Belmont Buyers–Now’s Your Chance

                                                                                                                                            Dsc_3909hallmark_2007Lots of large homes are on the market in Belmont while the inventory of homes for sale is  reaching a high not seen since 2003. Just 22 of the 52 homes for sale are listed under $1,000,000; while the median home currently for sale is just over 2,000 square feet, the median home in Belmont is only 1550 square feet.

And Inventory levels have hit near all time highs. There are currently 52 single family homes on the market and only twice in the last ten years has there ever been more—both times the U.S. was in a business cycle trough—the 2001 recession and again in 2003 during a mid cycle slowdown. We expect inventory level to grow even more in May and June of 2008.

In the past ten years there never has been a month with fewer sales than last month—March 2008 where Belmont had only five sales, except for the month before when there were only four sales. Normally, Belmont will have on average 23 per month; percentage-wise that equals only 18% or normal.

If you’re a Belmont seller and trying to sell during the peak period to obtain the highest price that window of opportunity has already passed. If you are a buyer interested in Belmont, there’s plenty to choose from and we expect favorable buying conditions to continue for at least the next year and probably well into 2010. But timing the market can be a fool’s game. While waiting for home values to drop interest rates may rise, offsetting any monetary gain.

Plenty of buyers have been waiting years for an opportunity such as the current buyer friendly market conditions to purchase a home—well, now’s their chance.

The Numbers Just Don’t Jive with many Buyers’ Sentiment

Buyers have bought one thing–that’s the media’s pounding that home value are falling. Indeed they are in a lot of areas, but if you want to live in San Carlos, CA and are waiting for prices to drop, don’t hold your breath too long.

I recenly did this anaylsis for a client who wondered if their home values have dropped. They bought in an excellent area of San Carlos four years ago and paid the then prevailing purchase price in multiple offers of $885,000 for a three bedroom, two bath home which is approximately 1650 square feet.

The follwoing is my brief analysis for them:

The home which just sold on your street is not a bad comp, but it’s not the best either. Logically it’s the same size, in near proximity and (I suppose) condition, yet it is lacking the very things that attracted throngs of buyers to your house when you bought it—character. People pay dearly for that in San Carlos.

Have the values gone down recently? Everyone believes they have but the numbers do not bear that out. Your home might have sold for more in 2005/2006 but that would probably have to do with the overbid process which has diminished, but not disappeared. Unless you are planning to move soon I’d just hang in there and it will almost certainly be even higher in the next few years.

I have included data going back to 2004 when you purchased your home. I specifically targeted sales comps that were 3 bed 2 baths and between 1500-1600 square feet. I know when you bought your home the seller claimed it was 1650 and it may be (look at your appraisal and you’ll get a better idea), but the county has it at 1540 so that is the range I used for comparison. If your home is indeed larger, than you’ll be in even a better position than my data suggests.

I hope this helps you understand our fickle market.

Some interesting facts:

The median price for comparable homes has been going up since you bought your home. Notice that the exact same size homes sold in 2004 and 2007 making the appreciation data extremely accurate. This data concludes a 26% increase in the median home price from 2004-2007; which if applied to your home’s purchase price would suggest it to be worth $1,115,000. Straight-line appreciation numbers are flawed though in part because the reason homes have gone up in value that much is the typical homeowner will put in excess of $100,000 into their home. Factoring that in, the appreciation levels are almost half so if you’ve done nothing to your home you would be closer to $1,050,000. Don’t even try and follow the numbers exactly because I’m factoring in a slight bump for the intangible “WOW” factor of your home’s appeal.

Median Price

2004

$825,500

2005

$977,000

2006

$996,500

2007

$1,042,000

You purchased your home at $885,000 in March of 2004 when the median price for the 3/2’s was $825,500.

Your home was probably larger than the median home at the time. At 1540 sq. ft. your home sold for $574 per sq. ft. and it was truly 1650 sq. ft. it sold for $536 per square foot. The median at the time was $532 per square foot:

2004

2005

2006

2007

$ per Sq. Ft.

$532

$639

$633

$686

But the median home size was also smaller—smaller homes sell for more per square foot:

2004

1560

2005

1530

2006

1570

2007

1560

Notice how the median price for comparables homes is more-or-less in step with the median appreciation:

Scl_median_graph

In summary, depending on the current condition of your home and the improvements you may have made, your home is probably worth $1,050,000 on the low side to $1,150,000 on the high side.

