January 30th, 2008 · 2 Comments
You heard it here first! A few weeks ago I posited that the Palo Alto market would soon see the standard Spring inventory bounce…before Spring itself.
And sho’ ’nuff…I see nary a leaf on a tree outside my window, but statistical and anecdotal signs of market activity picking up are legion.
Charts from our friends the statistical geniuses at Altos research show the traditional early year inventory bounce happening in Palo Alto — Swiss-clock-like in regularity:
- An escrow rep friend of mine says her order book is fuller than it’s been in six months.
- The manager of a mid-size local brokerage says his agents have been going on listing appointments, getting new listings, and writing offers at a much faster clip than in the last few months.
- At least one transaction in Palo Alto last week sold with multiple offers and sold for a substantial amount more than the list price.
Friend, fellow 3 oceans contributor, and Realtor Chris Iverson of The Ventoux Group says:
Listings are starting to increase, but slowly in Palo Alto. Mountain View and Los Altos seem to be off to a slower start this year than last as well.
I am seeing more activity from Buyer prospects since the beginning of the year, but a lot of them have gone back to a “wait and see” attitude following news of the potential increase in the conforming loan limit. That will have a significant effect for first-time buyers in areas like Mountain View and Sunnyvale, where $729,000 gets you a decent townhouse, or a house in Sunnyvale.
Jeff Klein at Absolute thinks it will take about 6 months from the conforming limit change for the resulting loans to be available to buyers, and for the impact on the market to be felt.
Colleen Foraker, of Alain Pinel Realtors in Palo Alto, says:
“We in the industry need to do a better job of educating sellers that this is actually a great time to sell. Inventory is at a 10-year low, and we’d love more listings. Problem is, sellers are reading the media, hearing that the market is up to no good, and deciding to wait it out.”
Steve TenBroeck, also of Alain Pinel, notes on his blog:
This past week was brutal! Last Saturday & Sunday we had the most traffic ever to come through our open houses. However, on Monday (MLK Day) foreign stock markets crashed. On Tuesday the Fed dropped the Prime Rate by ¾ of a point. And by Wednesday, according to several agents, local buyers were retracting their offers to purchase homes. Then, at the end of the week, Congress came up with a plan to restore confidence and stability in the market.
We continue to get calls from prospective home buyers who believe that it has become a “buyer’s market” in our area … The bottom line: demand for homes exceeds supply in this market place. It was reported this week in the SF Chronicle that in 2007 the Bay Area added 54, 000 jobs. It’s expected, they said, that at least 15,000 jobs will be added in 2008. While the housing market nationally and in the wider region of the Bay Area may be the slowest since the Great Depression, the housing market from Menlo Park through Los Altos is very strong; homes sell quickly, often with multiple offers.
Tags: Altos Research
, Palo Alto
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Tags: Consumer · Industry
January 23rd, 2008 · 8 Comments
Fellow 3 Oceans contributor and South Bay Keller Williams Realtor Bart Marchioni forwarded me a rather entertaining newsletter from National Building Inspectors. “Entertaining” and “Building Inspectors” aren’t normally found together…but — perhaps due to my macabre sense of humor — I couldn’t help laughing at this imagery…
Imagine a colony of termites infesting your home . Now imagine pouring orange juice on them. . Termites start drinking . Termites start dying.
Here’s what it might look like:
Ok, actually, the orange substance isn’t orange juice, but rather orange oil, or Limolene, a “terpene hydrocarbon colorless liquid with an extremely strong smell of oranges.”
And NBI is a reputable firm, so no, they wouldn’t recommend dousing your home with OJ in hopes of killing your termite housemates.
According to the NBI newsletter, they’ve been asked by many people about whether orange oil is effective at killing termites. A summary of their opinion:
- Yes, termites will be killed on contact by orange oil. (Of course, they would also be killed on contact with my foot!) Getting termites to come in contact with said orange oil, however, would be nigh impossible in the hidden wooden structures of the home — ie. in the vast majority of where you would find termites. A handy little diagram from NBI:
- Yes, orange oil will “defy gravity” — ie soak in all directions, including upwards — but, for that matter, so does water. The key problem is that orange oil apparently biodegrades after only 4 days.
The personal opinion of the newsletter’s author is that NBI “would never certify a home as being ‘free and clear’ of a drywood infestation that was treated with orange oil.”
Disclaimer: I am not a termite inspector. More importantly, I am not your termite inspector. If you have termite issues, or questions about termites, please ask your friendly professional termite inspector. Above all, do not pour orange juice over your home in an attempt to kill your termite housemates. ‘Nuff said.
Tags: Buyer and seller tips
, Home Inspections
, Limolene, NBI
, Orange oil
, Termite Inspections
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Tags: Buyer · Consumer · Industry · Inspections · Seller
Recent sightings of Vendus Encourigitis — a local Palo Alto insect that emits pheromones that make sellers drop everything they’re doing and get their home on the market immediately — indicate that 2008 may turn out to be a similar year to several of its predecessors.
Here’s how this insect affects the local inventory cycle…
Buyers, sellers, and real estate agents go into Trypophan-induced hibernation around Thanksgiving, and tend not to wake up till early January. Not many new homes come on the market during that time, and not many buyers are out looking for them. This tends to be a time of uncertainty in the market: sellers are not confident about putting their homes on the market because, well, other sellers aren’t putting their homes on the market; similarly, many buyers are spooked out of the market because they aren’t seeing crowds of competition at open houses — ergo, this must not be a good time to buy.
Putting aside all questions of whether such assumptions and actions are rational or not, come January, swarms of Vendus Encourigitis descend on the city and — kablooei!!! — before you know it, the market gets unstuck, sellers finally put the for-sale sign up, and inventory starts its predictable upward march. Shortly thereafter, a related insect — Achetus Encourigitis — begins its work on the buyers, and sure enough, they descend en masse on open houses and begin buying.
Data provided by our friends at Altos Research shows us the pattern for the last couple of years: inventory is at a low at the end of the year, and begins to increase as soon as January rolls around:
A number of nearby towns exhibit similar patterns…
What’s interesting about Los Gatos is that its beginning of the year inventory is somewhat higher than it normally is. Arn Cenedella* of Coldwell Banker notes a similar pattern in Menlo Park real estate, while Dave Blockhus*, also of Coldwell Banker, notes that Los Altos’ real estate inventory pattern is more similar to Palo Alto’s.
Further up the Peninsula, Burlingame has a similar pattern:
Roughly the same trend happens in many of the marquee towns up and down the Peninsula, while in the less tony towns a completely different picture is emerging — more on that in a later post.
* Dave and Arn are both clients of 3 Oceans’ sister company Domus Consulting.
Tags: Altos Research
, Coldwell Banker
, Menlo Park
, Palo Alto
, Real estate
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Tags: Altos Research · Buyers · Consumer · Palo Alto · Sellers