Arn Cenedella

Archive for the 'Real Estate' Category

Time Shares compared to Fractional Ownership

Sarah Scafford of International Listings recently wrote a guest post in Pat Kitano’s Transparent Real Estate talking about the differences between timeshares and fractional ownership. Most of what Sarah writes is spot-on.

I am fortunate to own a fractional at Old Greenwood in the Truckee/Lake Tahoe areas and get to spend 3 weeks a year in a wonderful townhouse with attached garage overlooking the 18th fairway of the Nicklaus designed Old Greenwood golf course.  Amenities include the Pavillion a recreation center containing 2 pools, tennis courts, gym, bar, and restaurant. You can sit at the pool and see the backside of Northstar Ski resort which is about 15 minutes away by shuttle.

I declare this fractional as my second home and deduct both interest and property taxes.

I did not purchase as an investment though I am confident that in 20/25 years when I want to sell, I will get my investment back fully. In the mean time, I get to spend 3 weeks a year golfing and skiing to my heart’s content without the hassles of full vacation property ownership.

Let me know if you would like further information on Old Greenwood.

Los Altos Market Data

Dave Blockhous of Coldwell Banker Los Altos recently did an analysis of the current Los Altos market. In this post, Dave compares market activity (number of sales and listings & average and median prices) over the first six months of the past couple of years. His analysis comes to much the same conclusions as my analysis of the San Carlos, Menlo Park, and Palo Alto markets did: The number of sales are down from years past but the average and median prices have remained stable or increased slightly.

Middle income people are being squeezed!

David Shafer of Uncommon Financial Wisdon  wrote an excellent guest post on Jeff Brown aka the BawldGuy’s Blog  about how the current squeeze on middle income families occuring in our country should effect one’s investment decisions. Jeff is a San Diego real estate broker who specializes in finding good investment properties outside California.

I can certainly say we see this trend in the San Francisco Bay Area market. The upper income desirable communities in San Francisco and the Peninsula are doing just fine during our current economic slowdown where the less costly more affordable lower income areas are facing numerous foreclosures and dropping property values.

I generally advise my clients to purchase in the best area they can.

One can always change the house but one can not change the location.

After 30 years selling real estate on the San Francisco Peninsula, I know the neighborhoods inside and out; I can help point you in the right direction and help you evaluate what neighborhood will be best for you.

Current loan underwriting standards

Much has been written about how the new loan underwriting standards make it more difficult for buyers to qualify for mortgages.

I have two different buyer clients who are currently being impacted by these new standards.

Both are single professional woman who are looking to buy their first homes.

The first has a sales position where her compensation is both salary and commission based on sales. She has been at her current company for about one and a half years. The lender wants a 2 year history of her commission income before it will count any of it. So this buyer can only use her salary income to qualify. Her commission income is about 50% of her salary income. Clearly the lender’s decision to NOT count her commission income limits her current purchasing power. A year ago, stated income loans were available. This buyer could have just stated her income (salary plus commission) accurately based on a 2 year average and the lender would have used that income amount to qualify.

The second client recently changed companies and the lender will not count the bonus income obtained at the prior company eventhough this buyer will get bonuses at her new company. Her bonuses usually amounted to 10% of her base salary. Again the lender’s decision to NOT count this income limits this buyers purchasing power. A stated income loan would have allowed this buyer to qualify for more.

Understand neither of these buyers were going to lie about their income. They were going to accurately state what their income was for the past 2 years and use that figure on their loan application. No deception would have been contemplated. Both were secure in their ability to earn commission and bonus income as they had in the past in determining what they could afford to pay.

This is a case where fraud and deception on the part of OTHER borrowers and mortgage brokers is limiting these two buyers purchasing power.

Weekly Mortgage Update

Linda Lunsman of Princeton Capital writes:

“I NEVER WORRY ABOUT ACTION, BUT ONLY ABOUT INACTION.” ~ Winston Churchill. These words proved especially true last week, as the big story was the Fed’s lack of action following their recent meeting, or decision to leave the Fed Funds Rate unchanged – but is the Fed’s decision a cause for worry? The financial markets seem to think so. The Fed is in a tough spot with the economy performing sluggishly, the housing market still struggling to stabilize, consumer confidence being low, and food and energy costs going up seemingly every day. They made the decision to hold rates steady for now, but looking forward, what does all this mean for Bonds and home loan rates?

