The $1 million home market

A million dollar sales price in Half Moon Bay will buy you a very nice home.  There may or may not be a compromise somewhere, such as one less bedroom in exchange for the location you desire, smaller home than you really want but with the great yard you wanted, the “perfect” house but without the view you hoped for, you get the idea.

There are 4 homes currently for sale between $1,000,000 and $1,050,000 in Half Moon Bay – 2 are walking distance to a children’s park, elementary school, the Coastal Trail, and downtown.   One is easy walking distance to the high school, and one is in Miramar, across the street (Hwy 1) from the beaches.  All are in suburban neighborhoods.

Two homes sold in HMB during the last 90 days in this price range.  Also, two homes sold in HMB during the same 90 days in 2006.  Four homes sold in HMB during the same 90 days in 2005.

For the entire Coastside, including Pescadero and Pacifica, there are 16 homes for sale in this price range.  All are 2-4 bedrooms, 1820-3500 square feet, 2 year to 43 year old houses, 5-225 days on the market!  Coastside real estate is VERY local.

Fed Funds Rate Cut – Where do we go from here?

As we begin to digest this week’s news of the half percent Fed Funds rate cut… Now what? 

On Tuesday afternoon, when I asked my Manager, Robert Ross, what he thought of the Fed reducing the funds rate, he said, “it probably won’t affect our area too much.”  Why, because we are San Mateo County, a bedroom community of tech-capital Silicon Valley, one of the wealthiest areas in the country.  “Home sales are less affected by interest rate fluctuations here.”  I won’t know the real reason without further analysis, but I would speculate that available assets to contribute to downpayments enables many of our buyers to obtain very good loan programs.  The chart data, provided by Mortgage Consultants Ed Diaz and Jim Gallup shows the correlation between conforming interest rates and the NASDAQ.  When local stocks are healthy more cash is available. 

The Fed Funds rate (interest rate charges between banks) does not directly affect mortgage interest rates.  It does affect home equity lines.   The Fed’s interest rate cut will have the effect of diminishing fear and panic at the investor level, which will ease the liquidity, and cause larger amounts of money to begin flowing again soon.  What does this mean for you as a home buyer or seller now?

Home sellers – You may get a few more buyers back in the market, more due to confidence than any additional money.  The Freddie Mac or Fannie Mae conforming loans were never affected by our current mortgage situation; the jumbo loans will come back into the market once the the money flow has loosened a bit.  Experts I have asked in the last few weeks say it should take until at least mid November before more jumbo products are available again. 

Home buyers – Mortgage interest rates are tied to Bond market, not the Fed Funds rate.  Also, lending standards have tightened since early August.  Talk to your TRUSTED mortgage professional about your options.  Each buyer’s situation is unique.  Depending on where you are in the buying process and your timing, your mortgage professional will be able to explain what may be coming down the pike that you can prepare for following the Fed’s actions this week.

Sources and a couple articles of interest (tons of reading out there):

• Federal Reserve System website
• Gary Watts, Real Estate Economist (presentation on 9/20/07) – Email me for 8 page report
• Chicago Tribune, 9/21/07
• Business Week – “Vital Signs…” 9/20/07
• Jim Gallup, Mortgage Professional, MadysenAve.com
• Ed Diaz, Mortgage Professional, P-Shift Mortgage Solutions
• Susan O’Driscoll, Mortgage Professional, Princeton Capital

We get a Rise out of Fall – Part 1 of 3

Autumn is one of the BEST times of year on the San Mateo County coast.  The weather pattern is such that our warmest and mildest weather is between September and November, I mean December, actually January can be good too.  Anyway, for anyone who knows me, I can get a little carried away with good weather – back to Fall…

 There is something in the air that is like a second Spring here…

Excitement is stirred into the pumpkin bread mix as we prepare to – reconnect with friends (this is my Part 1) - prepare for our volunteer jobs at the Pumpkin Festival (Part 2) - and perhaps take the time to check off a small home improvement project before the Holidays (Part 3).  So much to do, so little time.

