Shave and a Haircut, Two Bits! The Piedmont Perspective, Vol 72, October 21, 2008
If you read last week’s column (and let’s assume for the sake of my ego that you did) I talked about the fact that the Piedmont Market has fallen very little in value, relative to other years. This isn’t to say prices haven’t softened (they have) but not as much as the mainstream media would have you believe. Let me repeat last week’s message: third quarter values in Piedmont sales were off by only 1.059%!
So why hasn’t my neighbor’s beautiful home sold yet?
The difference in today’s market is the lack of credit in the marketplace (the lender’s ability to make loans) and the scarcity of options for jumbo loans (those loans over the superconforming rate of $729,000*). Sales requiring a loan larger than $729,000 are going to find it much tougher to fund than sales at the lower end of the scale.
While jumbo loans are still available (hunting them down may prove worthwhile) they take longer to process, require more money down, have stricter guidelines, and are currently short-term products only.
This is where seller financing comes into play. If you are in the position to carry-back some part, or better yet, ALL of the loan to the buyer, you have just increased your buyer pool dramatically!
Why? Because you’ve just made it possible for the well-qualified buyer to secure your home absent the traditional lender! Congratulations, you are now the bank and your home becomes the collateral for the loan. (This isn’t a new concept, it’s a reemerging one!)
That’s interesting but I don’t need a loan; I have CASH to spend! Fantastic - you should be well-rewarded in the current marketplace. This is the time to take advantage of those homes at the high-end of the market as they will have far less competition at the table and will likely sell for less than they would have a few short years ago.
I also have a house to sell? Can I come out whole on my end and capture a discount on the other?
That depends. How long have you owned the home? If it is less than five years, the straight answer is - not likely.
Remember that markets are relative. When asking for a haircut on one end, you should expect the buyer of your house to demand a similar shave on your end as well. However, the substantial savings on the UP leg and its increased appreciation capacity over the long term, should make up for any loss experienced on the selling end now.
Buying UP in a down market may be the best time to realize your biggest gain - especially if you have owned your current home for several years.
*Please note that the superconforming rate is scheduled to be reset to $625,000 come January 1, 2009. IF you have a Refi on your loan coming due in 2009, you may want to take advantage of lower interest rates and the higher conforming limit NOW. You’ll need to do this no later than December 1, 2008 in order to get the loan processed in time! Please speak to your banker or an experienced mortgage broker: www.lasallefinance.com
What’s Coming?
With 25 Piedmont listings currently available, and many more fantastic buys in surrounding neighborhoods, there is currently great range from which to choose:
Linda McLain brings 224 Ricardo Avenue to the market a week from Sunday. This 1906 Craftsman Brown Shingle is just a few doors away from Dracena Park and features quintessential detailing, including box beam ceiling, wainscotting, inlaid hardwood floors and double pocket doors to the formal living and dining rooms. Greet your neighbors from the charming and welcoming front “sitting porch.” With 4bdrms/2bths, cozy sunroom and remodeled kitchen with breakfast room leading to a private back garden, this wonderful home also boasts a lovely hills view and a peek of the bay! Price: $1,275,000. Open Thursday, Oct. 30, 9:00-12:00 and Sunday, Nov. 2, 2-4:30.
Scott Hill’s newest listing at 70 Somerset Road doesn’t just offer a luxurious and spacious floor plan, it offers a luxurious lifestyle to go along with three finished floors of ultragrand living! with 5bdrms/4++bths, stunning bay views, family room, billiard room, exercise room, and built-in pool, I’m hard pressed to figure out what it doesn’t have! If space and elegance are what you crave, don’t miss this refined mid-century beauty! Price: $1,995,000. Open Sunday 2-4:30 www.70somerset.com
Anian Tunney bring 92 Oakmont Avenue to the market. This charming home on a great neighborhood street is close to Wildwood Elementary and Piedmont High School’s playing fields. It features 3bdrms/2bths and bonus downstairs rumpus and plus rooms. Featuring a beautiful vaulted ceiling in the living room, lovely hardwood floors and good separation of space, this affordable home merits your consideration! Price: $1,185,000. Open Sunday 2-4:30. Shown by appointment only! www.grubbco.com
While you are in the neighborhood, don’t forget to pop into Tricia Swift’s listing at 102 Oakmont Avenue - the best little value in town! This nifty, pretty “starter” home is (surprisingly) still available and makes a great “jumping off point” or in-town investment for an aging parent, a returning college graduate, a single/divorced parent or a smart rental unit.
