Santana Row - Capital of San Jose Real Estate

There is turmoil and traction in Santana Row. The apex of real estate new money and high tech start up playground makes for some interesting stories. There have been foreclosures, short sales and financial difficulties. There also have been winners buying those same foreclosures, short sales and difficulties. It is definitely a wonderful place to live (for some who like that sort of thing) and those who are bullish and solvent are betting long term on Santana Row.

Silicon Valley For Sale Homes Inventory Increasing

The inventory trend is definitely up. This is still a bifurcated valley with the west side doing much better than the rest. Time to make some offers...

Mortgage Interest Rates Up? Down? What?

The fed cut rates for the first time in 4 years!!!!!
By .5% too!!! And sooooo what? Are mortgage rates lower? That is the question most people want answered. The answer is sadly no. Short term rates get affected immediately, so the monthly and one year ARMs will eventually adjust down. The most popular 5, 7, 10 and 30 year loans will not come down. There is now fear of inflation due to the rate cut which means investors will not oversubcribe offerings of the longer term notes - which tips the see-saw toward higher interest rates. Frustrating, confusing, yes and yes. I do believe that the housing market has been beaten up and will rebound next year. This is definitely the time to consider going long in real estate - IE: buy.

Silver Creek Valley Country Club Real Estate

This is a very special place in Silicon Valley. Very well designed community of homes encircling a golf course - and quite a challenging golf course! A great club house, a wonderful community pool and tennis center, all make this pristine community a lovely place to live. All the homes are spacious, well-designed with light and volume. The social atmosphere of Silver Creek is also something special. There is one elementary school within the neighborhood that most kids attend. Residents in this neighborhood will definitely meet the neighbors. Not so normal in the rest of Silicon Valley. Homes range from spacious condos to 5,000+ square foot mansions. If you are interested in a wonderful home that we have coming on the market soon, drop me a line!

TIC units in San Jose?

Yes, the trend is more quickly seeping out of San Francisco. Tenant in Common divisions of duplexes, fourplexes and apartment buildings is becoming more accepted in the Peninsula and the South Bay. The impressive Andy Sirkin is speaking this Wednesday Sept. 19th to a Silicon Valley audience of buyers interested in dividing fourplexes to live in. With a little down payment and a good credit score, people can get into a unit for nearly $250,000 or less in pricey San Jose. There are limitations to this TIC arrangement, although they will wane as the market accepts it more. I'll be listening to Andy Sirkin tomorrow in San Mateo as he speaks on his specialty of writing legal documents governing the TICs

Foreclosures in Silicon Valley

The tide of foreclosures is rising in even the most solid of areas in Silicon Valley. I do believe though this is just a distribution of wealth from those with shaky financials to those who are ready to benefit from this weakness. There are very many people watching for short sales, foreclosure sales and bank REOs. The low rate of return in local investment properties also makes these low cash flow investments at least as attractive as their alternatives. There is also the ease of flipping a house that was well-acquired. The wealth of this valley will offset any difficulties that a small percentage of people are feeling.

Investment Shopping Center Santa Clara for sale

I just saw a listing in Santa Clara that is perfect for an owner-user. Multi-tenant retail in Santa Clara County is very had to come by. This is a nice deal on Keily and Homestead in a very good area of Santa Clara. Priced at $495 per foot, with 4,758 square feet on a 16,000 sqft lot - this is a nice deal. Rents are low. They do have very good verifiable upside. Interested?

1031 Exchange into NNN commercial property

It is possible to do a 1031 tax deferred exchange from an equity rich position like a rental house in the Bay Area to a cash flow vehicle which dramatically increases cash flow. My client last year traded his 5 rental houses into one NNN drug store and tripled his income. He also eliminated his tenants' annoying phone calls!

San Francisco TIC "condos"

Andy Sirkin is the premier attorney to consult when structuring a Tenant In Common (TIC) investment purchase in the San Francisco Bay Area. It is definitely attractive to purchase a home in San Francisco significantly less in price than the same size condo. What are the downsides? Will you ever be able to convert to a true condo? Who oversees the overall maintenance of the building? These are significant issues that need to be answered when buying a TIC. What are the advantages besides price? I will follow up with some more research into this very viable home option soon.

