of the low end of the San Jose market as rental homes can positive cash flow with 25-30% down. These could be a good place to put $90,000. Over time these properties will appreciate significantly and rents could double in 7-10 years.

Street                   List Price Sales Price    SqFt    BD BA   COE
Arlington Lane    $939,000            1378    4    3        active
Huntingdon Drive    $958,000            1187    3    2        active
Provincetown Drive    $968,000            1200    3    2        active
W Riverside Way    $969,000            1240    3    2        active
Wunderlich Drive    $1,039,000            1465    3    2        active
Elka Avenue    $1,088,000            1300    3    2        active
Avondale Street    $1,090,000            840    2    1        active
Littleoak Circle    $1,128,000            1974    4    2        active
Bentoak Lane    $1,198,000            1996    5    2        active
Lancer Drive    $1,199,800            2101    4    3        active
Vicanna Drive    $1,210,000            1800    5    2        active
Windsor Way    $1,299,000            1794    4    2        active
Sturgeon Way    $850,000    pending        1394    4    2    Dec 12, 08
Di Napoli Drive    $899,000    pending        1226    3    2    Nov 26, 08
Corvette Drive    $929,000    pending        1133    3    2    Dec 19, 08
Lancer Drive    $975,000    pending        1133    3    2    Dec 19, 08
Countess Court    $1,050,000    pending        1296    3    2    Dec 17, 08
Ardenwood Drive    $1,488,000    pending        2980    5    3    Jan 15, 09
1032 Craig Drive    $968,000    $920,000        1133    3    2    Nov 25, 08
6754 Rainbow Drive    $1,098,000    $1,040,000    1701    3    2.5 Dec 3, 08
6387 Wisteria Way    $1,099,000    $1,010,000    1382    3    2     Dec 3, 08
1081 Avondale St    $1,118,168    $1,156,000    1536    4    3     Oct 24, 08
1010 Alderbrook Ln     $1,150,000    $1,175,000    2032    4    3     Oct 28, 08

Previewing Bank Owned Houses in Cambrian Park, Ca on Dec. 3, 2008

johnleahy — Wed, 03 Dec 2008 07:57:25 +0000

Today was preview day for me in the Cambrian Park area of San Jose. To be a bit more specific I was previewing 26 single family houses that are bank owned in Cambrian Park district and in the 95136 zip code of Blossom Valley. I was surprised to see how well some of the properties showed and how good some of the deals are. Naturally there was also a bit of junk, but one man’s trash is another man’s treasure. These properties were all listed as active on the MLS Listings MLS (www.mlslistings.com) as of this moring although one has been reported as sold as of this afternoon.

1776 Barcelona Avenue is listed for $524,900 by Mark Von Kaenel with Von Kaenel and Associates www.vkaa.com. MLS #80845089 is listed as a 4 bedroom 2 bath home with 1247 sf on a 7068 sf lot. This is a pretty nice home with a good design and a great neighborhood and school district. Specific schools aren’t listed but it should be Union Middle School and Leigh High School. This home is in decent condition. It has a patio room to give it some additional space and a wide side yard for added parking. It also has a newer roof, dual pane windows and a large yard, although it certainly needs a new kitchen as well as landscaping. Like most bank owned homes it has a bit of deferred maintenance.

5124 Alan Avenue is also located in the Leigh High School attendance area. It also the listing also mentions that it feeds into Noddin Elementary School, one of the area’s best. This house is listed by Grant Griffith and Jones of Windermere Silicon Valley Properties http://www.silvercreekonline.com for $574,900 MLS #80837037. It’s listed as a 4 bedroom, 2 bath with 1876 sf. This square footage would include the converted garage, all on a 6000 sf lot. This home is in very good condition with recently remodeled kitchen and bathrooms. It also has dual pane windows, but the roof warrants a closer look. The house backs up to the houses that are on Camden Avenue, so it does get a little road noise, but the condition, neighborhood and schools make this one worth a look.

14240 Esther Drive is located in what was once a county pocket of Santa Clara county, but has been annexed into San Jose. As such it is in a neighborhood that traditionally has smaller houses built on large lots. This house has been expanded to 1482 sf and the lot is 8118 sf. The location is a bit of a challenge given that it is one house off of Camden Avenue so it does get some noise. The house is listed by JoAnn Guercio with Intero Real Estate Services http://GteamRealEstateServices.com and has a price of $499,000. It has 4 bedrooms and 2 baths and is in reasonably good shape. It has a good looking roof and dual paned windows but could use general remodeling.