Reconnect with Friends!  My “life” friends and I have just sent – or are sending – our first or last babies off to college this month.  What an experience!!!!  Once the spontaneous tears have subsided a bit I will be planning a get-together to eat good food (of course), and reminise about the days of baby mini-traumas, toddler playdates, birthday parties, sleepovers, crazy sports schedules and raising a horse-loving daughter.  The coastside is a fabulous place to raise a family and Fall brings it all back, even when the babies are now spreading their wings.  Ok, here I go… time out, getting tissue…Ok, I’m back.

So much has happened since I first came to Half Moon Bay 18 years ago.  A lifesaver was co-founding the Coastside Mother’s Club.  Its membership has grown by leaps and bounds since I and five other women started it back in the early 1990’s.  My kids were 3 and 1 then.  The other new moms that I met through that network are now my forever friends and we will be having that Fall dinner party soon.  One quick story for this blog, more in future blogs…

I will never forget the Thanksgiving when 4 young families – the young parents and each with our first child – attempted to have a “sit down” celebration when our kids were almost 1.  In addition to the 8 adults in our tiny dining room, there were 4 high chairs.  What I remember most was all of us taking bites here and there, getting up and down constantly and trying to keep food from the highchair trays from flying all over the room.  It was crazy and fun.  I think we managed to prevent any wine spillage, a good thing.

Reconnect with your friends this Fall.

Earth friendly Lifestyles recognized at Eco-Energy Expo

They came from all over the Bay Area – Sunnyvale, San Francisco, San Bruno and as far away as Castro Valley.  While most visitors who stopped by our booth were Coastsiders, the several hundred who enjoyed the 2nd annual Eco-Energy Expo in Half Moon Bay did not go away empty-handed, either of knowledge or goodies!

Since this is a real estate blog, one of the most exciting features of this event is the Solar Home Tour.  Fifteen homes showcased their solar and other green home improvements.  These homeowners have grabbed ahold of the 21st century and are incorporating green products and services into their lifestyle.   Then they graciously allowed the rest of us to take a peek at the result of their research, work, and investment of time and money to improve their homes and community.

So what was our booth all about?…there’s an EcoBroker in town!  At our little table, we gave out compact flourescent lightbulbs from a beautiful recycled bowl, and offered a sheet with the www.ecobroker.com site so those interested know where to find out more.  Susie Hughey-Haas, my business partner, recently received this certification.  She had her well worn text books available for perusal and we talked to our curious booth visitors until our throats were parched.  We had so much fun that the 4-hour event flew by.

This is a new real estate continuing education designation within the last year or two.  Susie decided to take the course when we were asked to list a new construction “green” home last year.  We did anything and everything we could to learn eco-anything as fast as possible to market this incredible property.  One of the many exciting new developments that we learned from this course is a hopefully growing availability of Energy Efficiency Mortgages.  So, in the process of working on this Listing, in addition to everything else that we do to bring exposure to a Listing, Susie studied for this certification and I wrote articles from what we learned that were published in the local newspaper.

Go green!

p.s.  The house sold and was one of the showcase homes on the Solar Home Tour this year.

What is a “normal” market for Half Moon Bay?

The towns of Half Moon Bay, El Granada, Moss Beach and Montara make up the heart of the "Coastside".  Even though I also include Pescadero - San Gregorio -  & La Honda for points south, and Pacifica - South San Francisco - & San Bruno for points north when looking at market trends, I took only Coastside numbers for this exercise.

So what is a normal market for this area? . . . Generally around 5 months of inventory.

I remember hearing people say last year that we were in a Buyer's Market when we were at 4 1/2 months.  Some of the slowdown may have been partly due to our temporary (5 months) Devil's Slide interruption.  How short our memories can be...  Beginning in 2000 inventory began to hover around 3 months.  if your listing didn't sell after the first open house, something was wrong!  Last year, I knew it was trending in a different direction as the overall market correction began its slow descent, but, in fact, it was not a Buyer's Market yet. It may now finally be the Buyer's turn as we are clearly out of our normal pattern.  In fact, last month's spike to 11 months of inventory, is quite a significant jump for this area and I would be interested to see how it compares to other areas.  We all know that part of the reason is recent lending woes.  Time to sit up, take notice, find your Realtor's business card (or call me).  Carpe Diem - with your downpayment!

