December 2006 Quarterly Newsletter

Volume 1, Issue 1

Catton Properties

December 1, 2006

Quarterly Review Inside this issue: Inaugural Issue

1

Los Altos At a Glance

1

Really, where is the Real 2 Estate Market? New Laws in 2007

2

What are the Signs of a Changing Market?

3

A Real Slip and Fall Case

3

Current Neighborhood Statistics

4

Inaugural Issue Welcome to my first quarterly Real Estate newsletter. My goal of this publication is to provide valuable information to my clients, family and friends about the Real Estate market, economy and our local communities. I will also have some lighter information such as updates about my life, fun stories, etc. This is a long overdue goal of mine and am glad I can now get this information to you. Any suggestions that would make this publication more valuable to you and your family and friends are greatly appreciated. I do not intend this to be a marketing pitch like other generic newsletters you may receive, but rather an information source compiled by me that I think will add value to you, your family and friends. I write these articles utilizing data from multiple sources, experiences from my daily activities and listening to my clients’ actions and concerns. I hope you enjoy my newsletter!

Los Altos At a Glance... My intention is to have an ongoing section highlighting our communities. This quarter I am highlighting Los Altos and their planning strategies. 1) Charities Housing has a proposal in process for the old Echo site on Miramonte in Loyola Corners. They intend to have a mix of residential and retail space, which is a style growing in popularity. There have been a number of meetings with the Planning Commission and some changes are being made to fit within the neighborhood requirements. The development will include 14,290 square feet coverage with 2,800 square feet of retail space. The 30 feet high building will consist of two parking garages with twenty-five spaces and thirteen condos on the second floor totaling 9,774 square feet. 2) Silverstone Communities proposal for the 2.2 acre Red Lobster and Round Table Pizza sites at the corner of El Camino and Los Altos Avenue was approved by Planning and Council. The seventy-eight unit development will include one, two and three bedroom condominiums and sixteen two-story three bedroom town homes. The condominium building will stand thirty-five feet high and the town homes twenty-seven feet in height. Eight of the units will be below market rates with a mix of one and two bedroom condominiums. Nicholas French Broker Associate 4906 El Camino Real #2 Los Altos, CA 94022 650 773 8000 (cell) 650 961 2338 (office) 650 961 5238 (fax) [email protected]

3) Plans have been submitted for the redevelopment of a two-story office building on San Antonio near the corner of Pasa Robles, including a few of the buildings in the Los Altos Gardens. This is in the infant stages with the town and I am sure that I will hear more about this project in the coming months. 4) The downtown is a constant area of discussion amongst the residents. There are many opinions as to how the area should evolve, but unfortunately there is no one clear strategy thus far amongst the decision makers.

Quarterly Review Page 2

Really, where is the Real Estate Market? For all of you that drive while talking on the cell phone - new state legislation prohibits talking on the phone while driving unless using a “hands-free” device. The fine for a first offense is $20, each subsequent fine is $50. These infractions will not be considered a point on your driving record. SB 1613 Effective July 1, 2008