1695 Bernice Way is a very cute and nicely upgraded little house in a nice neighborhood. It is listed by Aija Halliday of Intero Real Estate Services arhalliday@yahoo.com as a 3 bedroom 1 bath house with 984 sf on a 6270 sf lot for $524,900. It really is a nice house; not the type you expect to see as a banked owned home; with a remodeled kitchen and baths, granite counter tops, crown molding, dual pane windows and updated lighting fixtures. It is listed as having a 2 car garage, but this has actually been converted into a one bedroom apartment with a full bath and efficiency kitchen. It is reasonable to assume no permits for this conversion. Perhaps a little pricey for an REO (bank owned home), but a decent value for the area and condition.

1960 Geneva Drive is listed by the Wilson/ Rosano Team with Intero Real Estate Services WilsonAndRosano@interorealestate.com for $584,900. MLS #80837257 is listed as a 3 bedroom, 2 bath house with 1278 sf on a 5504 sf lot. This is a pretty cute property with good floors and a decent kitchen and good baths. It lacks curb appeal and has a smallish lot. It does benefit from being just a couple of houses away from private elementary school playground as well as the accompanying church grounds.

We go from Geneva to 3182 Ross Avenue. This house is listed by Dennis Mulvihill of Alain Pinel Realtors http://www.apr.com/agent.asp?agent=dmulvihill with MLS #80806126. It’s the only sub-$400k price of today’s tour- $398,699. It is listed as a 3 bedroom, 2 bath home with 1248 sf on a 5900 sf lot. It’s on a busy street across from Target and Home Depot and near other commercial property. Condition is that of a home that was going to be remodeled very nicely, but then was never finished. The crown molding and the large format tile floors are nice and the hall bathroom is nice. Location makes this one a tough sale.

From here we go to perhaps the best overall house of the day. Of course, it’s also the most expensive at $630,000. 3839 Woodford Drive is listed by Mark Stevenson with Stevenson and Neal Realtors http://www.MarkStevensen.com. MLS #80847341 is listed as a 3 bedroom, 2 bath house with 1480 sf on a 8062 sf lot. This home has been extensively upgraded with a gourmet kitchen, beautiful baths, high end windows and newer roof too. It does back up to some power transmission lines, but these don’t seem to impact the property too much especially with the deep back yard. It’s located across the street from Sartorette Elementary School. This home is certainly worth a look.

1814 Foxworthy Avenue is listed by Joann Guercio with Intero Real Estate Services http://GteamRealEstateServices.com for $449,000. MLS #80840347 is listed as a 3 bedroom, 2 bath home with 1263 sf on a 6300 sf lot. I really don’t have anything nice to say about this property except that it has dual pane windows and a newer roof.

3187 Quinto Way is a very nice little Hacienda Gardens home. It is listed with Tim Woehman of Intero Real Estate Services teamreosold@aol.com for $418,000. MLS #80836543 is listed as 3 bedrooms 1 bath, 1060 sf on a 5168 sf lot. This one has a nice kitchen, a fireplace (not all Hacienda Gardens homes have this) and an extra wide lot with room for parking on the side of the house. The garage has been converted into 2 more bedrooms and it would be a good starter home on a decent Cambrian area street.

3036 Quinto Way is just up the street and is across from the Baptist Church on the corner of Foxworthy Avenue. Not quite as nice as 3187 it is listed for $418,500 by Peter Van Dam with Alain Pinel Realtors petervd@aol.com. Still a pretty nice house MLS #80842310 is listed as a 3 bedroom 1 bath 1060 sf house on a 5194 sf lot

3098 Ensalmo Avenue is similar in design to the Hacienda Gardens homes but has 4 bedrooms and 1 bath in a 1140 sf home on a 5035 sf lot. MLS #80843380 is listed for $419,900 and features tile floors, dual pane windows and a newer looking roof. This home also has a finished out garage and a pretty good Cambrian neighborhood. It is listed by Bob Nastasi with A to B Realty http://www.atobrealty.com

1606 Babero Avenue is listed as a 5 bedroom, 2 bath house with 1500 sf and a 500 sf lot. This home has a converted garage which appears to be included in the square footage and is in generally poor condition. It does have dual pane windows and a decent roof. It is listed by Rob Roham with Re/Max Advisors http://www.robroham.com for $403,750, MLS #80846295.