Bad Real Estate Market or What?

Please consider that there is always a bad real estate market AND a good real estate market at the same time. There is always an advantage position in every market. If there is low inventory and many buyers (seller's market) - then it's great to be a seller and not so great to be a buyer. In today's market - it's not so great to be a seller and very good to be a buyer. If you have the ability to play the side of the fence that is attractive at any give time, do so. I just sat down with a client yesterday who owned a fourplex in San Jose. We decided that it was not the time for him to sell. It was definitely a time for him to buy. Prices are down approximately 15% in that fourplex neighborhood in a year and rents are up maybe 10% in the same year. The trend for both those indices will remain the same for a while. Those who make strong, long-term purchase decisions this year amidst all the negativity will do very well in the medium to long run.

Divorce and Real Estate

There are many "life events" that affect how we manage our real estate assets. One event, that I have been personally educated in, is going through a divorce. Whether you own one family home which you may want to sell to go your separate ways or you have a portfolio of properties that must be divided - divorce requires planning for best results. Capital gains issues are very important. 1031 issues too play a big role if you have investment property. I humbly say that my ex and I did mediocre at best planning. This was due to antagonistic communication and general distrust. There is never win-lose - that really is lose-lose. Play the win-win game - no matter how tempting is revenge. Both parties can walk away happier and have more assets to start their "phase two". I plan to write more specifics about divorce and real estate issues in further blog entries.

Real Estate Investment Club - from Hell

BiggerPockets.com had a great article about real estate investment clubs too.
Please read. Yes, I know, the appetizers are tempting at these meetings...

I Love East Valley San Jose Real Estate

Zone 4 for you in the industry in Santa Clara County - or East Valley - but more specifically the are between Evergreen to the South and North Valley to the ________. If there has ever been a more obvious real estate play in recent history, this is it. Evergreen was nothing but green hills 20 years ago - now it is Silver Creek Valley Country Club and a slew of $1,000,000+ homes. North Valley & Milpitas was built out with track homes and yet, it was not THE place to be by any means. Now look at North Valley and especially Milpitas - prices have soared and demand is high. What area is in between and will get squeezed price-wise? Yes, I highly suggest buying in East Valley - the area will definitely regentrify over the next decade. Homes will get more expensive and retail will come back bigger and better. My strategy, buy single family homes and rent them out. Rents will rise too. This boring investment method make people rich - just ask all my clients who did this in the 70s and 80s.

Real Estate Investment Clubs

It was in front of my face and I didn't see it. Pat Kitano of Transparent Real Estate made it all so clear to me in his article about a certain real estate investment club. Please read and be enlightened - or at least be a bit more cautious.

Whew!!! Bank of America bails out Countrywide's possible bankruptcy

In a late move today, Bank of America invested over $2 billion into flailing Countrywide Mortgage. Countrywide has notes on 1 out of every 7 households in the US! They are definitely in rough waters with all the foreclosures. I am sure BofA felt that saving this sinking ship is good for the whole mortgage industry and good for BofA. It also got a sweet deal from Countrywide which had few sources left for a bailout. Stock is trading after hours at $25 - BofA now has rights to buy the stock at $18! More details from MarketWatch.

Trulia wins my heart

I received a Build-a-Bear today with a Trulia button on it. It also has a squeeze hand which when pressed says "You are trulia wonderful" - well that's probably incorrect, but it is close to what is says. The bear was quickly absconded by my daughter. So, I only heard the phrase once. The note christened my a centenarian - I guess I answered over 100 questions on Trulia Voices. Well Trulia, I am listening. If I get to 200 do I get a trip to Las Vegas, perhaps the Wynn Hotel or I'd settle for the Bellagio. $200 worth of gaming chips too. That would be very, very nice:-)

Silicon Valley Rental Rates Climbing

I keep seeing emails through our company intranet asking for rental houses. People are relocating into the valley and looking for high end rental homes. Actually, not high end, just decently located, good condition homes near the work areas of Menlo Park, Palo Alto, Mountain View, Los Altos and Sunnyvale. No issue paying $3,000 to $4,000 per month for a clean 3 and 2. It's not dot com by any means. It's just a strong valley.