While the Fed made a smart move to cut its benchmark rate back in September to stimulate the economy, the continued string of cuts has considerably weakened the US Dollar against the Euro. And since oil is priced in Dollars, the decline of the Dollar has pushed oil prices to rise, even though consumption in the US is down. Prior to the Fed starting their recent string of cuts in mid-September, oil was trading at a then staggeringly high $73/barrel, and it took $1.35 to buy 1 Euro. And after nine months of Fed rate cuts, the Dollar has weakened to where it takes $1.57 to buy 1 Euro…which has greatly influenced oil prices to top $140/barrel. And because oil is involved in so much of what we purchase, prices have gone up on everything.

The bottom line: A stronger stance against inflation by the Fed – which would mean rate hikes ahead – could help strengthen the Dollar, combat high oil prices, and cause Bonds and home loan rates to improve in turn, as inflation is the arch enemy of both. It will be important to see what the Fed decides to do about the Fed Funds Rate at their next meeting in August, so stay tuned!

for more

Annual Home Sales

Here is the a chart showing national annual home sales.

Sales have decreased each year since 2005.

Calculated Risk which has lots of cool data on its site prepared the above chart.

Woodside Plaza Charmer

I have just listed a very charming updated home in Woodside Plaza, Redwood City.

This 3 bedroom ranch style home has a new kitchen, updated bath, new hardwood floors, and new Anderson windows. The residence is situated on a large corner lot with spacious private back yard. List price was originally $869,000 and effective April 5 is $849,000.

Virtual tour

Property will be open April 13, 2008 from 1:30PM to 4:30PM.

San Mateo and San Francisco Counties are doing just fine !

USA Today published a fascinating study of local economies throught the nation.

Most states are doing just fine !

Here’s the map:

Most of California is at risk or already in recession.

Only Bakersfield, Santa Cruz-Watsonville, and San Francisco-San Mateo-Redwood City are in expansion.

Very interesting !

Is it only a matter of time before San Francisco-San Mateo-Redwood City join the rest of California? Or is this precious sliver of land between the Pacific Ocean and the San Francisco Bay immune?

Only time will tell but my sense is that we will continue to do just fine.

Weekly Mortgage Update 2-16-08

Linda Lunsman of Princeton Capital writes:

Last Week in Review

	“CUTS LIKE A KNIFE, BUT IT FEELS SO RIGHT” Bryan Adams And financial pros will tell you it’s wise to never try and catch a falling knife. Seems like decent advice in general – but in the financial world, it means that when the price of a Stock or Bond is in the midst of a severe decline, be very cautious about stepping in to buy…even if it feels so right because the price starts to look cheap. That’s because when prices declines sharply, it often gets even worse, making it hard to call the bottom. That’s why many investors, who attempt to buy on the way down, say the feeling cuts like a knife. And over the past week – Bonds have been dropping much like a knife, and home loan rates have risen by about .25% across the board.

Forecast for the Week

	After a closed market on Monday, all of the coming week’s economic reports will be delivered on Wednesday and Thursday – but don’t expect that any volatility will be limited to those days.  The inflation data and Fed Meeting Minutes could be real market movers. Since inflation erodes the value of the fixed return provided by a Bond, if the news of the week continues to reek of inflation – this could spell more bad news for Bonds and home loan rates. Remember, as a general rule, weaker than expected economic data is good for rates, while positive data causes rates to rise…

for more…….

White Oaks San Carlos Fabulous New Listing

Sarah Hillhouse of Coldwell Banker has just listed 148 Colton Ave., San Carlos for $998,000. First tour is  Tuesday February 12th. This property will not be on the market long.

Colton is one of the best streets in White Oaks – it is only 1 block long so you get little or no through traffic. It is about a 5 minute walk to the outstanding White Oaks Elementary School.

This home contains 3 bedrooms 2 baths and has approx. 1550 sf of living space.

Both the kitchen and baths have been updated.

Here’s a picture:

I may be biased but I have lived in White Oaks on Alberta – about 2 blocks away – for 21 years. I have raised my two sons, now 17 and 21, in the same house. My sons went to White Oaks Elementary and Central Middle School. This is a great place to raise your family. San Carlos is a super family-oriented town – excellent schools – wonderful downtown – and very active community involvement in youth sports.