1604 Hallbrook Drive is listed for $524,900 by Tim Woehman with Intero Real Estate Services teamreosold@aol.com. MLS #80846010. This is an inverted floor plan, meaning that the kitchen and living room are upstairs while a bedroom and family room are located downstairs. It’s listed as a 3 bedroom, 2 bath house with 1629 sf on a 6200 sf lot. It is in pretty good condition with dual pane windows and a newer roof. It also features an extra wide side yard for a boat of RV. It has a covered patio and the garage is finished but not converted. There is also a second kitchen in the enclosed patio. At this price it may be considered a very good buy, but it will still need some work to bring it up to current standards. It also is somewhat impacted by being one house off of Meridian Avenue.

3715 Jarvis Avenue is another home that I don’t have much nice to say about. It is listed as MLS #80844379 by Phil Costanza of RE/Max Santa Clara Valley a s 4 bedroom, 2 bath home on a 6200 sf lot for $489,900.

1452 Hillsdale Avenue is quite the departure from what we have been seeing. First of all it was an incredibly nice home that was remodeled very nicely by its previous owners. However, it has several pieces that have been removed, but should be easy (if a bit costly) to replace. It is listed as MLS #80847232 by REOGroup with RE/Max real Estate Services http://www.houseshopper.net for $489,900 with 3 bedrooms, 2 baths and 1391 sf on a 6000 sf lot. It has some great features like the custom stamped concrete driveway with embedded lighting, custom kitchen remodel, marble showers and backyard featuring a custom pool and deck with a unique hot tub and built in bar-b-q area. Some of the missing pieces include the ovens, fridge, a toilet and the pool pumps. The outdoor bar-b-q equipment is also gone. Still, even though it’s a busy street, this could be a real gem. The garage has been converted to a 1 bedroom, 1 bath apartment that is likely not permitted or included in the above property description.

3161 Woodmont Drive is listed by Dennis Mulvihill with Alain Pinel Realtors http://www.apr.com/agent.asp?agent=dmulvihill for $485,600. MLS #80846452 is listed as a 3 bedroom, 2 bathroom house with 1460 sf on a 6930 sf lot. It’s a decent house in a decent area. It does side up to Hillsdale Avenue so there is some traffic noise. That’s about all I have to comment on that.

705 Creekfield Drive is the first of 7 houses that I saw in the 95136 zip code of San Jose’s Blossom Valley district. This area is more similar to the Cambrian area in terms of commute, schools and neighborhoods. It does tend to have lower pricing than the Cambrian area and utilizes highway 87 in addition to highway 85.

705 Creekfield Drive is listed by Peter Carey of Realty Peter Carey http://www.petercarey.com for $434,900 as a 3 bedroom, 2 bath house with 1258 sf on a 3049 sf lot. MLS #80844236. This is a newer home, built in 1983 and as such was built with newer concepts. i.e. zero lot line construction. This is a method of setting up lots so that one wall of the house also functions as the fence between your side neighbor. This allows the house to be built with only one side yard. This home is also built closer to the street than older homes and with a limited back yard. It’s more yard than a “patio home” but allows more homes per acre than traditional construction. This home is in very good condition. There aren’t any significant upgrades, but it is a modern design with some high ceilings and open living spaces. The property is located on a street that is adjacent to highway 87 so there is some road noise but the neighborhood is small and there would be no through traffic. Perhaps a good fit for someone looking for a newer design in a house. Clearly a pretty good deal.

3920 Jerabek Court is also a newer home (28 years) and is also built on a smaller lot (3441 sf). It is also built on the zero lot line concept. MLS #80837312 is listed by Bob Nastasi with A to B Realty http://www.atobrealty.com for $509,900. It’s listed as a 4 bedroom, 2 ½ baths at 1651 sf. It is in very good condition with granite counter tops in the kitchen and good use of space. It does have older single pane windows but is a very good buy at this price

540 Edelweiss Drive could be the sleeper in the crowd. This is listed by Nancy Vanegas with Intero Real Estate Services http://www.NancyVanegas.com for $524,900. MLS # 80813012 is listed as 1728 sf on a large 6767 sf lot and features a very modern look and feel. It is not highly upgraded, but has nice floors, kitchen and baths. It also has a large balcony/patio off the upstairs family room. It is listed as a three bedroom, three bath home, but the upstairs family room has its own full bath. The property should have its roof checked but it is a very nice home in a good neighborhood.