Commercial Loan Rates

Ballpark rates from last week for portfolio lenders are given here; 25 year am, possible 30 on newer property, some due in 10, others due in 25 or 30. Some sources will go to 185 bps as margin. Some will underwrite newer properties to 1.15 DCR, otherwise 1.20. I would need property information to develop a no-prepay option, 30 due in 10, fixed for 5 then rolling to another fixed for the second 5 years; this option typically at 1.25 DCR, probably in the range 6.6 to 7.25%.



Program
Index
Index
Rate
Margin
Rates as of
8/14/2007

3 Year Fixed
3 Yr Treasury CMT
4.49%
2.00%
6.49%



5 Year Fixed
5 Yr Treasury CMT
4.57%
2.00%
6.57%



7 Year Fixed
7 Yr Treasury CMT
4.65%
2.00%
6.65%



10 Year Fixed
10 Yr Treasury CMT
4.78%
2.00%
6.78%



15 Year Fixed
10 Yr Treasury CMT
4.78%
2.00%
6.78%

From Dave Singleton of Investors Trust Mortgage Corporation

If you want excellent commercial-investment loan service, call Dave at 831-245-6603.

Bank Owned Properties - REOs - Foreclosures in the Bay Area

ALAMEDA COUNTY

ADDDRESS PRICE BR/BTH/SF

2061 CALHOUN ST., ALAMEDA 687900 3/2;2540
17480 CARDINAL COURT,CV $1,174,550 4/3.5;3255
20958 ELBRIDGE COURT, CV $954,900 4/3;2814
42763 JEFFERSON, FREMONT $524,500 4/1.5;1151
39495 ALBANY CMN UNIT G, FREMONT $339,900 2/1/890
23510 WRIGHT AVE, HAYWARD $536,750 3/1;1153
24982 COPA DEL ORO, #103, HAYWARD $389,900 2/2;958
27505 TAMPA, #31, HAYWARD $400,000 2/1;910
21239 GARY DRIVE, HAYWARD $377,625 2/2/1100
2144 BOCA RATON, HAYWARD $489,900 3/2;1128
755 DOUGLAS ST., HAYWARD $482,000 3/1;1034
1102 HOLMES WAY, HAYWARD $439,900 2/2;1797
24999 2ND STREET, HAYWARD $539,900 3/1;1097
1672 EAST AVENUE, HAYWARD $449,900 2/1;837
380 SMALLEY AVENUE, HAYWARD $490,000 3/2.5;1520
19029 WAVERLY AVENUE, HAYWARD $459,900 3/2;
27411 PORTSMOUTH AVENUE, HAYWARD $499,900 3/2;1128
21178 OCEAN VIEW, HAYWARD $459,900 3/2;1392
24959 KAY AVENUE, HAYWARD $584,900 3/2;1290
2436 CENTINNIAL LN., HAYWARD $749,900 3/2.5;2023
27480 CALAROGA AVENUE, HAYWARD $417,000 3/2;1119
24523 MARGARET DRIVE, HAYWARD (DUPLEX) $499,900
21961 ARBOR AVE, HAYWARD $459,900 2/1/775
1540 PORTOLA AVE., LIVERMORE $349,900 2/1.5;982
820-822 100TH AVENUE, OAKLAND $305,000 4/2;1240
5627 HILTON ST., OAKLAND $404,900 3/2;1512
2850 MACARTHUR BLVD., OAKLAND (TRIPLEX) $560,500 5/4;2335
3826 39TH AVENUE, OAKLAND $314,900 2/1;1214
4929 STACY, OAKLAND $599,950 3/2;1579
812 105TH AVENUE, OAKLAND $319,900 2/1;884
4940 STACY, OAKLAND $680,500 5/3;2200
9841 LAWLOR, OAKLAND $469,900 4/2;1320
6458 OUTLOOK AVE.,OAKLAND $433,125 3/2;1325
840 51ST ST., OAKLAND $459,900 2/1;936
4053 EDWARDS AVE, OAKLAND $454,900 2/1/1119
2610 HIGHLAND AVE, OAKLAND $439,900 3/2/1203
2332 CHURCH ST, OAKLAND $414,900 2/1/1014
2046 81ST STREET, OAKLAND $411,300 DUPLEX
6833 MACARTHUR, OAKLAND $354,000 2/1/1027
5509 LAVERNE, OAKLAND $339,900 2/1;1023
3319 72ND AVENUE, OAKLAND $379,900 4/1/1426
14960 WESTERN, SAN LEANDRO $462,000 3/2;1346
14675 AURELIA, SAN LEANDRO $529,900 3/2;1437
1060 DILLO STREET, SAN LEANDRO $469,000 2/1;1022
15673 ANCHORAGE, SAN LEANDRO $719,900 4/2.5;2013
17041 VIA ALAMITOS, SAN LORENZO $459,900 3/1;1051
642 HACIENDA, SAN LORENZO $479,900 3/1;1068
34187 SOTO DRIVE, UNION CITY $769,900 3/2.5;2000
2274 PEACOCK PL., #2, UNION CITY $319,900 2/1;903

