June 2008 Quarterly Newsletter

Volume 3, Issue 2

Nicholas French, Broker Associate, CRS

June 1, 2008

Quarterly Review Hot Summer Nights Inside this issue: Hot Summer Nights

1

Updated API Scores (5/21/08)

2

The Silver Lining

2

My New Website realtornickfrench.com

2

(cont) The Silver Lining

3

3 Client Testimonial— John Ying & Junjing Yan Money Saving Tip— ROBLOX.COM

3

Updated Neighborhood Statistics

4

Nick’s Updates

4

Share The Newsletter

4

Nicholas French Broker Associate, CRS 4906 El Camino Real #2 Los Altos, CA 94022 650 773 8000 (cell) 650 961 2338 (office) 650 961 5238 (fax) [email protected] www.realtornickfrench.com

With summer just around the corner it is time to consider the activities, camps and events that will fill the days and weekends. I’m sure these months will include summer camps for the kids, sport activities and possibly some weekend trips to Disneyland, the Zoo, and the beach. But do you take advantage of the fantastic events in the community? There is an event for almost every individual and family: from the Los Altos outdoor movie nights, to the Santana Row Flavors of Jazz and Saratoga Shakespeare in the Park. You can fill practically every summer evening with a free outdoor community event; just bring your lawn chair, some picnic snacks and a light jacket – and of course bring your good conversation and smiles. There are even some weekend concerts and festivals such as the Los Gatos Concert Series on Sunday afternoon. I can usually be found at Music in the Park, Los Altos Movie Night and Shakespeare in the Park and I highly suggest all of them! It’s is a great way to get out and meet your neighbors, enjoy some good entertainment and take advantage of our amazing summer weather. I thought it would be helpful to compile a list of these activities, so I have put links to many of the communities on my website for your convenience. If you click the “Community Info” from www.realtornickfrench.com, you will see the button for “Summer Events”. Below are some of the highlighted events:

Location Campbell, Downtown

Event Day Time Dates Summer Concerts Thursday 6:30-8pm June 19 - Aug 14 Summer Concert Cupertino, Memorial Park Series Thursday 6:30-8pm June 5 - July 10 Friday Night Los Altos, Main Street Movie Nights Friday 8:30pm June 20 - Aug 29 Los Gatos, Downtown Music in the Park Sunday 5-7pm June 22 - Aug 31 Summer Concert Menlo Park, Fremont Park Series Wednesday 6:30-7:30pm June 25 - Aug 13 Mountain View, Cuesta Summer Concert Park, Dwntn, Civic Plaza Series Thursday 6:30-8pm July 17 - Sept 4 Twilight Concert Palo Alto, Various Parks Series Tuesday 6:30-7:30pm June 17 - Aug 5 San Jose Dwntwn, Cesar Chavez Plaza Music in the Park Thursday 5:30-9pm July 10 - Sep 4 Santana Row Flavors of Jazz Tuesday 6:30-7:30pm July 1 - Aug 26 Shady ShakeSaratoga, Sanborn Park speare Fri-Sun 7pm Aug 7 - Sep 14 Sunnyvale, Dwntwn Mur- Summer Music phy Ave Series Wednesday 5-8pm June 25 - Aug 27 Dancin on the Willow Glen, Downtown Avenue Saturday 5-10pm June 14

Quarterly Review Page 2

Updated API Scores (5/21/08) The highly anticipated release of the Academic Performance Index ratings have been published (5/21/08). No earth-shattering results, but always interesting to see the inevitable ups and downs in rankings. You can find the ratings on my website, realtornickfrench.com or at the following link: http://api.cde.ca.gov/ reports/page2.asp? subject=API&level=C ounty&submit1=subm it

I enjoy the lively discussion that typically follows these ratings— The coveted lottery school adjustments, school trends or lower than expected ratings. Feel free to contact me anytime to discuss.