Another sleeper home is 669 Tarrytown Court. MLS #80844823 is listed with Pat O’Connell with Century 21/Lincoln Realty Pat@c21Lincolnrealty.com. It is listed for $529,900 and has 4 bedrooms, 2 bath and 1843 sf on a 6098 sf lot. It has been recently painted and new carpet installed and has a nice kitchen, good design and nice landscaping. It is also located on a cul-de-sac in a nice Vistapark neighborhood; in fact, it’s just down the street from Vista Park. Certainly worth a look.

510 Hyde Park Drive is a large home in the Vistapark neighborhood. It is listed with Kamran Chitgar with Coldwell Banker Platinum Group http://www.cbsanjose.com. MLS #80825974 is listed for $539,900 and has 4 bedrooms and 3 baths in a 2124 sf house on a 6300 sf lot. This is a large house in a very nice neighborhood, although Hyde Park Drive is a light feeder street into the neighborhood. This home is also just around the corner from Vista Park. It is more in the kind of condition you would expect from an REO; not bad, but in need of some cosmetic repairs and upgrades including replacing the oven/range. This home has plenty of storage space and appears to be a very good deal for the square footage.

4536 Britwell Court is the property on my list that went pending today. It was listed by Dominic Nicoli with Intero Real Estate Services http://www.dominicnicoli.com for $434,900. It sides up to Branham Lane and has 1330 sf on a 7000 sf lot. MLS #80838239 has 3 bedrooms, 23 baths and was in relatively poor condition. I’m not quite sure why this one sold before some of the others I saw, but the price was pretty good.

4559 Meadowhurst Court is listed by Rob Roham with Re/Max Advisors http://www.robroham.com for $419,900. MLS #80826826 is 3 bedrooms, 2 ½ baths. This home is a zero lot line home of 1878 sf on a 3864 sf lot. This home suffers from some deferred maintenance but has new paint and is in decent condition. It does back up to the ARCO station at Branham and Pearl so the price would seem to reflect this fact. The garage has been converted to additional living space and ties in well as a family room.

4569 Shadowhurst Court is one street over from Meadowhurst Court and is a very similar house. This home is listed by Margaret Vierra with Exit Realty Keystone http://www.TeamVierra.com for $469,900. MLS # 80834661 has 3 bedrooms, 2 ½ baths in 1578 sf on a 3772 sf lot. I’m not too impressed with this house but it is in decent condition and a cul-de-sac location. Even with the small lot there is a bit of back yard and a small pool off to the side.

So that was my REO preview tour for December 3, 2008. It is amazing to see a market with so many well priced homes most of which have been on the market for over a month. These are for the most part, very good neighborhoods with good to great schools and great access to transportation including light rail, and highways 87 and 85 as well as Camden Avenue and Almaden Expressway. Some are close to Los Gatos, some close to Willow Glen and all are part of the coveted West Silicon Valley.

Cambrian Park, November 2008 Real Estate Newsletter

johnleahy — Tue, 25 Nov 2008 06:52:17 +0000

The market in the Cambrian Park area of San Jose continues to struggle under the weight of the credit crisis, short sales and foreclosure although of the 69 closed sales from Oct.1 to Nov. 20 only 8 were short sales and 12 were bank owned. That means that 49 or 71% of the sales were normal sales. Most of these sold pretty close to their list prices and show again that well priced listings are selling. The bank owned properties are clearly affecting the marketplace and the short sales have a tendancy to skew the numbers since they may be pending for months and then still only about 50% of them ever close escrow before being foreclosed upon. I currently represented a buyer on a short sale. It was the second one he had gotten an accepted offer on. The deal was very good and the property was in better condition than most bank owned homes. For the patient buyer, these can be great opportunities.

