Living in one of the best, most stable communities helped us maintain high home prices which appreciated immensely during the last 30 years. We did have some dips during that time but generally our homes appreciated about 5 times over, (milk, bread, fruit and vegetables hardly doubled in price). Very few homes get sold here. People prefer to stay put.
The easy access to shops, I-280 and I-85, the proximity to Cupertino, Los Altos or Palo Alto schools makes it ideal neighborhoods to live in. South Sunnyvale, Cupertino, Los Altos, Palo Alto and the good parts of Mountain View maintained high prices. A 3-bedroom ranch-style house in the South Sunnyvale, priced at $950K was reduced in price after a week to $908K and attracted 4 offers to raise the price to above $910k. Generally, in these desired areas the prices are about 20% lower than the peak time on March 2008. Back then, a 3 bedroom ranch style home was priced at $975K and after reviewing 11 offers sold for $1.109M. Invested funds lost many times more than 20%.
The banks’ new guidelines are very strict - they demand higher down payments and better credit. The new limit for Conforming loan starting January 2009 is $625,500. Buyers will have to pay a higher down payment or get a second loan. The underwriters who decide if you can get a loan and on what terms, expect a fully documented file. Stated income (in which you would state that you earn a certain amount without proving it) is gone. Many foreign families from overseas go back home to their native land. Most of them lived in rental homes so it didn’t affect the prices much. The banks are getting more organized and more in control of the situation but a new wave of layoffs is arriving and we all hope that the employment market stabilizes.

In California the Real Estate Broker is responsible for pre qualifying the buyers, finding a suitable house/property that will fit the needs and budget of the buyer, negotiate the best price and terms, write the contract which is the purchase agreement, coordinate with the lender to get the best loan, inspect and check the property with professional inspectors, follow up and make sure all needed work be completed as per the contract, pay attention to every detail and educate the buyers through the process, walk through the check the property before releasing the down payment funds, check the closing statement and follow up with the home warranty and advice for many years to come. For Sellers, the Broker has to help decide on a marketable price, help prepare the house like a bride for her wedding day, do all property inspections, help the seller fill up all the disclosures, market the house and advertise in all possible ways, hold open house every weekend until the house sells, show it whenever needed, help maintain the house clean and tidy, choose the best suitable buyer, negotiate the best price and terms, check the lender and follow-up with every step of the sale process, and the contract and help deliver the house clean and ready to the next owners.

There are many other roles a broker has that are not written, like staging, moving furniture around, decorate with fresh flower arrangements, and be a real friend.

With the new situation of the mortgage companies and banks that are going under, like Indibank this week and who knows who is next on the list, there is a feeling of uncertainty. Buyers are afraid to remove loan contingency because their lender might change terms at the last moment or even go under, leaving the buyers with no loan, risking their deposit check of 3% of the sale price, which is a considerable amount of money in our area. Until about 1985 the contract enabled the buyer to have loan contingency up to the final approval of the loan or the funding day. It is still the case in other states like Texas and Louisiana but not in the bay area. Here, the seller gets mad and asks the buyer what rights he has to expect the seller to hold his property off the market while he waits for his loan to get approved without jeopardizing his deposit check. Maybe it’s time to change this condition and give the anxious buyer some peace of mind.

The Real estate market is more balanced these days. There are more negotiations and less bidding wars. Some extraordinary homes still sell with multiple bids but most homes are being sold after a few weeks on the market and tight negotiations. Sellers still insist on their prices and buyers are more cautious. Many buyers wait to see what will happen with the banking industry, but others still buy homes especially in the preferred areas with the good schools.

The inventory keeps growing as well as the number of transactions. Many short sales, Foreclosures and REO (homes that were foreclosed, were not purchased by an auction on the Court house stairs and remained in the banks’ possession) are being sold, some of them with multiple offers. Even the foreclosures in Stockton are being sold out.

There are still many people who can afford to purchase homes. Los Altos and Mountain View and Sunnyvale are getting more balanced, with less multiple offers and more negotiations and concessions toward the buyers. Palo Alto, Cupertino and Saratoga are still holding tight. When I see a nicely remodeled house in a beautiful street and good schools I know it will attract many buyers and sell for more than asking price but the rest of the homes are being sold with negotiations, more contingency times and demands from buyers to fix things. This is the sign of a balance market where supply and demands are the main drivers. I did manage to get a “deal” for one of my clients in Mountain View. A similar house, in the same street, is priced for sale at $175,000 more. When you see a for sale sign standing for a long time it’s because the house is on a busy street or it was priced too high. Pricing right is very important especially in a down turn market. If you price it too high you end up chasing the market down by having to lower the price. The house becomes “stale” as we say in the real estate jargon. This is the time for bargain hunters.

Sunnyvale CA is one of the largest Cities in the Silicon Valley, next to San Jose, Cupertino, Santa Clara, Mountain View and Los Altos. About 140,000 people enjoy the stability, the clean air, clean environment, abundance of parks and recreation facilities, beautiful community center and senior citizen center, great schools and fantastic Police & Fire department who shows up in less than 5 minutes when called.

The elementary schools in Sunnyvale attend 3 school districts according to geographic boundaries. Sunnyvale has 4 elementary schools that belong to the Cupertino School District

You can click on the link and view the location. Montclaire, West valley, Stocklmeir and Nimitz

Cupertino Union School District elementary Attendance Boundaries

The kids from the Northern neighborhoods, North of Fremont Ave attend Sunnyvale School District

Some of the schools are as good almost as prestigious as Cupertino schools. Cherry Chase Elementary

and Cumberland Elementary

are very desirable. Columbia middle school is known for the high math achievers. A high percentage of kids who attend Columbia middle finish Algebra before they get to high school. The school received grant from Juniper, a high tech company nearby.

The kids on the East side neighborhoods of Sunnyvale, East of Wolfe Road attend Santa Clara School District in Sunnyvale. Laurelwood Elementary is one of the best elementary schools in that area. The day care before and after school hours enables working parents to leave their kids at school after hours or early in the morning , knowing that they are in good hands.

In a meeting with Larry Stone the Santa Clara County assessor he explained that home prices are determined by the designated school for that property. There could be a considerable price difference between homes in the same street or adjacent street, just because they belong to a different school. The Real estate market is affected directly by the schools. While most of the country is affected by the mortgage market and prices are going down, Sunnyvale is holding tight. The prices are solid. Until now you can still see multiple offers and high home prices.

The U.S. House of Representatives approved last week the legislation to raise the conforming loan limits to as high as $729,750 in high-cost areas. Research shows that it would enable an additional 138,000 Americans to purchase homes, and 200,000 families to refinance their homes safely and affordably.

Raising the conforming loan limit will provide immediate relief to borrowers and ease downward pressure on current housing markets. This could result in more than 300,000 additional home sales and strengthen current home prices by 2-3%.

The national sub prime meltdown has had a dramatic impact on both the cost and availability of mortgages in many markets. Since August 2007, the interest rates for jumbo borrowers have been more than 1 percentage point higher than conforming loans, which can cost homeowners up to $400 month in higher interest payments.

The President is expected to sign the legislation by the February 15^th. The increase in the conforming loan limits will last through 2008