Belmont’s Nesbit School is Awarded the Coveted California Distinguished School Award

Belmont’s Nesbit School Receives Coveted Distinguished School Award

School_award 

This is the thrid Belmont school to have received awards for their academic excellence.

This year the California Distinguished School award went to Nesbit School for reaching the milestone of overcoming significant academic challenges to be honored as the recipient of the award.

Previous awards went to Central Elementary and Carlmont High School.

Congratulations to Nesbit’s staff, the students and their parents for working together to achieve this lofty goal.

Visit Morganhomes.com for more information on Belmont Schools

April 10th Tax Deadline

April 10th is the last day to pay your property taxes in California for the second installment. Many people wait until the April 10th deadline to pay their property taxes (though they are actually due February 10th) becasue there’s no penalty until after the April deadline.

Taxes

The fiscal year for California property taxes runs from July 1st through June 30th of each year, which is why your property taxes cover those specific dates. There are two payment vouchers, one for the first installment and another for installment number two. Installment number one is collected in arrears in November as it covers the time period from July 1st through the end of the year. This payment is due November 10th and delinquent December 10th of each year.

The second installment is due on February 10th but the tax collector gives you and additional 30 days to make this payment as it is not delinquent until April 10th.

For those trying to get all the airline miles possible, there’s an easy on-line payment option but be aware that a 2.5% surcharge will be applied for this convenience.

IF WE AREN’T ALREADY IN A RECESSION, WE COULD BE SOON

Bad_news A front page article in the Sunday edition of the San Francisco Chronicle titled "Lenders Retreat as Market Plummets" (Sam Zukerman-staff writer April 6, 2008) may frighten some people into cashing their home equity line checks fast.

The article states that many banks such as Bank of America, Country Wide Financial and Washington Mutual are freezing homeowner’s equity lines in fear of losing more money to foreclosures. Let’s hope Wells Fargo continues to believe in the Bay Area like Bank of America used to.

This could spell a downward spiral as lenders cut back on honoring equity lines that might just be the thing which could keep some folks from losing their homes. The opportunity to tap into existing equity to forestall a foreclosure, even just pay the bills may be just the shot in the arm credit worthy people might need yet now many banks appear poised to pull the plug.

Of course bank don’t want people spending their equity line of credit like they used to-especially if home values in their area have dropped significantly; but cutting them off may just send many more of their customers to the front of the foreclosure line.

IF WE AREN’T ALREADY IN A RECESSION, WE COULD BE SOON

This could spell more doom and gloom in the economy as less available cash for spending-or simply knowing that emergency cash flow could be cut, will likely be the nail in the coffin for economic growth this year.

It’s a calculated risk on the part of the banks-at least we hope they have calculated it. They don’t want to throw good money after bad but by freezing equity lines when people need them most they could mean they end up taking back more property than if they left these loans in place.

Red Lantern in Redwood City-A Feast for the Senses

If you want to try a restaurant that has an upbeat edge to it the Red Lantern in Redwood City will hit the spot.

Red_lantern

We read…"Owner Jeffery San Diego Viognier and MC2 has assembled a team that includes executive chef of Betelnut in San Francisco." The ambiance is very clubbish, a little loud, downright dark, but intriguingly decorated with an Asian flare.

Do: Get a reservation

Don’t: Order all your dishes at once or you’ll be swamped with food served with complete disregard for vegetarian specific patron requests or the pairing of sides with entrees.

THE FOOD

The fare offers a wide selection of Asian, Indonesian, Thai and Philippine influences. Think of your favorite upscale Thai restaurant and multiply it times 10! This restaurant does not apparently know the meaning of the word subtle. Everything we had with the exception of the Rangoon Clay Pot fish was flavored over the top and in your face but the food works and certainly stands up to the generous cocktails they promote at the bar.

It’s best to go with a group of friends—if you’re adventuresome you’ll want to try as many dishes as possible. There’s a section called Delightful Bliss which could be equated to the appetizer section of most menus. In most restaurants this section is where you’ll find some of the chef’s best creations and the Red Lantern is no exception.

All of the dishes can be shared family style or you can stake claim to one all for yourself. One of our guests was a vegetarian and she felt quite comfortable with the menu’s varied selections.

We started ordering from the small plate section and no sooner did we do so than dishes started arriving. Next time I plan on pacing the kitchen since the wait staff we dealt with didn’t—they tend to really crank out the food fast and furious.