Market Activity:

Street List Price Sales Price SqFt BD BA COE

Kooser Road    $419,999            1185    3    2       active
Kooser Road    $446,000            1252    4    2       active
Princeton Drive    $449,950            1250    4    2       active
Blossom Hill Road    $490,000            1630    3    2       active
Tobias Drive    $490,000            1218    4    2       active
Princeton Drive    $495,000            1211    3    2       active
Holland Lane    $495,000            1252    4    2       active
Blossom Hill Road    $499,950            1446    3    2       active
Harvard Drive    $520,000            1513    5    2       active
Rhine Lane    $599,998            1728    3    2       active
Yale Drive    $599,999            1198    3    1.5    active
Joseph Lane    $619,950            1272    3    2       active
Dwight Avenue    $649,980            1211    3    2       active
Weathersfield Way    $675,000            1176    3    2       active
Weathersfield Way    $699,000    pending        1501    3    3    Dec 17, 08
Holland Court    $579,995    pending        1189    3    2    Dec 19, 08
Blossom Hill Road    $492,000    pending        1189    3    2    Oct 28, 08
1541 Princeton Drive    $465,900    $465,900        1185    3    2    Nov 21, 08
5755 Waltrip Lane    $499,900    $520,000        1282    4    2    Nov 20, 08
1467 Dentwood Dr.    $450,000    $450,000        1212    3    2    Oct 24, 08
1578 Tobias Drive    $699,000    $695,000        1782    4    2    Nov 6, 08
5749 Siefert Avenue    $598,000    $598,000        1286    3    2    Nov 7, 08

Lynbrook High School Real Estate Newsletter - November 2008

johnleahy — Fri, 07 Nov 2008 20:30:23 +0000

The November market for homes with Lynbrook High School is showing slowing sales and higher than usual inventory for this time of year. While there are still a fair number of sales and closings, inventory of homes with the Lynbrook (259) school code has grown to 18 listings and only 4 pending sales. Jumbo loans are running around 8% with 1 point. The new conforming loans will go up to $625,000 which generally is not high enough for the West San Jose market area. The rate on these loans is around 6.25%. This could be a great environment for a small seller carryback financing option. A rate advantage for your buyer and potential tax advantages for you.
The lower end of the San Jose market is beginning to sell briskly mostly due to great prices.

Street List Price Sales Price SqFt BD BA COE

Johnson Avenue    $800,000            1100    3    2     active
Corvette Drive    $929,000            1133    3    2     active
W. Riverside Drive    $1,029,000            1240    3    2     active
Elka Avenue    $1,088,000            1300    3    2     active
Craig Drive    $968,000            1133    3    2     active
Harlan Court    $995,000            1693    4    2     active
Huntingdon Drive    $998,000            1187    3    2     active
Pilgrim Avenue    $1,139,900            1687    4    2     active
Littleoak Circle    $1,198,000            1974    4    2     active
Bentoak Lane    $1,198,800            1996    5    2     active
Lancer Drive    $1,199,800            2101    4    3     active
Vicanna Drive    $1,210,000            1800    5    2     active
Windsor Way    $1,299,000            1794    4    2      active
Bollinger Road    $1,380,000            2112    5    2.5   active
Ardenwood Drive    $1,488,000            2980    5    3      active
Bing Drive    $1,528,000            2751    4    2.5   active
Ardenwood Drive    $1,599,950            3010    5     4      active
Di Napoli Drive    $899,000    pending        1226    3    2     Nov 26, 08
Craig Drive    $968,000    pending        1133    3    2     Nov 25, 08
Rainbow Drive    $1,098,000    pending        1701    3    2     Dec 3, 08
Wisteria Lane    $1,099,000    pending        1382    3    2     Nov 25, 08
1036 Prouty Way    $978,000    $985,000        1120    3    2     Oct. 9, 08
6522 Camterbury Dr.    $998,000    $1,015,000    1271    3    2     Oct 15, 08
1188 Dresden Way    $1,015,000    $960,000        1271    3    2     Oct. 10, 08
6701 Devonshire Dr.    $1,100,000    $1,030,000    1482    3    2     Oct 9, ‘08
081 Avondale St.    $1,118,168    $1,156,000    1536    4    3     Oct 24, 08
1010 Alderbrook Ln.    $1,150,000    $1,175,000    2032    4    3     Oct 28, 08

What Should the Federal Government do with the $700 Billion Bailout Plan?

johnleahy — Thu, 30 Oct 2008 16:48:09 +0000

The $700 Billion Emergency Recovery Plan, also known as “The Bailout” is a great tool for the federal government to use to help stop the downward spiral in home prices. If they could only use it to solve the root of the problem instead of simply treating the symptoms, then it has a good chance of working while significantly easing the pain on “Main Street”.