 

Is it a Perfect Storm? . . .

• Historically low interest rates
• Flakey mortgages no longer available
• Unprecedented inventory (since '98; as far back as MLS will go)
• Highway 1 at Devil's Slide Tunnel less than 5 years to completion
• Highway 92 widening project underway
• Harbor Village almost open
• Wavecrest to now be open space
• Half Moon Bay roadway medians on their way to getting enough money for our beautiful strips
• Downtown Main Street continues to beautify
• Current media frenzy is a major distraction for the un-savvy (just look at your own numbers!)

For some of us, this time in the cycle of life and the cycle of buying or selling real estate, will be an opportunity.   Be sure to check out the blogs in the rest of our group, San Francisco, 680 Corridor, Santa Rosa, Oakland, and San Jose, to see status of inventory in other markets around the Bay.

Conversations around the Pool

I cringed as I drove away from the perfect mid 70’s Half Moon Bay weather to head north to Folsom, CA for a family Labor Day BBQ. In the interest of full disclosure, the weather in HMB is not always “perfect” on Labor Day (or 4th of July or Memorial Day for that matter.) Aside from the anticipation of a really fun family party was the knowledge that I would have access to a swimming pool! And the pool got lots of use in the 100+ degree heat. I love to talk real estate – whenever – so reflecting on the various industry themes that came up at this family gathering, they were quite varied. This time, the hot (no pun intended) topics were:

Mortgages  (of course!)- My sister-in-law shared that her cousin and her cousin’s spouse, both mortgage brokers, were recently laid off by their employers, one worked in Marin and the other in Sonoma. They had bought a beautiful home in Sonoma County a few years ago and she fears that they may not be able to hold on to it.

Selling the Family Estate – Another sister-in-law is getting the play-by-play stories from her mother who is a beneficiary of inherited property along with other siblings. The siblings couldn’t agree on if or when to sell, so the property listing got continually delayed. Now it’s on the market. One brother hired the Realtor, but the other siblings don’t like that person. An offer came in but it was “a low ball offer”. . . not accepted. Frustration abounds in Butte County.

To fill in the family pool or not fill in the family pool – Does it increase your property value to have a pool or not have a pool (in Marin County)? The pool was built for my dad who loved to swim. Did we (the kids) get to enjoy the pool when we were growing up and actually lived there – ooh no! They put in this great pool after we all (4 of us) moved out. Dad is no longer with us (rest his soul) and mom never used the pool. The vote right now…drum roll…:  remove the pool and create a large grassy area because the “young families moving to Marin” don’t want the liability of a pool. Stay tuned for the final decision.

“We are thinking of buying a condo in Reno.” – A year ago my cousin and his wife almost bought a bigger house with the bigger mortgage. They decided to stay where they are. Then they went to check out Reno and found a great new condo with tons of builder incentives. They decided to wait a little longer for a few other family matters to fall into place and then off to Reno they may go. It will be there “last move”. They seemed concerned that perhaps a great condo like the one they wanted may be gone, but they are still waiting for the right time.

 Don’t get me wrong, there were lots of other topics…NOT real estate related.  Let’s see…everyone hoping that my brother wouldn’t overcook the chicken…the big sunglasses try-on…more college stories for the benefit of the 17 to 21 year olds…my brother’s chicken…the fish that was late being served because we thought there was propane, but really there wasn’t…did I mention the chicken?

I just love family parties.  There is so much to talk about.  Give me your opinion, the family is probably going to read this blog!  Yes, the only thing about Half Moon Bay in this blog is that we left it for a couple of days!

Half Moon Bay Beach Condos

There are very few condo developments on the Coastside.  They are Cypress Cove Townhouses and Amesport Landing in downtown Half Moon Bay, Ocean Corners Condos, near Ocean Colony in Half Moon Bay, and the Pilarcitos Park area, also in Half Moon Bay.  In the northern tip of town known as Miramar, oceanfront townhouses were built a stone’s throw from the Coastal Trail.  In El Granada (Princeton area) are the Beach House condos, a luxury condo/hotel with fractional ownership – when there are units available for resale.