First to arrive was the Poke Tuna ($10) (which I’ve had before) and is by no means a belly filler. Despite its overly salty flavor the Tuna was fresh and enhanced with a drizzling of sesame oil which delivered an Asian flare. The four of us could have easily had two orders of this but we opted to save our appetites in order to try as many dishes as possible.

Next we simultaneously received an onslaught of small plates; six shelled Westcott Bay oysters with a sweet dipping sauce, Balinese seared bay boat scallops ($10) severed over crisp coconut rice, their Adobong Pinoy ($9) pork short ribs with Adobo sauce and black pepper, and the Lumpia ($7) vegetarian taro egg rolls were fried perfectly and served with their sweet chili dipping sauce—an excellent value.

Disappointingly the Oysters were minuscule and couldn’t stand up to the overly sweet sauce. At $18 for six these were a letdown.

The scallops are served three to an order and since there were four of us our waiter thoughtfully told us he’d have the kitchen make us an extra one. Unfortunately, he promptly forgot. Having received only three I didn’t want to intrude on the others and passed on that dish; though everyone who ate them said they were delightful and at $10 they seemed like a fair price for their size.

The short ribs at ($9) were good but tasted boiled not broiled and lost some of their flavor in the process—always a trade-off when the chef tries to make fall-off-the-meat ribs; though the accompanying Adobo sauce was nice, it wasn’t as spicy as I would have imagined it should be with Chipotle peppers.

A healthy portion of the Adobo eggplant arrived which was nicely spiced if a tad bit overcooked.

We took a short break and ordered another round of their house Mojito and waited for several main courses and side dishes which we had wisely ordered well after our small plates.

The service was a little scattered and our drinks never arrived until well into our main courses. Their system employs food runners which mean you often get your food fast and hot out of the kitchen but you’ll have a hard time tracking down your waiter when you want them.

Somewhat incongruently the Crab Fried Rice ($9) (a house specialty we were told), and their Oseng Oseng Buncis ($10) spicy green beans reminiscent of those at Betelnut , Chiang Mai ($9) or green papaya salad (named after its Thai roots) with Kaffir lime leaves, and the Siamese Beef Salad ($9) were plopped at our table before the main entrees arrived.

The crab fried rice is good if not a bit expensive for what you get—essentially a bowl of fried rice with bits of crab.

I’ve had more exotic beef salads at some local Thai restaurants but I’m not complaining. It had a nice blend of flavors including fresh basil and lime and the sprouts were crisp with the meat cooked perfectly medium rare. The Green Papaya salad ($9) we shared was served dressed excellently in a traditional Thai sweet sauce but the few small shrimp they threw in were utterly unnecessary and flavorless.

The green beans may be pricey but worth a try at least once. The menu says they are in a Palm Sugar Soy with more Kaffir lime leaves but they also give them a dousing of what seems like Thai red chili sauce—nice touch.

At $22 (the most expensive dish on the menu) the Rangoon Clay Pot consisted of the freshest Chilean sea bass I have ever tasted swathed with mushrooms and a black bean relish. Though I would rather see them serve a more sustainable alternative to Chilean Sea Bass, I thought it simply one of the best I have had and worth every dollar they charged for it.

Since I like spicy and I mean spicy as in hot food, I ordered the Chicken Rendang ($14). Cooked in a thick coconut broth with chilies and galangal this dish was absolutely delicious and a meal in itself.

Of course we were stuffed beyond belief but having felt we were close to conquering a good sampling of the menu, we continued and ordered the Putri Nanus—a Pineapple upside down cake with vanilla bean gelato and warm cinnamon sauce just to punish ourselves. And that we did. That dish added another $8 to the bill and offered no satisfaction whatsoever. The cake itself tasted more like Pillsbury shortbread and it was dense and, well, unremarkable.

Total bill for all this $205 including two rounds of cocktails—the cab ride was extra.

Pros:

  • Multiple variations of ethnic foods prepared sometimes flawlessly
  • Lots or thoughtful vegetarian dishes for everyone to enjoy—not your perfunctory meatless variation of another dish
  • Affordable pricing—you can go all out or attempt some self discipline

Cons:

  • A little loud and the dining area gets turned into a weekend night club dance floor so they sort of rush you out at the end (11:00).
  • The wait staff seems disinterested in firing orders to the kitchen in any order that makes sense to the patrons.

But don’t get me wrong. I’m absolutely going back.

Situated near the newly redeveloped downtown section of Redwood City just off Broadway at 808 Winslow–(650) 369-5483.