My simple solution is similar to the concept proposed by Dr. Michael Cantrell, Sr. [Federal Housing Recovery Plan, created by Dr. Michael W. Cantrell, Sr. will enable the housing industry to recover in less than 24 months from the date of its implementation.] Basically if the government wants to solve the problem then they should own the problem. They can accomplish this by actually buying the Mortgage Backed Securities as planned in the bailout bill passed by congress. Once they do this they will be able to control the mortgages backed by the securities. Since the market is unwilling to price these securities (which is a prime symptom of the problem) the government should be able to buy them for 50-65 cents on the dollar, thereby recapitalizing the financial institutions and still getting a decent deal for the taxpayers.

Once they own the mortgages, the government can go to homeowners who are in default on these mortgages and “make them an offer they can’t refuse”. Since we got the paper for 65% of it’s original cost we can offer homeowners to rewrite their mortgages at 65% of their original loan amount. Also, since the government has a cost of capital of around 3-4% they can rewrite these mortgages at a 5% fixed rate for the life of the loan. Dr. Cantrell’s plan has an additional component to reduce the moral hazard inherent in the plan of not forgiving the debt balance but instead adding it as a no-payment, no interest lien attached to the property. One might further decide to require some sort of shared appreciation on the lien.

Of course, the government won’t force anyone to rewrite their loan, and the homeowner must still make their payments. If they don’t or couldn’t from the outset, then the government can instead offer to foreclose on the home (a deed in lieu of foreclosure actually) and agree to rent the home back to the former owner at current market rents. Then in three years or so, when the housing market is recovering, the government can sell any rental houses that it owns; hopefully at a profit. They may even offer generous financing terms to the renters so that, again they can stay in their homes and again become homeowners.

The result of handling the bailout this way is that the root of the problem; toxic mortgages causing a downward spiral in housing prices will be solved. The inventory of distressed homes will be greatly diminished. Responsible homeowners will be saved the pain of abandoned houses devaluing their properties and blighting their neighborhoods. The government will recover their $700 billion and will likely make a significant profit over the next 5-10 years

West San Jose, CA (Lynbrook High School) August 2008 Market Wrap

johnleahy — Tue, 12 Aug 2008 18:06:55 +0000

The August market for homes with Lynbrook High School remains strong but the inventory level has been increasing and some homes staying on the market for now as many as 115 days. We’re seeing some strength in some other areas of the county such as inventory in the Cambrian area dropping to 189 units from a high of 219 in May. Meanwhile the Cupertino / West San Jose zone has seen inventory slowly rising to 113 units from only 33 at the first of the year. We’re up to 19 active houses with the 259 (Lynbrook High School) search code and a pretty nice balance of 15 pending sales in this category. The 7 closed sales in July had a median closing price of $1,035,000 with 6 of 7 selling for over list.

What we seem to be seeing is that the more expensive homes seem to be taking longer to sell even though given that they are often “scrape and bake” brand new homes and the construction costs for a homeowner for this type of quality can easily be $300 per square foot; the market does not seem to be rewarding these homes at a level of bare lot plus construction costs. Instead buyers are opting for more modest homes in the $1 million to $1.2 million price range. The buyers are still leaning towards homes that have been significantly upgraded, but are happy with 1200-1400 sf; as long as it is in the right school attendance areas.