The Silver Lining I would bet that in the past thirty days you been engaged in a conversation about the “dismal” real estate market; encouraged by those with the dark cloud forever above them preaching real estate doomsday and somehow surprised that property values do not continue through the clouds without correcting – what a surprise. When loans were given out like Halloween candy and true home payment amounts exceeding one hundred percent of one’s income, you can bet there were some rough roads ahead. The old saying that when your garbage man is giving you stock tips and gardener speculative real estate advice it is time to get out! “I subscribe to the law of contrary public opinion... If everyone thinks one thing, then I say, bet the other way...” (Ricky Roma, Glengarry Glen Ross). Fortunately for many of us we did not succumb to the speculative purchases of the Inland Empire, or Las Vegas, Arizona, Florida, the list goes on. There are definitely those that made a small fortune taking their chances on these sprawling communities; if they took the gains and ran to the bank they most definitely have a permanent smile. If they chose to let it ride you can bet they are singing the real estate blues about now. According to the latest statistics the areas with the sharpest depreciation are Merced, Modesto and Stockton (OFHEO, May 22, 08), all California and the Inland Empire. By now we know the cause and effect; hindsight tells the picture, but what is the next step and where are the opportunities? Fortunately we live in an area with an amazingly robust market. As I wrote in the March 2007 edition, compared to other markets our corrections are typically shorter-lived with less declining. I describe this function by indicating our upswing starts first, has the longest swing and comes down last. So congratulations on your choice of community! Even the top areas right now are experiencing what I see as a stagnant market. Los Altos, Saratoga, Palo Alto, and Menlo Park – the properties that come to market are selling quickly if a few parameters are met: good location, condition, and price. Price is key and don’t kid yourself to think that a house is selling under priced just because of the market. If it is priced low it generally gets multiple offers and sells at a reasonable range. Surprising to many some houses are even selling significantly lower than their purchase less than twelve months ago in these top locations. I have seen closing prices 7-15% less than their purchase price and this is even before closing expenses and carrying costs. Is this a sign of how much the market dropped or just some crazy purchases? I argue that these buyers purchased too much when they bought the properties. I remember each of these transactions and thinking how they spent too much when they bought it. In this same period others are selling for their original purchase price – stagnant market. This just supports the fact that in any market there are good and bad deals. There is no replacement for doing the homework, having strong representation and presenting a powerful offer! The over-priced and less desirable properties are sitting on the market waiting for a reasonable seller and buyer. You may find a handful of emotional deals, but for the most part the irrational exuberance has deflated – the real question if for how long? I am seeing a build-up of inventory in our top areas because (continued page 3)

My New Website— realtornickfrench.com I am happy to announce the launch of my new website, www.realtornickfrench.com. I have been working to add useful tools and resources for clients whether currently looking to buy or sell or already in a home. My goal is that my site can be shared with family, friends and colleagues and have something for everyone, whether looking for investment tips, current properties, neighborhood information or any other value-add items. I am open to suggestions, so next time you are surfing the web stop by my site and enjoy! I have all of my previous quarterly newsletters posted as a resource and for sharing as well as adhoc and automatic property search tools. The Utility Contact List is most helpful to new homeowners and the community section should be informative for just about everyone. I look forward to your feedback and as always appreciate your support!

Volume 3, Issue 2 Page 3

The Silver Lining (cont. Page 2) the sellers are not being realistic. The greatest is when a seller had the property listed twelve months ago for a price and couldn’t sell it, then relists now for the same price or higher. I am seeing those too and it typically paints the picture for the situation. This is very different from other areas as close as South San Jose. You may have a great list price, condition and good location, but the buyers just aren’t there. Is this an opportunity? I think the signs are still pointing towards additional inventory and slowing in some areas. Foreclosures and bank-owned properties are up and if you surf through the MLS there is an alarming amount of short sale properties on the market; these short sales will most likely turn into foreclosures and bank-owned properties in the near future. Generally the banks will then list the properties to sell with aggressive reductions if they don’t move. With these variables still playing out in the marketplace as well as the volume of inventory, I do not see a silver lining in the foreseeable future. Is it time to take advantage of these opportunities and purchase a rental property? Rents are up and prices are down; music to the ears of an investor. It then turns into an investment question and at what point do you make the move. With the price earnings ratio improving it is more a determination of the income verses cost of owning. Previously people were buying out of the area because of the cash flow and the decision of cash to growth. With higher rents and lower base costs to own I am starting to see a swing into rental purchasing. But don’t go out tomorrow and buy a rental property – there is substantial research that is needed, economic factors calculated and finding what will hopefully be the best bang for the dollar. I am considering hedging my rental purchases since the bottom of the market is unknown. If you spread out the purchases and make careful decisions you should lower your risk and increase your smiles. There should be some great opportunities while others won’t touch real estate. History tells us that once we hit the bottom in these areas it is not a jolt the other direction; the process is slow giving us good time to consider whether we are ready to become landlords. I am here to support you with your questions, analysis and purchases. Feel free to contact me anytime and we will see if it is a good time for you or if we should continue the waiting game.

