Daniel Pizano, Realtor in San Jose CA real estate agent, broker, Coldwell Banker blog

Daniel Pizano, Realtor in San Jose, CA and 10 year real estate pro. Blog author, local San Jose real estate expert he writes about the latest real estate news, trends, market statistics, housing data, property sales reports affecting single family and condos in Santa Clara County. He covers the Bay Area, Silicon Valley, and Northern California. Broker Associate with Coldwell Banker Los Gatos office.

Third Straight Month of Decline in September 2015

October 29, 2015 By dpizano

US Housing Data in September 2015

The national median existing home price in September 2015 was $221,900. Which is an increase of 6.1% from a year ago. Last year the median price was $209,100. However, on a month to month statistic, it is the third straight month of decline. According to Lawrence Yun, Chief Economist for NAR, “This (decline) always occurs after the summer months, there’s no surprise.”

Lawrence Yun explains, “Despite persistent inventory shortages, the housing market has made great strides this year, backed by an increasing share of pent–up sellers realizing the increased equity they’ve gained from rising home prices and using it towards trading up or moving into a smaller home.” He explains the first time home buyers challenge, “Unfortunately, first time buyers are still failing to generate any meaningful traction this year.” When compared to the entire buying population, first time home buyers fell to 29% of all buyers in September of 2015 after climbing to their high’s of 32% in August 2015. Last year the first time home buyer was very similar and made up 29% of all buyers.

California Housing Data for September 2015

When we look at the housing data on a statewide level. September’s statewide median home price was $482,150 which is down 2.3% from August 2015. The median number of days it took to sell a single-family home edged up in September 2015 to 32.6 days compared with 29.9 days in August 2015. The Bay Area is the only region where homes are selling above original list prices due to constrained supply with a ratio of 102.4% in September 2015, up from 101.2% a year ago September 2014.

Santa Clara County data on SFH September 2015

September SFH Property sales were 941, up 3.2% from 912 last year September 2014 and -7.9% lower than the 1,022 sales last month in August 2015. January through September 2015 Year To Date sales of 8,363 SFH sold are running 6.6% ahead of last year’s YTD sales of 7,846 SFH Sold.

Median SFH Sales Price in September 2015 was $950,000, up 11.9% from $849,000 in September of 2014 and down -1.7% from $966,200 last month in August. The Average Sales Price for Single Family Homes in September was $1,232,555, up 11.8% from $1,102,154 in September of 2014 and down -0.9% from $1,244,275 last month in August 2015.

Total Inventory of SFH Properties available for sale as of September was 1,450, up 4.7% from 1,385 last month and down -7.1% from 1,560 in September 2014.

Average Days On Market (DOM) for SFH shows how many days the average Single Family Home is on the Market before it sells. An upward trend in DOM a buyers market, a down trend a sellers market. The DOM for September 2015 was 22 Days On Market which remained unchanged from last month in August but down -18.5% from a 27 Days on Market in September 2014 last year.

September 2015 Selling Price per Square Foot for SFH of $656 was down -0.2% from $657 last month and up 11.4% from $589 in September of 2014.

September 2015 Selling Price vs List Price for SFH was 103.7% was down from 104.7% last month and up from 103.5% in September of last year. For example, if a home is selling for $100,000 they sold it at 103.7% higher or at $103,700 in September 2015 but would have received $104,700 in August 2015. So the overbidding on homes has calmed down a bit.

Real Estate Market Slows Down in August

September 26, 2015 By dpizano

According to the California Association of Realtors there were 431,800 single family homes sold during the month of August. This figure is -3.8% from July of 2015 but is +9.3% from August of last year.

One of the market indicators that tell us how the market is doing is the “sales to list price ratio.” This Sales To List Ratio is approximately 98% in all parts of California except the Bay Area. In the San Francisco Bay area the Sales to List Ratio was 103.4% in August 2015 and last month even higher at 104%. This means that if a home was on the market for $100,000, it sold over the asking price in the San Francisco bay area for $104,000 in July and $103,400 in August 2015. Everywhere else in California it would have sold for $98,000.

On a national level, sales were also down in August 2015. Sales of existing homes, condos, townhouses, were down 4.8% from July 2015.

According to Lawrence Yun, chief economist for the national Association of Realtors, “Sales activity was down in many parts of the country last month — especially in the South and West — as the persistent summer theme of tight inventory levels likely deterred some buyers. The good news for the housing market is that price appreciation the last two months has started to moderate from the unhealthier rate of growth seen earlier this year.”