When I was reviewing the annual median price results, which I did with June median sales prices, I started with single family homes and noticed that the results were trending with the greater San Mateo County statistics.  What surprised me was the condo/townhouse market (MLS term:  Common Interest Development) June median sales price of $760K, up 20% from 2006’s $555K, and up 12.5% from 2005’s $430K.  That’s quite a jump in two years for condominiums.  Also, while the Coastside’s single-family-home days-on-the-market has increased in the last year (taking longer to sell),  the Coastside condos “days-on-market”  has decreased 24% in the last year, averaging 25 days.

We all know that statistics don’t tell the whole story, as there are many variables involved; however, this trend in our local market I thought a worthy topic.  Here’s a little info about each of the Condominium/Townhouse developments:

 

Cypress Cove – located on the east side of Highway 1 near Stone Pine Center in downtown Half Moon Bay.  These are lovely townhouses with charming patios or balconies, high ceilings, beautiful landscaping and attached garages.  A major bonus is the close proximity to downtown – just a short walk to all that Main Street – and the businesses off Main – have to offer.  A couple of many fun spots close to these townhouses are It’s Italia for a fabulous pizza, pasta dish or salad (the Salmon Ceasar Salad is my favorite, but I think it’s on the lunch menu only), or HMB Coffee Co., for soup-of-the-day, coffee drinks served in glass mugs, indoor and outdoor seating, and a great local vibe.  The median 2 bedroom sale price in 2006 was $650K.

 

Amesport Landing – These condos, some single story and some two-story, are also located downtown, west of Main, yet still on the east side of Highway 1.  Built in the early 1990’s just one block away from the all the local buzz, this complex is tucked behind beautiful mature trees and landscaping.  Great escapes from this location include M Coffee and Cunha’s Country Store.  The median 2 bedroom sale price in 2006 was $600K.

Ocean Corners - Built in the early 1990’s, these charming beach condos are within a short distance to the oceanfront golf courses, the beach, coastal trails, and the Ritz.  While these are farther away from downtown than the others, it could easily be a short bike ride.  The median 2 bedroom sale price in 2006 was $540K.  (Photo to come!)

 

Pilarcitos Park -  There are a few small condo complexes in this area on the west side of Highway 1 near the Kelly St. intersection.  These conveniently located condos offer easy access to Strawflower Shopping Center, Hatch Elementary School, Tres Amigos, well as the beaches.  The median 2 bedroom sale price in 2006 was $502K.

View Larger Map

 

There may be small 2-3 units in El Granada.  There are no condos that I am aware of in Moss Beach or Montara.  Many condos are in Pacifica, which I will save for another post.

Local Mortgage Update: From the Horse’s Mouth

Even I get overwhelmed with all the various articles on “the mortgage meltdown”, I can only imagine how someone not in the business must feel these days.  So I finally decided to ask my mortgage contacts face-to-face what is going on right now, so that buyers and sellers have accurate information. My email inbox has been getting filled lately from mortgage brokers telling me that they are still writing loans – but what the heck does that mean?  We want the facts, thank you very much… so here’s the low down on what local mortgage contacts are telling me today.

Susan O’Driscoll, Princeton Capital confirms that lender guidelines are changing almost daily.  She just showed me today’s update regarding lenders IndyMac, LandAmerica Financial, CIT, and Homecomings Financial.  In yesterday’s memo titled “The good news…”, Susan lists the loans that are available.  Compared to a few months ago, the packaging may be different; guidelines more stringent.  Some lenders may require higher FICO scores now; some may agree to the same loan but with “full documentation” instead of “stated income” only. The loans that were popular for a few years – the 100% financing with stated income, stated assets – has taken an extended vacation.  Coldwell Banker is affiliated with Princeton Capital, and local rep Susan O’Driscoll is a wonderfully knowledgeable and handy resource!

