It feels somewhat against intuition. Is it real?!?

Hi, yes this was an article in the Mercury News. Many homes in the Stockton area, the Sacramento area, and San Jose area are being sold as Foreclosures and REO (Real Estate Owned by the bank that was not sold to the public in foreclosure). They are priced low; therefore many investors and opportunists are jumping on these properties with anticipation for appreciation. There is still abundance of wealth in California. My friend represented a buyer in San Jose last week for an REO sale and there were 20 bids on that property. The banks do not want to get stuck with so many homes, they are listing them cheap and selling them to the highest bidder. The article was talking about a rise in the volume of sales; however the prices are lower, if you compare them to last year. It’s good that there is activity. BTW REO is not easy to buy; you need an experienced agent for that. There are strict rules and regulations and penalties if the buyer does not close on time. The Banks are getting softer again; you can see loan products that you have not seen for the last 2 years with 3% & 5% down payment and even ‘stated income’ (meaning you state that your income is a certain amount and you do not have to prove it). Still for the best loan and terms you need to supply paystubs, bank statements, good credit history, and verification of employment, proof of insurance on the property and proof of sufficient funds to pay your mortgage.

If you read my personal reports you would see that the prices in the desired areas, namely, Los Altos, Palo Alto, Mountain View, Sunnyvale and Cupertino with the good schools didn’t go down. Some homes are priced too high and have to adjust their expectations but if they are priced right they’ll still get sold with a few offers and great terms.

I listed on Wednesday a small house in Sunnyvale, Cupertino school district, with Stocklmeir elementary. We already had 50 agents and many interested buyers check the house. We are planning to hold it open this weekend on Saturday and Sunday and take offers on Tuesday.

You are invited to see it. It’s very clean and upgraded 3 bedrooms 2.5 bathrooms, situated closed to Sunnyvale Community center on 1225 Manet Drive.

Finally, a glimmer of good news for Silicon Valley home sellers: Home sales were up 30 percent last month compared with March.

Good news for Silicon Valley home sellers: Home sales were up 30 percent last month compared with March.

That was the steepest March-to-April increase in almost two decades for the county.

A total of 1,440 homes changed hands in Santa Clara County in April, up from 1,105 in March.

Investors appear to be returning to the market, as non-owner occupied buying is increasing.

to see the whole article, Please click here: Sue McAllister at smcallister@mercurynews.com

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.

We are back in full action. Inventory is growing as fast as expected in the spring. The “for Sale” signs are springing up like mushrooms after the rain. If you drive through the neighborhood during the afternoon time you’ll see ‘open house’ signs pointing in all directions. Homes are being sold fairly fast, especially in desirable areas with good schools.  Some homes in the most attractive areas in Sunnyvale, close to Helena and Wright Ave, were sold under or at the asking price. The agents told me that they were very surprised. Other homes, near Ortega Park in Sunnyvale, were sold with multiple offers way above (18%) asking price. All these homes in both areas needed a lot of work (what we call TLC “tender love and care”).

People always ask me “how much do you think this house will sell for?” or “how much this property is worth?” I run the comps (homes that were sold lately in that neighborhood) and even though I really know all these homes, it’s hard to predict. Who knows how desperate the other bidders are, how many homes they lost out on by trying to offer just enough to get the house and not too much. Who knows what other motivations the buyers have. Some are being vacated from their rentals and are sick of moving, some want to invest their savings in real estate instead of a rocky stock market.  Sometimes we have the chance to raise our bid and win the house but the buyers are not ready to pay so much more than the asking price. Buying a house is not just mathematics. Feelings and emotions play a crucial part in the decision to buy and pay the outrageous sum of money for a hut in the Silicon Valley.

Take your typical 3 bedroom 2 bath ranch, in its original condition, clean it nicely and poof, like magic, you turn it into millions of dollars. It was purchased for $28,000 45 years ago. Back then it was expensive. The neighborhood was very quiet and modest, there were cherry and apricot orchards around, in the heart of the Silicon valley. Now the magic word is Cupertino schools. This is the melting pot of the world. Immigrant from India, China, Japan, France, Germany, Finland, Israel, Iran, and many other countries, come to live the American dream. They want to get education, freedom and money. They are willing to pay $140,000 above the asking price for this 1600 s.f. house that has $30,000 termite and foundation damages. Additional $50,000 might be enough for basic remodeling. Yes, you need at least $1,1M to own a modest house in Sunnyvale, Cupertino School District. Last week a nice ranch house was sold with 18 offers and this week a similar house got sold with only 7 offers but the end price was higher. How high can it go?

Can you imagine? In the midst of a market downturn, 15 prospective eligible buyers compete for one home (Carniel). Another home (Richelieu Ct.) was sold for almost $200k more than asking price (with 14 offers) last week. It happened last week in Saratoga. About 6 homes that were priced under $2m were sold for more than 10% over the asking price. Some of them got sold just before the end of the year and some are still in contracts. The rain did not scare buyers away. The same thing is happening in Cupertino, where 12 families competed on one home, and in South Sunnyvale, the Homestead High area, low-end homes in Los Altos (under $2M) and in Palo Alto.Inventory is growing slowly but so is activity.These examples are not valid for every market and definitely not for the entire Silicon Valley. Even in the most attractive market there are homes that are not selling. If they are priced too high, over the market value, they will take a long time to sell and the sellers will end up getting a much lower price when they finally sell. A few examples are a house near Montclaire Elementary School in Los Altos (a highly desirable area) which has been on the market for more than 52 days, and a small house with a huge lot near Nimitz Elementary School in Sunnyvale.Smart buyers are not afraid of looking again at the same homes and offering lower prices. Now is a good chance to get A good deal