Some balance returning to Palo Alto real estate market!

The Palo Alto real estate market has been very hot for several months. But within the past month, it has cooled somewhat.

The median market action index peaked at 47 in early May 2012.

Anything above 30 is considered a sellers’ market.

The median market action index moved below 30 for a short period of time and is now at 34 – a sellers’ market still but not totally out of balance.

Some good news for buyers looking to buy in Palo Alto – market is still strong but buyers have a slightly better chance now to get their offers accepted than they did the past 2 or 3 months.

Menlo Park real estate market is cooling slightly!

After several really hot months, some balance is returning to the Menlo Park real estate market.

Below you will find a one year history on the median market action index for Menlo Park.

30 is considered a balanced market.

Above 30 is considered a sellers’ market.

From the middle of March thru the middle of May, the market action index peaked between 44 and 48 – indicating a strong sellers’ market.

Early in June, the market action index returned to about 30 – a balanced market.

This may be good news for buyers. The market is still competitive but not outrageously so.

 

 

 

Tranquil Retreat – 2/3 acres Emerald Lakes – 2/2 – $699,000

I have just listed a very “unique” property in Emerald Lakes.

Located at the end of Park Rd – a cul-de-sac, the parcel is a sloping 2/3 acres and has excellent bay views from large redwood deck and interior rooms.

Main level: 1 bedroom 1 bath kitchen dining room living room and “den”.

Lower level: Outside entrance only to another bedroom and bath.

Happy to answer any questions about property.

Or just come by and take a look:

Tour: Tuesday June 12, 2012 morning

Open House: Saturday and Sunday June 16 and 17, 2012. 100PM to 400PM.

We're sorry, but we couldn't find MLS # 81221903 in our database. This property may be a new listing or possibly taken off the market. Please check back again.

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Bay Area investors check this out!

Jeff Brown shows the way on real estate investing for retirement income.

I worked with Jeff on my investment purchases in Austin Texas area.

If you have good equity but low or no cash flow on your Bay Area rentals, let me show you how to increase your cash flow greatly with newer low maintenance properties.

Here is a good example of how $500,000 can turbocharge your income.

Turbo charge your retirement

I have been to Austin three times in past 6 months, contact me for more information on these investments.

Affordable new listing in Foster City – Open Saturday 230PM to 430PM and Sunday 130PM to 430PM

I am pleased to present a fabulous new listing.

Spacious 3 bedroom 2 bath plus family home – updated kitchen and baths – priced affordably at $899,000.

Come on by this weekend and take a look!

 

We're sorry, but we couldn't find MLS # 81219535 in our database. This property may be a new listing or possibly taken off the market. Please check back again.

REO market tightens for fix and flip investors

Over the past several years, a significant percentage of my business has been working with investors who buy, fix, and flip REO properties primarily in East Palo Alto and Menlo Park.

Over this time, this market has become much more competitive – “good deals” are much harder to find. Profit margins have sunk. Attractive investment opportunities can still be found but it takes a little longer.

Bigger Pockets reports on the increasing competition for REO investments on a national level.

Read more

Search for REO foreclosure properties

Please contact me if you want to learn more about REO opportunities on the SF Peninsula.

Menlo Park small income properties

Let’s take a look at a typical small residential income property in Menlo Park.

We're sorry, but we couldn't find MLS # 81210267 in our database. This property may be a new listing or possibly taken off the market. Please check back again.

This property consists of four 1 bedroom 1 bath units priced at $1,325,000.

Current rent for all four units is $4,650 per month or $55,800 per year. This property is priced at $1,325,000/$55,800 for a gross rent multiplier (GRM) of 23.75 – asking price is 23.75 times current annual rental income.

Market rents for all four units is estimated at $,6100 per month or $73,200 per year. This results in a GRM of 18.1 ($1,325,000/$73,200).

Property operating expenses – property taxes, insurance, utilities, gardener, management, and repairs, etc.  (loan costs are not property operating expenses) are estimated to be $31,250 per year – (42.7% of gross scheduled rents). This is a pretty typical operating expense ratio – should generally be at least 35% to 40% of gross scheduled rental income.

Gross scheduled income ($73,200) less operating expenses ($31,250) less vacancy and credit loss ($3,000) results in a net operating income of approx. $38,950 per year.

This is what will be left over to pay debt service or loan payments.

Investor loans for residential rental properties are currently available to approx. 5%.

$38,950 per year or $3,245 per month will pay loan payments on a $605,000 loan which means a purchaser would need $700,000 cash down payment to reach a break-even point.

This property is located in a very nice area of Menlo Park near the Civic Center and Burgess Park – one can easily walk to either downtown Palo Alto or Menlo Park.

An investor would need to forecast an increase in rents and property values over the next 1o to 15 years for this investment to make sense.

 

Menlo Park real estate market update

The Menlo Park real estate market has become extremely active since the first of the year.

The median market action has moved from approx. 19 in Nov 2011 (strong buyer’s market) to approx 28 in March 2012 (balanced market).

Here is the median market action index broken into price ranges.

Interesting to note, it is the highest price range in Menlo Park where the greatest increase in market action index is.

The median price in the highest Menlo Park quartile is $2,180,000.

Homes in this price range of Menlo Park are generally located west of El Camino in the following neighborhoods:

Downtown/Allied Arts

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West Menlo

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University Heights – County area along Alameda

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Inventory is tight, multiple offers common in Menlo Park

My office put a listing on in the Suburban Park neighborhood of Menlo Park on February 6th.

14 Greenwood Place was listed at $1,249,000.

It is an 1890sf nicely updated home with 4 bedrooms and 2 baths.

8 offers were submitted on Valentine’s Day and there was one very happy buyer at the end of the day!

Property sold significantly over list price.

To search for historical sales data or current listings (there will not be many! :-) ) in Flood Park and Surburban Park, click here.

 

 

 

What the real estate business is all about for me…..

Last week, I received a call from an old client who purchased her home from me way back in 1984.

She still lives in that same house 27 years later……..

This is a woman who has worked 2 jobs most of her life…….nursing and in home care – hard work – tougher than I could do…..

On the phone, she told me she has lots of things on her mind that trouble her – partially real estate related but more family related and that she would like to sit down with me and talk about everything.

We met last Friday afternoon at my office and we talked for about an hour and half. It wasn’t about buying and selling real estate, it was about HER and her life.

She told me that she racked her brain trying to figure out who she could talk to - who she could trust – and then she thought of me.

All her friends and family were happy to give her advice, but they all had an agenda that wasn’t about her, it was about them…..

She told me that she always knew she could trust me – that I had her best interests at heart.

I can’t tell you how great that made me feel – I was on cloud 9 - this is what the RE business is all about for me – to be acknowledged as a trusted advisor and friend.

Real estate sales is about helping people – taking care of people – holding their hand when the need arose – handling their affairs even more carefully than I handle my own…..

I have never cared about being THE #1 AGENT rah rah rah……..it was about helping one person at a time…..

After 33 years in the local real estate market, I have a strong loyal clientele and I am thankful for that.

It is always a pleasure to help my clients, their friends, families, and associates in any way I can – the focus is on relationships and not transactions.

Mildred, THANK YOU. Your words mean the WORLD to me.