Silicon Valley Real Estate

Buying homes in Silicon Valley during a "buyer's market" takes courage. Doom and gloom grace the cover of the newspaper and online articles. Everyone has a bad story to share about someone else who lost a home, or had a bad experience trying to buy a short sale or distressed property. Perhaps most of all, at work or in social circles, friends and coworkers will advise you "if you wait, you will get it for less".

This is what always happens in a buyer's market. Folks who are themselves afraid of taking the plunge talk loudly about why buying a home in San Jose, Campbell, Monte Sereno or nearby is not a good idea right now. 

When would all of these people say is the "right time to buy"?

Everyone wants to buy low and sell high, whether it's in the stock market or in real estate. Timing the exact bottom or exact top is impossible. In fact, we only know we've hit it once it's past. Once the bottom has been identified by the populus, guess what? All the fence sitters jump in. Demand rises faster than supply. Prices go up.

Now may or may not be the right time for you to buy. It may not be the right time to buy certain types of homes in certain areas. An example that comes to mind of what NOT to buy is in parts of the distressed market. Buying in areas & pricepoints where foreclosures are rising would not be my professional advice to anyone. As those numbers swell, prices will be pushed down.

But there are many healthy markets and pricepoints where there's simply a soft spot in the zone where you want to buy. In recent days I've looked at the condo and townhouse market in several upscale parts of the valley such as Los Gatos, Saratoga, and Almaden Valley. For some reason, townhomes and condominiums in these lovely areas are taking a bit of a beating right now compared to the single family home market. This appears to be a nice buying opportunity. Real estate in these west valley neighborhoods is usually beyond reach for many people. Right now, though, you may be able to get your foot in the door.

Additionally, there are some markets in which single family homes are selling very well (especially in Palo Alto, Sunnyvale, Mountain View). For Silicon Valley seniors who'd like to downsize, this may be an ideal market. Sell the home in a strong market, buy the retirement condo in a buyer's market. What more could you want?

It is also a very good time for buyers who are bringing their money in from Europe as the exchange rate makes a home buy anywhere in the US a great bargain. This is even more true if one is a renter now, as rents are going up!

There are no easy answers as to when the best time is to buy or sell for everyone, because each person and each market is unique. Your individual circumstances, from your available savings and credit report to your job situation, will have a huge impact on how the market looks to you.  That said, the current market presents great opportunities to the saavy consumer who's willing to study and weigh the precise market situation that they are in as buyers or as sellers.  Rather than sitting on the fence because that's what most everyone seems to be doing, it might be the perfect time to plunge in. Only with a little research will you know if this is what's best for you and your financial future.

When you hear the easy answers, whether it's "buy now!" or "sell now!", know that Silicon Valley real estate never has been so simplistic as to warrant a one-size-fits-all answer. Get good data and good counseling to make a good decision.

Whether you are looking to buy a condo, townhome, patio home, or single family home in Silicon Valley, it's imperative that you revisit the neighborhood multiple times before deciding to buy (or to complete the purchase). This is an important part of your "due diligance" as a home buyer.

Why revisit so many times? Because certain key things may differ from hour to hour or workday to weekend day:

• - noise levels
• - the number of parked cars on the street (few is good, many suggests overcrowding)
• - neighborhood activity (good or bad: people strolling, walking dogs is a good sign - too many yard sales or other activity may not be a plus)

If you visit on a weekday morning or afternoon, the street could be relatively free of cars and other vehicles, but it might be entirely different on a Friday night or Saturday afternoon.

Conversely, if the neighborhood appears consistently appealing, quiet, well kept, and not overcrowded or loud, that's something to appreciate as you factor in which home to buy. You can usually remodel your own home, but it's very difficult to do a makeover on the street where you live - so investigate throroughly before you buy, whether it's in San Jose, Campbell, Saratoga, or Los Gatos. You will be more sure of your decision and happier with the results if you do your neighborhood homework upfront.