Get their full menu here

or visit their web site.

Drew Morgan, the author, Ex-chef and Restaurateur, now enjoys being a guest.

Belmont Market Update-March 2008

BELMONT’S MEDIAN HOME VALUE IN MARCH

Belmont’s median price rose $13,000 in March of 2008 to $984,500 from $971,500 in March 2007—a 1.3% increase. As always, we further examine the median size home to see if larger or smaller homes selling during the sample period could influence the numbers. Since the median size home for both periods was essentially the same, no adjustment was made this month.

Belmont_march_2008_stats_2

SALES CONTINUE TO BE DOWN

Only 14 homes closed escrow in March as compared to 28 for the same period last year—clearly underscoring the unease in the housing market and the economy as a whole.

STRIKING A BALANCE

The existing inventory of homes for sale is lower than usual for this time of year which helps bring equilibrium to the supply vs. demand impact on housing prices. Factors which are not as readily born out by statistics can also influence local housing values such as sellers who feel no pressure to sell and hold firm on their price. One indication of that can be seen in the time it takes a home to sell, or the “Days on Market “statistic, (DOM) which has doubled from 9 days in 2007 to 18 in 2008.

Allow Me to Think Out Loud…

Thinking The San Francisco Chronicle just splashed more bad news about the housing industry all over the front page of the Friday (March 14th) issue. Sales are down-way down. Part of the explanation seems to be that tightening lending standards have made it hard to afford a home since qualifying at artificially low teaser rates is no longer acceptable. Stated income loans are only available for self-employed individuals and Wall Street stopped buying mortgage backed securities so rates are up too.

Of course buyers who have been priced out of the market are now waiting to jump in at the bottom, which only adds to the rapid decrease in sales activity.

Timing couldn’t have been worse for Congress to approve raising the ceiling on federally backed mortgages from $417,000 to $729,950 in the Bay Area. Many buyers considering purchasing a home are enticed to wait out the market a little more to see if rates will drop further.

So if we had a crystal ball, we’d say that when the new higher conforming loan cap goes into effect, it’s just possible that many buyers will get off of the fence. And if they all do that at the same time, there just possibly could be competition once again for housing.  The biggest fear if you’re a buyer is you get in the market too early and your home’s value could go down before it goes back up; that’s a horrible position to be in if you have to sell while it’s down. The alternative is to get lucky and time it perfectly, or wait to see values going up and be assured you didn’t get the best deal. I don’t know for sure, but history tends to repeat itself and I’ll bet home values go up again sometime in our future. While everyone’s trying to guess when the bottom is not everyone will get it right.

Maybe buying before that happens would be a good idea. If rates do go down further, one could always refinance…

Redwood Shores Market Update for March 2008

Notice how the reported median price in 2007 was up 3% over 2006. We adjusted for the fact the median size home which sold in 2007 was 100 square feet larger. Accounting for larger homes selling, Redwood Shores actually experienced a median price drop of 2.27% in 2007, or perhaps better stated swing of 5.27%. In our estimation this is critical information buyers and sellers should know. Yet it is unavailable to the general public due to the enormous time spent performing manual calculations.

(Click on the picture for a full size illustration)

Go to our web page at MorganHomes.com and click on "How’s The Market" to read more interesting stats on Redwood Shores.

Rws_median

Belmont’s Market Report-February 2008

February sales data for Belmont is available but there’s not much to talk about. There were only five sales (homes that closed escrow) in the month of February. That means only five sales were consummated in January. That’s down more than 50% over last year. While that may sound like a huge percent decrease, it’s important to remember in terms of actual units, it means eight fewer homes sold.Graphtrends

The median price decrease could make headlines though. It dropped from $900,000 a year ago to $750,000 for the same February period. Of course with only five sales these numbers are easily skewed. In fact, the median size home which sold in February 2007 was 1,680 square feet in size compared to this year’s five sales where the median size home was only 1,010. That’s more than enough to explain the difference in the median year-over-year price change. If one was to account for this differential at the going cost per square foot the adjusted median price would be $ 1,122,000 for 2008.

In February, the average home took over 40 days to sell and the seller received only 96% of their asking price.

In every category we measure—the time it takes to sell a home (DOM), the number of new listings vs. sales, the percentage the seller received of asking—the performance was markedly down over last year. Yes the real estate market has slowed and if we were to measure it as we do the economy, you could say it’s in a recession.

Bel_208_postcard