September 2007 Quarterly Newsletter

Volume 2, Issue 3

Nicholas French, Broker Associate, CRS

September 1, 2007

Quarterly Review Inside this issue: Los Altos Hills At a Glance

1

Housing Market Comic

1

Buy, Sell, Hold: The Million Dollar Question

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Client Testimonial -

2

Yabo Lin & Family

Are You In Good Hands?

2

Buy, Sell, Hold: The Million Dollar … (cont)

3

Historical Percentage Change (MSA)

3

Nick, What’s New?

3

Looking For a Referral? 4

Current Neighborhood Statistics

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]

Los Altos Hills At a Glance... Dedicated to the “preservation of the rural atmosphere of the foothills”, Los Altos Hills is one of the most sought after communities on the Peninsula. Its rolling hills, picturesque views and natural preserves are just a few of those reasons. The approximate 14 square miles, which makes up the Los Altos Hills community, include some of the most spectacular homes in the country as well as privately-maintained open space preserves for the enjoyment of outdoor enthusiasts. Whether you wish to engage in bird-watching, photography, hiking, bike riding, horseback riding or a pleasant afternoon picnic, you will find the setting and opportunity in this fantastic community. I welcome you to enjoy the Los Altos Hills community and its residents. Pathways System – Sixty-three miles of trails that meander through the hills and valleys of the town. Some of the trails run alongside private residences and all are to be preserved in its natural setting. The system was designed for walkers, runners, bicyclists and equestrians and is a fantastic way to enjoy the town! Hidden Villa – A hidden treasure in Los Altos Hills! The 1,600-acre land preserve is great for the whole family: educational farm, wilderness area, visitor center, nature shop, trails and a youth hostel. It is a popular destination, but you would be surprised how many residents have never visited this fantastic preserve in their backyard. Rancho San Antonio – 167-acre park with facilities for bicycling, hiking, running, model airplane flying, photography and much more. Within the park is Deer Hollow Farm, a functional farm that can be enjoyed by the whole family. You may experience difficulty parking on the weekend mornings, so arrive early; I would say it is the most popular preserve in the area.

Quarterly Review Page 2

Are You In Good Hands? The unfortunate 2007 fires in Lake Tahoe devastated not only the natural settings, but also many homes and insurance policies that didn’t have enough coverage to pay for the damages. Unfortunately, most people do not realize they are under-insured until it is too late. I’m not an insurance agent, but feel it is my responsibility to remind my clients, family and friends that adequate insurance coverage whether auto, hazard, life or an umbrella policy is a necessity. I know a few individuals that were under-insured in the Tahoe fires. Fortunately, they have the means to rebuild, but what about those without the means and insurance coverage to regain their lifestyle? It is a sad state of affairs and I would like to help you avoid a similar situation.

Buy, Sell, Hold: The Million Dollar Question Truly the multi-million dollar question on many minds is whether to buy, sell or hold your property or position. If you are considering buying you may wonder what incentive such as a trip to Hawaii or plasma television is offered by the seller or steep discount in price. If selling, you may have anxiety as to whether qualified buyers can obtain financing or if you can sell at your list price. And of course there is the hold position in which you may be one of the many analyzing the market anticipating a Fed rate change, a stock market correction or waiting for depositors to run amuck at the banking institutions; in either case anticipating a good time to take action. This financial analysis includes running scenarios, analyzing the risks of each and determining the best course of action. As the media has so subtly stated, the national real estate market is experiencing significant sale declines after a substantial gain during the first part of the decade. “Sales are down “x” percent year over year.” It is important to understand the difference between sales and price statistics. For most of 2007, I have seen statistics addressing sales declines and pockets of concern. When sales are mentioned it is referring to the number of transactions, or volume of inventory, not the actual price or values. Locally, I have heard statistics figures with sale declines up to thirty percent. This sounds terrible, right? Fundamentally, this is a good scenario for sellers when there are motivated buyers because that means there are few choices for the many buyers. That is exactly what we have been experiencing locally in 2007. Sales are down but prices are up. Some may say this is counterintuitive, but this scenario has played out well for sellers in the most desired parts of our communities. We would be analyzing a different scenario if we lived in Orlando Florida. After the speculatorboom, this area is experiencing approximately sixty-four percent sales drop year over year and an unprecedented twenty-nine month supply of inventory. Needless to say they are experiencing significant price drops as well. More specific to our region, as of July 2007, data suggests that Los Altos, Mountain View and Palo Alto had approximately thirty-six days worth of inventory on hand compared to Central, East and South San Jose with just over one year of inventory. This supports why certain areas have experienced price increases while others are slipping. When making a commitment to real estate it is important to do your homework and due diligence before making your decision. Is it the right time? This is the next logical question when reviewing your scenario. The goal is to achieve a good value, which is somewhat subjective but includes price, location, property type, amenities, and cash flow. In any market we look at properties as independent entities as well as historic and forecast data to project growth. This guides some of our decision making as

Client Testimonial - Yabo Lin & Family “What we appreciate most is Nick's relentless dedication and hard work, honesty, tenacity, efficiency, positive attitude, the ability to know our needs and thorough and intimate knowledge. He always went out of his way to accommodate our schedule. We would usually meet at our home from 9:30 p.m to close to midnight to discuss possible properties to pursue. In the process, Nick has become a good friend to us and our kids. He is also our trusted adviser on things beyond real estate.”