I do not believe a legitimate expert would argue that the national Real Estate market has not been declining over the past several months. We are experiencing record declines in prices and sales in both new and existing properties in certain parts of the country, but remember that these same declines are following historical increases in generally the same regions. According to the Office of Federal Housing Enterprise Oversight (OFHEO) data, the Metropolitan Statistical Areas which increased over one-hundred percent over the past five years are currently experiencing the greatest declining markets. Many of these locations include parts of Florida, Washington DC, Nevada, Southern California and the Central Valley. I think it is interesting to point out that the Peninsula and South Bay had about a fifty percent increase in the same time period. In my opinion, under the same economic conditions our declining market will see a much lower percentage drop than other regions. The California Association of Realtors is forecasting a decline in the regions such as Southern California and the Central Valley greater than the state as a whole. This is good data for you given that we are in an area quite unique from other regions. But do take note that even our robust area suffers historical declining markets. Granted these declines are generally less severe than other areas, which supports that our area is a great place to safe-guard your money. Metropolitan Statistical Area Appreciation Rates MSA 1-yr Qtr Bakersfield, CA 22.24 2.26 Fresno, CA 17.04 0.93 Riverside- San Bernardino, CA 17.72 1.75 Miami- Miami Beach-Kendall, FL 25.36 4.72 Los Angeles- Long Beach, CA 19.19 2.2 Fort Lauderdale- Pompano Beach, FL 20.83 0.69 Palm Bay- Melbourne, FL 16.63 0.71 Modesto, CA 13.62 0.1 Deltona- Daytona Beach- Ormond Beach, FL 23.23 3.57 Washington DC- Arlington, MD WV 15.67 1.79 Winchester, VA WV 16.96 2.2 Las Vegas- Paradise, NV 11.87 0.57 Reno- Sparks, NV 8.78 -0.85 San Diego- Carlsbad, CA 5.61 0.15 Sacramento- Roseville, CA 6.51 -0.38 Phoenix- Mesa- Scottdale, AZ 26.1 2.9 San Francisco- San Mateo- Redwood City, CA 9.27 1.23 San Jose- Sunnyvale- Santa Clara, CA 10.29 1.79 * data released September 5, 2006, OFHEO

5-yr 143.31 143.21 141.19 137.85 135.95 134.52 127.72 119.35 119.01 111.74 106.58 106.57 106.16 104.3 102.96 100.61 58.05 46.89

New Laws in 2007 AB 1169 60-Day Notice to Terminate Lease—This law reestablishes the sixty (60) day notice which is required by landlords to give to residential tenants on periodic leases (e.g., month-tomonth lease) when the tenants have been living in the property for at least one year. This law maintains the exception of a thirty (30) day notice for certain qualifying properties for sale. AB 2618 Small Claims Court—This new law increases the jurisdictional limit in small claims court to $7,500 on certain issues, which were left unchanged when general limits increased from $5,000 to $7,500 last year. SB 1607 Property Tax Reassessment Exemptions—This new law clarifies certain exemptions from property tax reassessments. Most importantly, it clarifies that the exemption for transfers between grandparents and their grandchildren will be liberally construed.

Volume 1, Issue 1 Page 3

What are the Signs of a Changing Market? How healthy is the Real Estate market? Are we in a Buyers market? Where is the market going? These common questions and the opinions thereafter generally use a set of indicators to forecast the health of the Real Estate market. I would like to share some of these indicators with you, so that you too can watch the signs of the market. The indicators below are used on a national level and some may not be as significant to our area such as the new home sales. If you would like more information about these indicators or any other questions please feel free to contact me. Monthly Inventory – Indicates how long the current inventory would last on the market given the current sales rate Housing Starts – literally this is the number of new homes started in a given time. You will see this figure is closely correlated with the builder’s confidence; as this number lowers they are signaling lower confidence in the near-term growth New Home Sales – Defined as a new home with an accepted deposit or signed sales contract Existing Home Sales – Measures closed transactions of existing single-family homes, townhouses, condos, etc. In my opinion this is a better indicator of affordability than new home sales Median Sales Price – Price point where half of the houses sold in that period are at a higher price and half are at a lower price Affordability – I argue one of the most important indicators for forecasting. This tells us how expensive properties values are in relation to household incomes Mortgage Defaults – Measure indicating how many borrowers are having trouble meeting their mortgage obligations. As the figures rise it is typically associated with a weakening economy

A Real Slip and Fall Case An inmate in Decatur, Georgia found himself before the judge sooner than he expected when he fell through the courthouse ceiling into the judge's chambers while trying to escape, according to local police. The not so light footed inmate, Ben N. Rogozensky, was one of about a dozen inmates awaiting hearings on September 6, 2003 when he was taken to the empty jury room to speak with his attorney. The inmate asked to go into the adjacent restroom and from there staged his illfated getaway, climbing into the ceiling crawl space. State Court Judge J. Antonio DelCampo was in the courtroom when the barefoot Rogozensky fell through the ceiling and landed near the judge's desk in his chambers. A technician who was fixing the judge's computer called for security officers, who grabbed Rogozensky in the hallway. Source: St. Petersburg Times, AP, "Inmate Falls Into Judge's Chambers," September 9, 2003.