Price: $695,000. www.grubbco.com
Bebe McRae has several new listings worth mentioning, beginning with the 4bdrm/3bth home at 55 Gypsy Lane in the Claremont Hills, offering sophisticated indoor-outdoor access and maximum privacy. This mid-century modern situated on more than 1/2 acre of wooded land offers spectacular Bay & San Francisco views and has had extensive seismic retrofitting & upgrading! Close to the Claremont Hotel, shops, parks and convenient public transportation. Price:$1,850,000. www.grubbco.com
161 Vicente is a newly constructed Contemporary in the Claremont Hills. This brand new home features Bay views, open floor plan, level lawn, 3-car garage with interior access and sleek design! With 5bdrms/4bths and au-pair suite and family room down, this home has room to spare. Price: $1,900,000. www.grubbco.com
And in a nod to deja vu, Bebe brings 6590 Swainland in Montclair back to the market. Having sold it in September, the new owner has had a change of plans and will not be moving in. This spectacular 5bdrm/4.5bth view home is now available once again! Price: $2,300,000. www.grubbco.com
Please let me know if you would like to see any of the homes listed above or any others.
What’s Pending?
Yes, homes are still going pending, as witnessed by the strong response to 2 Littlewood Drive this week and the surprisingly quick sale of the estate on Tyson Circle, listed for $7,000,000! However, keeping these sales in escrow and closing the deal has become more challenging as underwriters try to avoid their previous mistakes. (This is the pendulum swinging too far the other way.) EXPECT to jump through hoops before and after the sales contract is ratified and don’t be surprised if your closing date gets delayed as well. (Less than half of the deals currently in escrow are closing on time and many of them now require a standard 45-60 day window!) A late close isn’t your realtor’s fault, the seller’s fault, the buyer’s fault or the escrow officer’s fault. In fact, it isn’t about finding fault at all. More and more, a late close is becoming the norm . . .
Late closings are an indicator that the mortgage industry is experiencing a whole new day! Lenders have laid down much stricter qualifying guidelines and some of their requests (in my opinion) seem to border on the ridiculous. I was recently required to write a letter stating that my buyers were NOT interested in the washer/dryer even though the sales contract had clearly “excluded” these items. Huh? (This kind of duplication just doesn’t make sense to me.) There’s no getting around it, except to satisfy any and all lender demands. This is where, as professionals we set aside our annoyance and expertly guide you through the process!
As for you - the more prepared you are - the better! The more flexible you become - the better! The more responsive you can be to last minute requests - the better! The calmer you remain - the better. . . (Do you see an emerging pattern? Good! Patience rules the day.)
In today’s market, working with an experienced REALTOR, an established real estate broker and a knowledgeable mortgage broker is going to be more important than ever! With more than 42 years of prominent local expertise, this is where The GRUBB Co’s market dominance really pays dividends!
Now let’s stop pointing fingers and start packing! The good news is you have a willing and able buyer!
What’s Happening?
Last week I spoke about some of my favorite homes that are still available in Piedmont, but left one very special residence off of my list: if you haven’t yet seen the stunning Tudor Traditional at 9 Wyngaard Avenue in Piedmont, you are missing out. Last Christmas, the owners hosted the Annual Neighbors and Newcomer’s Holiday Party and the house truly sparkled. I LOVE this elegant home that features 3bdrms/2.5bths, gourmet kitchen with adjoining family room and stunning living and dining rooms - all perfect for formal or informal gatherings alike.
Price: $1,875,000. www.grubbco.com
What’s Fun!
Halloween is just around the corner and what better spot to seek out your cosutme than Dress Best for Less? Cliff and I will be dressing up this year so I will be spending time rummaging through the racks for costumes. Assuming Sarah Palin will be well represented, I am in search of good and easy ideas. Who’s got one they are willing to share?
Dress Best for Less is located at 3861 Piedmont Avenue in Oakland. Call (510) 658-8528 for hours of operation.
The Piedmont Plug!
Did you know that Habitat for Humanity East Bay has opened a store? No? Well now you do! (Don’t worry Dress Best for Less - it isn’t clothing and accessories. ) I am talking about lighting, appliances, tile, etc. What a timely concept. Habitat for Humanity East Bay operates the ReStore where donated home improvement items can be purchased for 50-75% off retail!
As an example: the ReStore has just received a truckload of brand new traditional and modern lighting fixtures, donated by the largest residential lighting showroom in San Francisco!
Here’s the best part: 91 cents of every $1.00 raised goes towards building homes for Habitat for Humanity!
My good friends, Andrea and Claude, donated almost the entire contents of their home in Palo Alto to Habitat for Humanity before beginning an extensive remodel last year and I believe they were rewarded with a sizable tax-donation in the process! That’s a win/win for everyone!
Please join Habit for Humanity in their campaign to build the next 200 homes in just five years. the ReStore is located at 9235 San Leandro Street, Oakland, CA (510) 777-9706.
To learn more, please contact Linda Schmodlt of Habitat for Humanity East Bay at 510-777-9706.
See you next week!
THANKS FOR READING!
For more information about any of the properties or events listed above, please call me at (510) 339-0400 x264, or simply respond to this email. I’d love to share my real estate tips and my experience in the Piedmont community with you!
Feel free to visit my website at JulieGardner.com for more information as well
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