Many Silicon Valley home sellers want to sell their homes As Is. In the case of short sales, it is likely that the sale will be As Is, and with foreclosed or bank-owned properties, you can be fairly sure that it will be an As Is sale.

But what does that mean, exactly?

As Is means that the home will be conveyed to the buyer at the end of the transaction in the same general condition it was in on the day that the buyers wrote the offer. If the roof has leaks, the crawl space is full of termites, and the appliances do not work, that is how it will be on the day escrow closes.

What it does not mean is that the seller can let the property condition deteriorate. The seller must continue to maintain the home and land in the same general condition. So if the lawn was green and well trimmed, the seller cannot suddenly let the grass die and neglect to mow it.  If a baseball breaks a window after the buyer and seller have a ratified contract, the seller must repair it. The condition will not have to be better, but it should not be worse, either, than on the day the buyer and seller agreed on the price and terms of the sale.

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Did you know that there are some things which your Realtor (or real estate agent) is prohibited from discussing with you?  This is a surprise to many Silicon Valley home buyers.

Fair Housing Laws prevent real estate professionals from telling consumers certain types of information, particularly demographic information, anywhere in the United States. For instance, your agent cannot discuss with you these things:

• where racial groups have the highest concentration
• where people are found by religious affiliation
• where certain languages are spoken or not spoken
• whether or not there are halfway houses for alcoholics nearby
• if neighbors are mentally ill

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What makes a Silicon Valley house a luxury home? How is high end real estate different from the rest of the market? When is a property not just a home with land, but an estate?

In other parts of the U.S., spending $700,000 will fetch a 4000 square foot home, new construction, in an upscale gated community with country club amenities such as a golf course, tennis courts, and more.  Here, that same $700,000 will procure an entry level single family home in many parts of Santa Clara County.

Luxury connotes a combination of qualities, features, and amenities.  And it includes pricing (relative to the nearby market), condition, land, design.

Pricing Luxury Homes in Silicon Valley: What Do They Cost?

Expensive Silicon Valley homes are not necessarily luxury homes. Depending on the city or town, the price tag could be higher or lower. For instance, a fabulous house on a large lot in Gilroys Eagle Ridge might sell for 1/3 as much as the identical type of home, land and neighborhood found in Saratoga, Monte Sereno, or Los Gatos, if a similar home happened to be available. Generally, though, luxury homes could cost as little as $1,000,000 or so in some parts of Silicon Valley or in neighboring counties, but in most parts of Silicon Valley, a true estate type property will be valued at $2,000,000 or $3,000,000 or more.

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 Natural Hazard Reports are included in the disclosures when homes are bought and sold here in Silicon Valley. Those reports will indicate whether or not the property is located in areas with known natural hazards, including 

• Flood Plains
• Liquifaction Zones
• Earthquake Fault Zones
• Unstable Soils Areas

But wouldnt you like to know where those places are before ever writing an offer?

Many Realtors utilize a tool that combines this natural hazard information with other boundaries that may be of interest to you, such as zip code lines, town boundaries, school district boundaries, district names within San Jose (like Berryessa, Cambrian Park, Evergreen, etc.) and so on. This is the Barclays Locaide and you can buy it online or in Realtor stores in the San Jose area. They arent cheap at just under $60, but they are extremely helpful and worthwhile for having a sense of where the issue areas are in Santa Clara County.

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Homebuyers sometimes call or email me, explaining, 'I want to buy a home so that my child can go to Williams Elementary in Almaden Valley or 'I want to buy a house and have my kids attend Alta Vista Elementary School in Los Gatos or 'If I purchase a condo in downtown Saratoga, my son or daughter will be able to attend Saratoga Elementary School.

Usually.

But its not guaranteed. Schools tend to drive real estate values here in highly educated Silicon Valley. But we dont have as much control of this slippery issue as most might think.

It is a big mistake to believe that if you purchase a home in a certain location, youll be guaranteed that certain school. Lots can happen.

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