Money Saving Tip

An Alternative to the Expensive Computer, XBOX, and other Console Games—ROBLOX Explore your creativity by creating your own game! - invent, design, invite and play a game that you design and it is FREE! - I created an account to try out the service and

Client Testimonial—John Ying & Junjing Yan It is a true pleasure getting to know Nick and have his professional help in buying our second home. He has been helping us look for homes for three years... Yes, 3 years, what a home search! Really hard to imagine...yet we made it with Nick! He has the instinct, which is rare among most, to understand clients' taste, value system, and finance condition from just a couple of house touring’s. He magically blends all these elements along with the housing/finance market condition and makes the most suitable suggestions. He does not push with showing homes or making offers, points out the drawbacks of each property from his professional view and protects us from making bad offers. He frequently shares his value and his understanding of the market and we find this very helpful.

was impressed! Something to think about before purchasing the next video game. Check it out at www.roblox.com

I think helping his clients find the most suitable and comfortable home is what he really enjoys! Picky and tough clients like us – we are really lucky and blessed to have Nick finding us a perfect home in Los Altos and continue to enjoy his professional help whenever possible.

Send me your Nick's easygoing and super patient personality, great, great people skills, and a level of outstanding professionalism distinguish him from others. From him, I get to know what a full service real estate agent really is.... Finally I'd like to share a quote I use so often among my circle of friends: "You will never go wrong with Nick when buying a home in Los Altos"

money saving tips for upcoming newsletters

Updated Neighborhood Statistics

Nick’s Updates

Med Price

Avg Price

Avg DOM

100.34

$ 1,185,000

$ 1,271,490

45

80

100.98

$ 1,155,000

$ 1,192,545

45

2007 Q3

106

100.57

$ 1,267,500

$ 1,389,440

31

Los Altos

2008 Q1

46

100.11

$ 1,892,500

$ 2,020,065

31

Los Altos

2007 Q4

63

100.13

$ 1,750,000

$ 1,938,176

40

Los Altos

2007 Q3

78

104.32

$ 1,785,500

$ 1,897,392

32

Los Altos Hills

2008 Q1

11

95.90

$ 2,900,000

$ 2,924,909

112

which benefits my

Los Altos Hills

2007 Q4

12

96.61

$ 2,462,500

$ 2,694,916

63

clients when bidding on

Los Altos Hills

2007 Q3

20

96.03

$ 2,448,000

$ 2,769,977

74

homes. All this while

Los Gatos

2008 Q1

51

97.83

$ 1,595,000

$ 1,651,725

82

maintaining my

Los Gatos

2007 Q4

48

98.0

$ 1,450,000

$ 1,662,901

75

business and clients

Los Gatos

2007 Q3

77

98.11

$ 1,470,000

$ 1,590,200

53

Menlo Park

2008 Q1

55

99.67

$ 1,535,000

$ 1,787,681

48

Menlo Park

2007 Q4

72

98.47

$ 1,255,000

$ 1,435,278

40

Menlo Park

2007 Q3

99

100.93

$ 1,207,000

$ 1,330,007

36

Daily and Voice articles

Monte Sereno

2008 Q1

7

97.06

$ 1,820,000

$ 2,039,285

141

as well as be a main

Monte Sereno

2007 Q4

8

96.24

$ 2,125,000

$ 2,459,375

147

story for a real estate

Monte Sereno

2007 Q3

9

96.62

$ 2,050,000

$ 2,458,055

46

journal discussing the

Palo Alto

2008 Q1

65

100.13

$ 1,617,500

$ 1,977,301

20

current rental market. I

Palo Alto

2007 Q4

88

104.06

$ 1,583,500

$ 1,861,633

24

was also given the

Palo Alto

2007 Q3

113

104.15

$ 1,638,000

$ 1,912,255

23

opportunity to have my

Saratoga

2008 Q1

61

98.43

$ 1,565,000

$ 1,674,203

67

clients in a New York

Saratoga

2007 Q4

71

98.29

$ 1,550,000

$ 1,754,963

54

Times main story with

Saratoga

2007 Q3

86

98.40

$ 1,666,500

$ 1,887,618

80

full picture!

Sunnyvale

2008 Q1

94

100.36

$ 893,133

$ 893,744

52

Good times!!

Sunnyvale

2007 Q4

109

101.43

$ 900,000

$ 898,608

34

Sunnyvale

2007 Q3

172

102.76

$ 930,000

$ 956,583

19

I am pleased to

No. of Closed % of List Sales Price

City

Year Qtr

announce that my

Cupertino

2008 Q1

52

Realtor Leadership has

Cupertino

2007 Q4

been going well. I am

Cupertino

supporting over 500 local Los Altos Realtors, conducting strong meetings and receiving positive feedback,

I have had the privilege of support-writing several Town Crier,

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 information and I will make contact. 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.