West San Jose Specific Properties Listings and Pending Sales

Street List Price Sales Price SqFt BD BA COE

Johnson Avenue $800,000 1100 3 2 active

Canterbury Court $950,000 1904 6 3 active

Miller Avenue $958,000 1266 3 2 active

Ardenwood Drive $988,000 1292 3 2 active

Rainbow Drive $998,000 1652 3 2 active

Canterbury Court $1,035,000 1271 3 2 active

Countess Drive $1,080,000 1376 4 2 active

Prospect Road $1,120,00 1812 3 2.5 active

Harlan Court $1,279,950 1703 4 2 active

Danbury Drive $1,498,888 2032 4 2.5 active

Cynthia Lane $1,525,000 2300 4 4 active

Avondale Street $1,695,000 3708 6 4 active

Ardenwood Drive $1,698,888 3010 5 4 active

Bollinger Road $879,000 pending 1264 3 2 Aug 13, ‘08

Huntingdon Drive $985,000 pending 1187 3 2 Aug 29, ‘08

Lynbrook Way $988,800 pending 1187 3 2 Aug 26 ‘08

Corvette Drive $950,000 pending 1284 4 2.5 Aug 28, 08

Hanver Drive $1,025,888 pending 1188 3 2 Aug 19, 08

Bonnie Joy Avenue $1,048,800 pending 1300 3 2 Aug 21, 08

Longfellow Way $1,099,950 pending 1357 3 2 Sept 3, 08

Avondale Street $1,128,000 pending 1536 4 2 Aug 28, ‘08

Glenhaven Drive $1,198,000 pending 1688 3 2 Sept 9, ‘08

Galli Drive $1,249,000 pending 1944 4 2 Aug 13, ‘08

Harlan Court $1,299,950 pending 2082 5 3 Aug 15, ‘08

Countess Drive $1,300,000 pending 2346 4 3.5 Aug 16, ‘08

Huntingdon Drive $1,599,888 pending 2700 5 4 Aug 22, ‘08

Huntingdon Drive $1,619,800 pending 3015 5 4 Aug 29, ‘08

The Cambrian Park, CA Market Wrap for August 2008

johnleahy — Tue, 12 Aug 2008 17:36:31 +0000

The market in the Cambrian Park area of San Jose is still struggling just a bit under the weight of short sales and foreclosures. Three short sales have closed recently so on the bright side they are out of the way, but on the down side they sold for $602,000, $531,900 and $496,000. Active listings remain at a comfortable but high level of 186 and the median list price of $650,000 is static. The pending sales have increased to a respectable 91 units. Given that rate of absorbsion the days of active inventory has dropped to about 61 days. This is remains a balanced market with a bias favoring buyers. We continue to see some great buying opportunities and the marketplace does seem to be taking advantage of these properties, buying up some of the best bargains we’ve seen in a decade. Still, some move-in types of homes are selling in more traditional transactions at pretty fair prices. Of course, move-up buyers are still getting a net percentage benefit given the larger numbers on the purchase. Call me for some investment ideas.

Specific Market Data for the “Dutch Haven” area of Cambrian Park, CA

Active Listings

Kooser Road    $465,000            1252    4    2       active
Kooser Road    $471,469            1185    3    2       active
Princeton Drive    $495,000            1185    3    2       active
Princeton Drive    $499,000            1250    4    2       active
Blossom Hill Road    $499,950            1446    3    2       active
Blossom Hill Road    $510,000            1189    3    2       active
Joseph Lane    $595,000            1400    4    2       active
Yale Drive    $599,999            1198    3    2       active
Tobias Drive    $639,800            1272    3    2       active
Weathersfield Way    $799,000            1501    3    3       active

Pending Listings and reported expected close of escrow dates:

Holland Lane    $515,000    pending        1189    3    2    Aug. 22, 08
Holland Lane    $540,000    pending        1252    4    2     Apr 15, 08
Cornell Drive    $568,000    pending        1252    4    2    Aug 13, 08
Joseph Lane    $695,000    pending        1466    3    2     Aug 8, 08
Rotterdam Lane    $725,000    pending        1694    4    2     Apr 15, 08

Closed Sale Listings with List Price, Sales Price, SF, Bedrooms, Baths and Close of Escrow Date

5604 Holland Lane    $509,000    $496,000        1252    4    2     July 25, 08
5522 Yale Drive    $535,000    $530,000        1185    3    2     July 24, 08
5726 Holland Lane    $575,000    $531,900        1252    4    2    July 3, 08
1564 Kooser Road    $608,000    $602,000        1392    3    2    Aug 11, 08
5577 Yale Drive    $749,900    $730,000        2051    4    2.5 Aug 5, 08

May 2008 Newsletter for Cambrian Park, Californina

johnleahy — Fri, 02 May 2008 05:34:23 +0000

The market in the the Cambrian Park area of San Jose has shown slow but steady improvement. Active listings have climbed to 198 and the median list price of $699,000 is static. The pending sales have increased to 69. Given that rate of absorbsion the days of active inventory has dropped to about 86 days. This is approaching a balanced market with a bias favoring buyers; much better than the all-out buyer’s market we’ve had over the past 8 months. In our local market there’s a mix that has quite a few short sales and a bank owned home so the inventory is pretty rough and difficult to close a sale with. This is not supportive of pricing. Buyers are either looking for a real deal or a real “shiny penny”; a home that has been remodeled with all of the modern design features like granite, crown molding, custom baseboards and quality landscaping. It’s still a great time to be an investor. In fact, with an improving market but still discouraging news coverage the downside risk is somewhat mitigated. Call me for some ideas.