The FED is expected to raise interest rates later this year in December. This could have a negative effect on the housing market in general because a buyers mortgage payment would go up with the higher interest rate. As a result, buyers may have a more difficult time qualifying for a loan with prices going higher and interest rates higher.

Sales Are Starting To Slow Down in May 2015

June 18, 2015 By dpizano

Market data on Single Family Homes in Santa Clara County

Closed-Sales-SantaClaraCountyCA-May-2015 — Closed Sales Santa Clara County CA May 2015

Home Sales in Santa Clara County

Data from MLS Listings show the number of single family homes sold from April 2015 to May 2015 went down 6% in Santa Clara County. This is significant, especially during a time in when the spring is here and buyers are out in full force. Or are they? Home sales are slowing down in Santa Clara County this year.

Single-Family-Homes-May-2015-vs-April-2015

This slowdown may be a knee jerk reaction of buyers pulling back a bit due to any number of factors including interest rate fluctuations, high home prices, the economy, and lack of inventory. Either way, it’s a pull back and the sellers should take notice. The market will shift at some point. It’s important that we notice when there is a slow down in sales from month to month especially when inventory has gone up 32% from last year and 3% from April 2015 to May 2015. Perhaps the price increases have bumped some would-be buyers out of the market.

Sooner or later the price increases will be more than the average buyers can afford. Prices have gone up quite a bit from last year. In fact, the median price in Santa Clara County for Single Family Home went up 12% from May 2014 to May 2015. Affordability is becoming a very important factor in Santa Clara County.

Single-Family-Homes-May-2015-vs-May-2014

Inventory in Santa Clara County in April 2015

May 24, 2015 By dpizano

Inventory Level in Santa Clara County is on the Rise

The Housing Inventory in Santa Clara County has come up. In Santa Clara County we had a 9% increase in inventory from March 2015 to April 2015. Meanwhile the median price as also gone up 3% from March to April.

When we look at last years inventory in Santa Clara County it is a huge difference. Last year there were 1,573 Single Family Homes on the market. This year in April there were 2,264 single family homes on the market. That is an astounding 44% increase from last year. That’s good news for the buyers who find themselves competing in multiple offer situations throughout the county.

Contact Daniel Pizano for more information on how to navigate this real estate market and win.

Cambrian Park Area in San Jose Getting Multiple Offers

March 3, 2015 By dpizano

Cambrian Park in San Jose CA

Cambrian Park real estate is very active in San Jose

Zip code 95124 Cambrian Park area received 8% over the list price.

Cambrian area San Jose Median Housing Price — Median Sales Price to Median Sales Price Ratio in San Jose Cambrian area

Real estate is a local business. In fact, real estate is hyper local with Cambrian Park real estate. Cambrian Park is an established area within San Jose with much to offer buyers looking for a great p;lace to live.

It is very important that buyers and sellers hire an agent who is an expert in the local real estate market and understands the market. A neighborhood specialist.

I work in the Cambrian area and sell many homes in this area of San Jose. As a real estate professional it is important that you specialize in a neighborhood or small area. We call this our geographic farm. Take a look at the chart and see how Cambrian’s Median Original List Price to Median Sales Price did compared to other surrounding areas,

Cambrian Park real estate is in High Demand from San Jose Buyers

The graph indicates how much over the list price the homes in San Jose, Willow Glen, Cambrian 95118, Cambrian 95124, and Campbell sold for. Cambrian zip code 95124 got the most over the list price.

The graph let’s us know that the Cambrian area (zip code 95124) receives the highest accepted offers and sales prices when compared to their original list price. For example, a home is listed on the market for $800,000. The original list price is $800,000. In Cambrian 95124 the $800,000 home sells for $864,00 or 108% of the original listed price.

Cambrian 95124 is hot right now and the multiple offers continue to happen. This graph was data from CoreLogic. Fast forward and homes in Cambrian 95124 received 104% on average since November 2014 and this percentage jumped in January to 108%.

Cambrian Park is very diverse and schools are a factor in high buyer demand

This shows us that buyers are bidding up Cambrian Park real estate. I know and understand Cambrian and how the Cambrian area is broken up into sections. The area that I am very familiar with is south of the 85 freeway. This area is well known for having excellent schools and safe parks and streets. I mainly farm the area around Leigh High school, Noddin Elementary, Alta Vista Elementary, Carlton Elementary, Lietz Elementary, Oster Elementary, and Guadalupe Elementary are excellent schools. The middle schools are Dartmouth Middle and Union Middle, Both are standout schools. Leigh High School is an excellent high school with an awesome music program and great sports and academics. These Union schools are driving the home prices higher in the Cambrian 95124 area.