CONTRA COSTA COUNTY

ADDDRESS PRICE BR/BTH/SF

2051 DANVILLE BLVD., ALAMO 1,389,999 3/2;2823
500 W.10TH ST., ANTIOCH 424,900 2/2:1945
1325 AUGUST WAY, ANTIOCH $369,900 3/1;1230
1741 SAN JOSE DRIVE, ANTIOCH $399,000 4/3;1618
2052 TUPELO WAY, ANTIOCH $614,000 4/2.5;2591
5137 WINTERGLENN, ANTIOCH $460,900 4/3;1787
234 SAN JOAQUIN AVE. ANTIOCH $264,900 2/1;848
141 RAINER LANE, ANTIOCH $299,900 4/1.5;1342
40 E. MADILL, ANTIOCH $339,900 3/1;1082
1612 MARIE AVENUE, ANTIOCH $317,000 2/1;1008
2312 CRYSTAL CT, ANTIOCH $558,550 6/3/2653
413 AZORES CIRCLE, BAY POINT $469,900 3/2/1279
38 CANAL DR, BAY POINT $339,900 3/1/1180
42 HARBOR, BAY POINT $379,900 3/2/981
159 TAMMY CIRCLE, BAY POINT $245,500 2/1/842
1445 EMPRESS LN., BRENTWOOD $599,900 5/3;2996
971 COUNTRY GLENN LN., BRENTWOOD $424,900 3/2;1502
1238 COMICE PKWY, BRENTWOOD $664,500 6/4;3546
2281 KEYSTONE WAY, BRENTWOOD $614,900
2870 HILLTOP, CONCORD $364,900 3/1;1028
2141 NORTHWOOD, CONCORD $299,500 2/1.5;1000
994 OAKGROVE RD., CONCORD $409,000 3/1;1262
1381 SAN JOSE AVE., CONCORD $438,000 3/2;1208
2167 HURON DR., CONCORD $469,900 4/2;1136
1311 ORANGE ST., CONCORD $449,900 3/1;1196
3706 LOS FLORE, CONCORD $419,900 2/1;878
3665 EDMONTON DRIVE, CONCORD $394,900 4/2;1244
5259 LONDONDERRY DRIVE, DUBLIN $819,900
7708 SAN SABANA CT., DUBLIN $614,900 1774
4575 MANGROVE #26, DUBLIN $459,800 2/2;1201
7096 ELBA WAY, DUBLIN $592,500 4/2;1708
4281 CLARINBRIDGE DRIVE, DUBLIN $599,900 2/2.5;1428
787 BALRA DRIVE, EL CERRITO $637,900 3/1;1052
3731 RUSKIN PLACE, FREMONT $609,900
601 DEVONWOOD PKWY, HERCULES $379,000 2/2;1281
235 EMERALD WAY, HERCULES $744,900 5/3/2615
1175 WILLIAMS, HERCULES $612,500 5/3/2188
30 SODARO DR., MARTINEZ $403,500 4/2;1479
1850 GATEWAY DR., OAKLEY $449,900 3/2;1661
284 HAVENWOOD CIR., PITTSBURG $524,900 4/2;1775
1605 NORTON, PITTSBURG $319,900 4/2;1332
30 MEADOWBROOK, PITTSBURG $260,900 2/1/1122
229 W.10TH, PITTSBURG $369,900 3/1;2217
3815 SHASTA CIR., PITTSBURG $304,900 3/1;1434
134 PEPPERMILL, PITTSBURG $289,900 2/2/1082
464 2ND, RICHMOND $351,900 4/2;1569
3117 STONE CLIFF CT, RICHMOND $499,000 3/2;1448
864 10TH ST, RICHMOND $264,300 2/1/846
1159 VIEW POINT, RODEO $509,000 3/2.5;1673
1747 CALIFORNIA, SAN PABLO $299,900 2/1;748
2 MARIA VEGA, SAN PABLO $505,000 4/2;2063
2131 ROAD 20, SAN PABLO $439,900 2/2;1317 1/1;500
1730 PINE AVE., SAN PABLO $314,000 2/1;1058
2600 GIANT #48, SAN PABLO $299,900 2/2/1121

