All too often, pundits who write or broadcast about the US economy measure the strength of the housing market by home prices.  According to their traditional wisdom, rising home prices represent a strong market and lower home prices mean the market is weak.  Well, I beg to differ, as I believe the opposite is true.As home prices reached never before seen highs in the 1970's, lenders realized that fewer and fewer consumers could foot the monthly mortgage bill at prevailing interest rates.  To maintain sales volume, lenders began offering longer amortization periods, replacing the typical 15 and 20 year mortgage with a loan paid off in 30 years.  The 30 year mortgage became standard as home prices continued to rise, and by 2006 some banks offered 40 and 50 year loans.It doesn't take a roc... 05/31/2011

While walking the Dish this morning I noticed that all the cows were lying down.  Even though there are hills between the groups of cows so they can not all see each other they were all lying down.  I was doing an 8 miler and since I am incredibly slow It took me a while to get up and down the portion from the Dish to Alpine Rd, twice.  By the time I started back up the hill the second time the cows started standing. And by the time I reached the Dish again they were all standing. My conclusion was obvious. they are all using Twitter so they know when to rest, and when to stand up.     05/30/2011

While driving through any of California's wine producing regions, you'll see that vines pruned to dark brown are once again bright green with new spring growth.  Summer is around the corner and it's time to tour the vineyards and taste the new releases.  Wine tasting is partly about the wine and partly about the adventure, places and people experienced along the way.  It can be a very social experience. During a recent late night Internet click-a-thon, I came across www.govine.com, a web site where members share their favorite wine tours and notes on wines and wineries.  Membership is free and there is little advertising.  Members pick from an extensive database of primarily northern California wineries to create personalized tours that are shared with other members.  To create a custom... 05/28/2011

  How is a Palo Alto Trust Sale Different From a Regular Sale   A trust sale is not the same as a regular sale. But the differences are not that great. It is actually a much more simple process than a probate sale, and a world away from a short sale or foreclosure.   In a trust sale, the owner of a property has passed away and the home is being sold to settle an estate.  The seller of the house is the successor trustee to the estate and is charged with disposing of the assets of the estate to be distributed to the heirs.  The successor trustee can be anyone the owner appointed, a child or other relative, a trust department from a bank, a professional like a lawyer or accountant.   Certain rules apply:   1.     The house is sold “As Is” 2.     Disclosures are limited.  You will not be gi... 05/25/2011

  How is a Palo Alto Short Sale Different From a Regular Sale   A short sale is not the same as a regular sale and the differences are very significant. It is not a simple process and if you are buying or selling a short sale you should be working with an agent who knows what her or she is doing.   In a short sale the seller owes more on the home than it is worth. The seller needs to ask the lien holders if they will accept less than the amount owed to them.  There can be one or more lenders, and there can also be liens from other places, tax liens, personal loan liens, etc.  Every lien holder has to agree to agree to take less, and the first lien holder gets to say how much they are willing to give to the other lien holders. If everyone can come to an agreement then the sale can procee... 05/21/2011

You have been searching for months and finally found the condo that works the best for you. It is all remodeled with your taste, is on the top floor, has ample parking, inside laundry, and air conditioning in your price range.  Sound like a fantasy. The disclosures are on line and when you and your agent read them you discover your dream home just turned into a nightmare.  The HOA is suing the builder, or the someone is suing the HOA.  Well, there goes the loan. Getting a loan on a condo is a little more difficult than getting a loan on a single family home to begin with.  If you add in a law suite it becomes almost impossible.  Without a cash buyer or maybe a hard money lender (private investor) the home will probably not sell.   So what should you do?  I wish I had a majic bullet, but... 05/12/2011