Local Market Activity for May 2008

Street List Price Sales Price SqFt BD BA COE

Princeton Drive $499,000 1250 4 2 active
Princeton Drive $519,000 1211 3 2 active
Holland Lane $540,000 1252 4 2 active
Kooser Road $549,900 1185 3 2 active
Princeton Drive $559,900 1185 3 2 active
Holland Lane $575,000 1252 4 2 active
Yale Drive $599,999 1198 3 1.5 active
Yale Drive $599,999 1185 3 2 active
Kooser Road $608,000 1392 3 2 active
Kooser Road $629,000 1252 4 2 active
Blossom Hill Road $649,900 1446 3 2 active
Blossom Hill Road $730,000 1630 3 3 active
Holland Lane $509,000 pending 1252 4 2 Mar 15, ‘08
Holland Lane $540,000 pending 1252 4 2 Apr 15, 08
Rotterdam Lane $699,000 pending 2277 4 3.5 Apr 22, ‘08
Waltrip Lane $499,900 pending 1196 3 2 May 28, 08
Tobias Drive $669,000 pending 1400 4 2 Apr 17, ‘08
Boone Drive $638,000 $656,000 1218 3 2 Apr 17, ‘08
Antwerp Lane $699,000 $714,000 1370 3 2 Apr 23, ‘08

What is a Bank willing to accept on its REO listings?

johnleahy — Fri, 25 Apr 2008 00:45:04 +0000

How do banks determine what they will accept on their bank owned properties (REOs)? Do they use a percentage of what the loan amount was and adjust from a loan loss perspective? Short Sale loss mitigation departments think like that. Banks selling their own inventory don’t really think that way. They think more like homeowners. They want to get as much as possible…however, they know that they are perceived as inferior properties and they know that buyers are going to make low-ball runs at them. They also do not have the emotions that homeowners have so they are willing to accept less if that’s what the market will bear. After all, they have huge financial stakes in getting these properties off their books. More on that another time. But that being said, how do they value their REO inventories? They have relied on their agents’ BPOs (broker price opinion). These BPOs come from a few sources but primarily the agents who the banks have build a relationship with to help them sell their properties; agents who in another market would be helping the average homeowner in the area to sell their home; are doing the BPO. Since the agent’s interests aren’t alighed perfectly with their client’s they may have told them a) what they wanted to hear in order to get the listing, b) what the market was like when the lender was contemplating foreclosure, and c) what the broker thought it was going to take in order for a short sale not to occur (so that the REO broker could get the listing instead)…so the lender may be working off dated and/or incorrect data. In addition, lenders seem to think that the longer a house is given as far as marketing time, the more likely they are to get their price. Maybe in other, slower moving markets does this apply, but in Santa Clara County, a hot property is going to sell fast, and a home with long days on market counter is going to be perceived as “what’s wrong with this home?”. So the lender has a little bit of a learning curve here as well.

So what does this all mean? 1) Buyers need to be patient. As long as this market continues to appear to be weak, properties are going to take awhile to sell and opportunities will arise. 2) Buyers need to continue to work their offer; As long as they don’t have another buyer coming to the plate with a better offer then your offer is still in the running; even if this particular offer dies on the vine for lack of a counter-offer. You just need to wait awhile and put in another offer. 3) Once this market starts to improve, it’s too late to get a bargain; however, once it begins to improve, prices will bounce; I think by 7-10%. That could happen in as little as 2-3 months, but the market won’t perceive the change until 2-3 months after it has begun. After the bounce, there may be a second downturn, since there are many homeowners who would like to sell, but won’t compete against the short sales and foreclosures. That may be a second opportunity since these tend to be nicer homes, but will be valued based upon some of the distressed comparable sales.

How will I know when the market is turning. Well, I go to regular market updates and watch statistics as far as inventory and initiated contracts. One strangely odd signal will be that the median home sales price will dropped precipitously. That seems counter-intuitive since this is usually an indicator or a weaker market. But in today’s Silicon Valley market, we’ve seen that the median home price has been supported by the fact that homes in nicer, more expensive areas have continued to sell, while homes in traditional starter markets have not been selling well at all. Once these homes at the bottom of the food chain begin selling, they will soon start selling in large numbers. Even if the prices that they are selling at is increasing, the fact that so many are selling will bring down the median home price since this is the mid-point of all the homes that are selling. There is so much inventory languishing in the lower price ranges that this decrease in median home prices will be very pronounced once these homes begin to sell. Very strange indeed; a dropping of “prices” indicates a recovering market.