Buying a Home With Solar Panels

February 5, 2015 By dpizano

SOLAR PANELS AND BUYERS: WHAT YOU NEED TO KNOW

Buying and selling a home with solar powered electricity is becoming more and more common these days. As a buyer you should be aware of some pitfalls. As a seller you should know how it affects the sale of your home. Either way, understand that solar power is something that will be more and more common as we move closer to being more environmentally conscious.

SAVE LOTS OF MONEY

Schools

There is no doubt that solar power can save you money. Local San Jose high schools like Leigh, Branham, Leland, and Pioneer have all converted to solar power. The solar arrays in the parking lot do more than just provide shade to the cars below, they save the school millions of dollars in electrical expenses. The Campbell Union High School District was paying an electric bill of $900,000/yr and now pay $135,000/yr ($765,000 savings per year).

State and Federal Credits and Rebates

The state of California with the partnership of PG&E and other utility companies started the CSI (California Solar Initiative) which was a solar rebate program to spur interest in solar panel installation. The program was so popular that they ran out of funds.

The federal government still offers a 30% percent federal tax credit for the purchase (not for a lease) of a solar power system on a residential home. This is a tax credit that reduces the taxes owed. So if you purchase a $25,000 solar system, the credit would be $7,500.

The savings are there. The incentives are there. However, the solar powered system can be tricky when you are dealing with buying or selling a home with leased solar panels.

SELLING WITH STRINGS ATTACHED

Features and Benefits

Now lets discuss the buyer’s reaction to buying a home with solar power. Most buyers will look at this as a positive feature of the home and a benefit to them. They know that when they buy the home they will save money and feel good about being green.

Also, the idea of running their electricity without worrying about the electrical bill is nice for someone on a budget. For example, you might enjoy having your air conditioning unit on every day of the summer without paying extra.

Take Over the Lease

What happens if the buyer discovers that the seller actually leased the solar system and they need to agree to take over the lease? This now becomes a condition of the home purchase. The seller can’t just go up on the roof and remove the panels and say “all done.” This is when most buyers get worried.

I showed a home in Blossom valley that had this “take over lease” stipulation. The new buyer would have to take over the lease. The new buyer was asked to apply for the lease and get pre-approved. The solar company was prepared to run credit on the new buyer to make sure that they can qualify for the lease. My buyers liked the home but hated the idea of a long term lease. Especially when they never agreed to it, the seller did.

If you’re faced with the possibility of buying a home with a solar lease, you may feel the same way. The first question is how much is the lease payment? The next question is how many months are left on the lease? The buyer may discover that the seller has 20 years left on the lease. This is a huge turn off for many buyers.

BUYERS CAN’T GET A LOAN

Borrowing Money Got Harder

Fannie Mae has just released their new guidelines on homes with solar panels. The main thing that stands out in my mind is that the lease payments will now be factored into the buyer’s Debt To Income ratio.

Accepting a home with a long term lease is one thing, but having the lease payment count against you is another. If the buyer is at 42% on their debt to income ratio and now the home that they want to purchase has a lease payment of $200/mo, they may not get the loan. The lease payment may end up killing the deal.

Disclose Your Solar Lease Upfront

This can be a huge waste of time for the seller, buyer, agents, loan officers, and all others involved in the transaction. It’s important for the seller to disclose this information upfront even before anyone makes an offer. In fact, it should be on the flyer.

OTHER FACTORS

General Liability Insurance

Another Fannie Mae guideline is that the owner of the solar panels must have a general liability insurance policy that covers damage to the mortgaged property caused by faulty installation, malfunction, or other manufacturing defects, whether or not covered by the warranty.

Lien on the Property

With a solar lease there is a good chance that the solar company has a lien on the home. This lien has to be addressed when you sell the home. The lien can be removed once the owner of the home completes the lease and purchases the panels.

Buyout the Lease

One of the best options that a seller can do is to find out what the lease buyout is. The solar company can provide the cost breakdown in the event of a sale. A good option is for a seller to pay off the solar lease and hand over the solar power system to the buyer free and clear. No payments and no worries on the lease payments counting against the buyer.

But then again, in this fast-paced real estate market (like in San Jose, CA) with multiple offers, you may be able to easily find buyers who will assume the lease with no issue at all.