SAN MATEO COUNTY

ADDDRESS PRICE BR/BTH/SF

368 IMPERIAL #247, DALY CITY STUDIO 259000 1;468
930 MISSION, #38, SO. SF $515,900 2/2;1060
536 5TH AVENUE, REDWOOD CITY 599900 2/1;730
162 CORONADO AVENUE, SAN CARLOS $889,900 3/2;1990

SANTA CLARA COUNTY

ADDDRESS PRICE BR/BTH/SF

1351 3RD ST, GILROY $710,000 3/2/2036
311 S. 22ND STREET, SAN JOSE $446,500 2/1.5;684
5468 TYHURST WALWAY, #3, SAN JOSE $345,000 2/1;903
101 RANCHO DRIVE, SAN JOSE $344,900 2/1;822
1390 SADDLE RACK, #314, SAN JOSE $493,400 2/2;1258
3025 THREE SPRINGS, SAN JOSE $1,476,900 5/3.5;4553
40 SILCREEK DRIVE, SAN JOSE $459,900 2/2;1313
870 DELAVION WAY, SAN JOSE $700,000 3/2.5;1705
4081 PARTRIDGE DRIVE, SAN JOSE $720,000 3/2;1447
5578 SPINNAKER DRIVE UNIT 1, SAN JOSE $319,900 2/1;810
813 N CAPITOL AVENUE UNIT 1, SAN JOSE $339,900 2/1;810
3626 SPRINKGROOK AVENUE, SAN JOSE $799,900 4/2.5;2124
1940 TRADAN DRIVE, SAN JOSE $379,000 2/2;988
1798 PARKDALE WAY, SAN JOSE $593,000 4/2;1353
4970 GAZANIA DRIVE, SAN JOSE $594,900 3/2;1384
1815 OCALA AVENUE, SAN JOSE $559,900 3/2.5;1410
3266 LANTERN WAY, SAN JOSE $609,900 3/2;1152
53 MILLAR AVE, SAN JOSE $559,900 2/1;1000

SOLANO COUNTY

ADDDRESS PRICE BR/BTH/SF

1306 COOLIDGE, FAIRFIELD $359,900 3/2/1261
1519 HENRY STREE, FAIRFIELD $345,000 3/1;1014
1219 EISENHOWER, FAIRFIELD $309,900 3/2;1097
1941 GRANDE CIR #63, FAIRFIELD $204,500 2/2.5/1080
1624 MARLESTA, PINOLE $439,900 3/1.5;1050
532 SOMMERVILLE, VACAVILLE $349,900 4/2.5;1680
1935 GRIFFIN DR, VALLEJO $422,900 3/2/1793
141 SUNCLIFF PL, VALLEJO $515,500 3/3/1652
3415 EDGEWATER, VALLEJO $689,550 5/3/2565

SAN JOAQUIN COUNTY

ADDDRESS PRICE BR/BTH/SF

767 SAGEWOOD LANE, TRACY $509,900 4/3;2536

Cap Rates Need to Adjust for NNN real estate investments

If interest rates rise due to the higher risk associated with commercial lending, then cap rates need to rise appropriately. This adjustment is not evident in the market yet. Commercial sellers are like gas station owners, eager to raise prices on the rumor of a shortage in gas, and reluctant to lower prices when the cost of oil drops. Eventually there will be a slowdown of sales activity and an increase in commercial inventory. This will prompt realistic, motivated sellers to reduce their prices and raise cap rates. If we all could cooperate sooner, that would be best for everyone.