Volume 2, Issue 3 Page 3

Buy, Sell, Hold: The Million Dollar … (cont) to timing and price. The best way to find value is diligence, hard-work, and knowledge of neighborhoods and the market from the micro and macro level. It is not having reservations about making an under asking (or under value) offer if the situation presents itself. I often use this example when discussing value: “Assuming a property value is $1,000,000, would you rather purchase where the listing price is $900,000 and you pay $975,000 paying over-asking or a list price of $1,200,000 paying only $1,075,000 being under the asking price?” I use this example to demonstrate the importance of value. Understanding the values of a given neighborhood is paramount. I believe this example will have greater significance in the coming months as my clients will be looking for better values (I say better values because we always want to find value) to hedge against any downturn we may experience in our local market. I am dedicated to negotiating the best deals for my client and I feel that more questions will surface in the coming months regarding value and market projections. Value has some subjective attributes as it addresses the desirability of a particular property and neighborhood. Going into the latter part of 2007, the mortgage crunch, market uncertainty and urgency of prospective buyers should play key roles. There are many variables that can cause the market to shift up or down; it is important to stay informed and know your objectives. I encourage my clients whether buying or selling as a primary home or investment to review their financial and personal goals and as opportunities arise allow me to work hard to find good properties and values.

Historical Percentage Change (Metropolitan Statistical Areas) San Jose-Sunnyvale-Santa Clara, CA Oakland-Fremont-Hayward, CA (M SAD)

San Francisco-San M ateo-Redwood Cit y, CA (M SAD) San Diego-Carlsbad-San M arcos, CA

Sacrament o-Arden-Arcade-Roseville, CA

Sant a Cruz-Wat sonville, CA

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Nick, What’s New? As most of you know, I am always looking for ways to maximize myself whether business, family, volunteering or health. In 2007, I have completed several athletic events such as the San Diego Rock n’ Roll Marathon, Annual Muddy Buddy Challenge and will be competing in the upcoming Santa Cruz Big Kahuna Triathlon. This Half-IronMan event consists of 1.2-mile swim, 56mile bike and a 13.1-mile run. I have also become an Uncle... two-fold-Welcome Madeline Faith and Jacob Steven.

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I am investigating the possibility to move my Junior Achievement volunteer efforts from the Northern Peninsula to a local elementary school.

Looking For a Referral? Whether you are searching for a specialized Doctor, Dentist, Chiropractor, Financial Planner, Attorney, local restaurants, practically anything you can imagine... I can be a resource for you. I can provide referrals or just information about your search.

Current Neighborhood Statistics Year Qtr

No. of Closed Sales

% of List Price

Med. Price

Avg. Price

Avg. DOM

Cupertino

2007 Q2

139

103.58

$1,196,000.00

$1,263,864.00

23

Cupertino

2007 Q1

87

99.18

$1,150,800.00

$1,263,571.00

49

Cupertino

2006 Q4

70

98.83

$1,125,000.00

$1,187,688.00

56

Los Altos

2007 Q2

124

102.71

$1,757,500.00

$1,911,674.00

33

Los Altos

2007 Q1

59

100.13

$1,643,000.00

$1,732,843.00

65

Los Altos

2006 Q4

90

98.52

$1,635,500.00

$1,842,641.00

55

Los Altos Hills

2007 Q2

37

97.96

$2,705,000.00

$3,156,780.00

91

Los Altos Hills

2007 Q1

27

94.94

$2,249,925.00

$3,191,663.00

148

Los Altos Hills

2006 Q4

21

95.54

$2,250,000.00

$2,541,704.00

158

Los Gatos

2007 Q2

112

97.09

$1,399,500.00

$1,653,932.00

59

Los Gatos

2007 Q1

72

97.53

$1,475,750.00

$1,572,226.00

71

City/ Area

Los Gatos

2006 Q4

83

97.97

$1,355,000.00

$1,538,690.00

75

Menlo Park

2007 Q2

148

102.32

$1,300,000.00

$1,454,825.00

25

Menlo Park

2007 Q1

85

100.92

$1,250,000.00

$1,522,614.00

58

Menlo Park

2006 Q4

89

98.24

$1,245,000.00

$1,418,394.00

49

Monte Sereno

2007 Q2

8

97.41

$1,924,975.00

$2,086,868.00

29

Monte Sereno

2007 Q1

11

97.56

$1,850,000.00

$1,856,863.00

70

Monte Sereno

2006 Q4

8

95.43

$1,893,750.00

$1,840,062.00

51

Mountain View 2007 Q2

77

104.70

$1,098,000.00

$1,122,895.00

15

Mountain View 2007 Q1

42

104.27

$ 946,500.00

$1,019,072.00

27

Mountain View 2006 Q4

74

99.89

$ 941,500.00

$ 987,752.00

32

Palo Alto

2007 Q2

162

104.52

$1,531,500.00

$1,808,937.00

27

Palo Alto

2007 Q1

99

102.47

$1,500,000.00

$1,950,789.00

43

Palo Alto

2006 Q4

112

100.49

$1,320,625.00

$1,538,639.00

40

Saratoga

2007 Q2

109

98.48

$1,688,000.00

$1,867,730.00

50

Saratoga

2007 Q1

78

97.69

$1,687,500.00

$1,889,980.00

80

Saratoga

2006 Q4

58

96.75

$1,550,000.00

$1,703,474.00

96

Sunnyvale

2007 Q2

205

104.49

$ 930,000.00

$ 946,384.00

21

Sunnyvale

2007 Q1

129

102.58

$ 815,000.00

$ 837,896.00

38

Sunnyvale

2006 Q4

155

99.62

$ 805,000.00

$ 833,967.00

38

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. 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.