Fun Facts: According to Hallmark, the average person receives eight birthday cards annually

In the U.S., the most common excuse made to get out of a paying a ticket is to say they missed the sign

There are over 1,000,000 swimming pools in Florida, even though the ocean is no farther than 80 miles away

Did You Know?

If you have three quarters, four dimes, and four pennies, you have $1.19. You also have the largest amount of money in coins without being able to make change for a dollar

Current Neighborhood Statistics Area

Year Qtr No. of Closed Sales

% of List Price

Med. Price

Avg. Price

Avg. DOM

Campbell

2006 Q3

48

99.16

810,000

890,568

48

Campbell

2006 Q2

82

99.65

791,000

847,059

27

Campbell

2006 Q1

72

99.8

752,000

793,184

33

Cupertino

2006 Q3

108

100.01

1,040,000

1,131,709

31

Cupertino

2006 Q2

119

102.05

1,131,000

1,155,527

23

Cupertino

2006 Q1

82

99.25

1,130,000

1,198,718

42

Los Altos

2006 Q3

93

99.11

1,652,000

1,792,445

37

Los Altos

2006 Q2

95

100.27

1,570,000

1,721,938

28

Los Altos

2006 Q1

74

99.9

1,603,000

1,790,042

38

Los Altos Hills

2006 Q3

25

97.17

2,300,000

2,677,600

54

Los Altos Hills

2006 Q2

26

93.72

2,400,000

2,796,710

90

Los Altos Hills

2006 Q1

21

96.34

2,750,000

2,890,214

114

Los Gatos

2006 Q3

64

97.2

1,323,000

1,510,684

55

Los Gatos

2006 Q2

91

98.95

1,350,000

1,478,012

48

Los Gatos

2006 Q1

60

98.98

1,375,000

1,469,904

65

Menlo Park

2006 Q3

80

100.44

1,277,000

1,436,338

34

Menlo Park

2006 Q2

132

102.24

1,250,000

1,444,724

36

Menlo Park

2006 Q1

74

100.75

1,395,000

1,574,270

43

Monte Sereno

2006 Q3

9

97.7

2,050,000

2,223,000

94

Monte Sereno

2006 Q2

12

100.33

1,745,000

1,982,708

39

Monte Sereno

2006 Q1

11

95.05

1,650,000

2,054,914

157

Mountain View

2006 Q3

80

100.38

920,000

1,013,884

33

Mountain View

2006 Q2

93

102.13

930,000

1,017,886

27

Mountain View

2006 Q1

63

101.61

885,000

933,224

34

Palo Alto

2006 Q3

121

102.57

1,285,000

1,476,630

30

Palo Alto

2006 Q2

184

102.11

1,380,000

1,522,089

29

Palo Alto

2006 Q1

96

102.73

1,400,000

1,538,124

37

Saratoga

2006 Q3

75

97.05

1,514,955

1,676,349

54

Saratoga

2006 Q2

113

99.41

1,565,000

1,666,530

58

Saratoga

2006 Q1

71

97.3

1,720,000

1,827,217

52

Please Send This Newsletter to My Family and Friends If you know someone who would like to receive this newsletter I would like to send it to them. Please either have them contact me or provide me their contact information and I will make contact with them. My goal is to have this newsletter add value and be an information source for my clients, family and friends. Please do not hesitate to contact me if I can help you with any real estate questions, strategies or if you are seeking quality representation.