Bank of America’s Bobby Zimmer says, San Mateo County has spiked recently in foreclosures, but is still low compared to other California regions.   He reports, the biggest difference for local buyers who may be faced with a median home price of a million dollars is the limited supply of Jumbo (nonconforming) loans now available.    Bank of America is definitely writing them.  When a bank does not have to rely on the secondary market for funding AND has its own underwriting, the internal accountability is in place.  Conforming loans (under $417K) are more easily written – in part because of the backing of Fannie Mae and Freddie Mac.

A Princeton Capital report also notes that analysts estimate 60% of small mortgage brokers that existed in 2006 will vanish.  Bobby at Bank of America agrees that many small brokers that he knows are looking for a job.  There are highly professional and knowledgeable mortgage representatives and lenders out there, but you have to do your homework.

Latest update:  I did not get feedback from Countrywide in time for this blog.  So I’ll either do a follow up or we will hear from Countrywide directly in a comment.  If any other mortgage professional wants to make a useful contribution here for buyers and sellers, please do.

Quiet neighborhood reaps the benefits of P.O.S.T.

When I show our community to out of town buyers, I make a point of sharing a few reasons why this area is so unique.  One of those reasons is the work of the Peninsula Open Space Trust whose mission is to preserve open space on the San Mateo County Coast since 2001.  You may not notice their hard work as a visitor, but we enjoy its benefits every day when you live here.  So far, 20,000 acres has been preserved from future development on the San Mateo County coast.  Oh my gosh, that’s huge!  And the most recent news reported by the Half Moon Bay Review this week, that POST purchased 206 acres of Wavecrest caused a community-wide collective sigh of relief.  This work will alter the future of the Coastside neighborhoods and communities forever.

Let’s talk about one of those neighborhoods today…Clipper Ridge is a quaint neighborhood of approximately 200 homes which sits at a corner of the base of the P.O.S.T. land Rancho Corral de Tierra (which is over 4200 acres, by the way), just north of the town of El Granada.  Henry Doelger, most known for his Daly City development, bought this land in the 1960’s and, according to historians, wanted to turn this area into a resort.  That may happen yet, with Harbor Village under way.  When it became clear that Doelger’s dreams would not materialize, he sold some of his lots and built single family homes on the rest.

The ridge directly behind the neighborhood has been a natural resource enjoyed by neighborhood residents and others for many years.  From the neighborhood, one can find themselves in another world of hiking trails, native wildflowers, and drop-dead gorgeous views, and the freedom to let your mind go… To get to the drop-dead gorgeous views will take you more than just a few minutes unless you’ve been in aerobic training.  It is a bit of a hike, but worth it once you get there.  Okay, just for you, my friend Cameron is hiking “cardiac hill” as locals call it to get the photo for you.  Enjoy…

The neighborhood was developed in the 1970’s of mostly 3 bedroom, 2 bathroom.  Mostly single level homes; there are a few with a second story, and/or 4 bedrooms.  Take a walk through Clipper Ridge on a weekend day and you are likely to see young families, dog walkers, or kids on their bikes headed to the (neighborhood) park.  Perhaps some even stroll down to nearby Café Classique, the Harbor, or Surfer’s Beach.

The new E-Pro

Having been in real estate for a few years now, it became apparent that the Realtors of the future will understand how to maximize the powers of the web to better serve their clients’ needs.  Enter the E-Pro, a Realtor who has completed a course of study to better understand the ever-growing use of the internet for the real estate business.   And yes, I just completed the course.

Consumers want and need tech-saavy Realtors, even if the less tech-oriented clients don’t know it.  The industry is going through a major shift, certainly.  The real estate information available to consumers is out there… about time!  I was not a Realtor when the information was closely held in hard copy binders of brokerage offices.

I believe another part of your Realtor’s value is making sense of all the information and to communicate to you the parts that are relevant to that client’s situation.  Also, when it comes time to buy or sell a house, I still believe consumers want to work with someone who knows their local market, knows how to protect their client by clearly explaining the contract and ever changing disclosures, and knows how to competently close escrow, which I liken to landing an airplane (even though I’ve never landed an airplane, it’s what I imagine it to be like.)

 This is my first blog so I’m keeping it short!