I do not go out to eat a lot, but when I do I want something good, and at least a little different from what I usually eat.  Rice on El Camino in Palo Alto has become my new favorite place to lunch in Palo Alto.  As the name suggests they serve food made from, or with rice, and you get your choice of either brown or jasmine rice.  They have a wide variety of curries, soups, and rice noodle dishes. My favorites are Drunken Noodles, Green Curry, and spicy rice noodle soup. Drunken Noodles, are like chow fun, but much more flavorful. Spicy noodle soup is a very flavorful chicken broth with chile spices and thin rice noodles. You can add meat, shrimp, or chicken to either of those. The curries are also delicious, and nothing tastes too greasy. Rice is located at 3924 El Camino, next to Happ... 05/11/2011

Buyers, sellers, investors, welcome back to another installment of Real Estate Jargon, aka, simple explanations of real estate terms not normally found in nature. In 1982, the California legislature passed the Community Facilities District Act, nick-named "Mello-Roos" after its co-authors, Henry Mello and Mike Roos.  The Act authorizes creation of "Community Facilities Districts" that can sell bonds to finance development and maintenance of public infrastructure in specified areas (the "districts").  The Act was the government's response to the taxpayer revolt in 1978 that resulted in the passage of Proposition 13, which limited the ability of local governments to raise property taxes at a rate higher than the rate of inflation.  In other words, Mello-Roos assessments were specifically ... 05/09/2011

Located in the heart of Silicon Valley, the towns of Palo Alto, Los Altos, and Los Altos Hills have it all.  Beautiful neighborhoods, shopping, fine restaurants, and a growing job market.  The area is home to Stanford University and dozens of the most notable and successful high-tech companies in the world. Like everywhere in California, a few bank-owned foreclosure properties (REO) and potential short sale (SS) properties occasionally come on the market in Palo Alto, Los Altos and Los Altos Hills.  Although home prices in this area are generally high, deals can be found.  Here are bank-owned and short sale properties offered for sale under $4,000,000 as of May 8, 2011.  See any you like?  Let me send you more information and then let's go take a look at them! Palo Alto Type Bed/Bath Pr... 05/08/2011

In this series, we're analyzing rental property operating statements to find ways to maximize our return on investment.  In Part 1, we looked at ways to maximize revenue.  In Parts 2 and 3, we looked at controlling direct and indirect expenses.  In Part 4, our final installment, we'll look at how operating statements influence common performance measurements.  We'll also look at how those measurements support buy, sell and hold decisions. Although there are dozens of measurements that can be applied to the financial performance of any business, rental property investors are most commonly concerned with these two: Capitalization Rate:     Cap Rate = Net Operating Income/Purchase Price Cash On Cash Return:     Cash On Cash Return = Annual Cash Flow/Initial Cash Invested Let's apply each o... 05/07/2011

Every year Palo Alto has a May Fete Parade. This year it is this Sat May 7th starting at 10 AM on University Ave.  One of the special aspects of this years parade will be the emphasis on children's books.  The theme this year is "Books are a Hidden Treasure."   According to the city of Palo Alto: In keeping with the theme, there will be a Reading and Literacy Fair on Lytton Plaza from 9-11AM.  There will be reading and literacy programs and perhaps some children’s book authors (pending).  We are looking for donations of gently used children’s books, preschool-8th grade, preferably in paperback, for library projects in both Ghana and Malawi. Please bring the donations to Lytton Plaza from 9-11am on parade day.  You can also drop off the books at the Lucie Stern Community Center, 1305 Mid... 05/05/2011

Summer is approaching and many of us are making plans to visit one of the fantastic California wine-producing regions.  From Temecula to Sonoma, the Golden State is blessed with a dozen or more "wine countries" that make for a fun day trip or weekend get-away.  As a year-round resident of the Bay Area, living in Palo Alto during the week and near Napa on weekends, I have the opportunity to cruise one of the world's finest wine countries on a regular basis.  Through trial and error, I've picked up some tips on how to prepare for a day in wine country that make the experience more comfortable and enjoyable. Whether we wake up in the luxury of a wine country hotel or start our adventure from home, there are a few simple things we can do to reduce the stress and add to the enjoyment of our ... 05/05/2011

In this series, we're analyzing rental property operating statements to find ways to maximize our return on investment.  In Parts 1 and 2, we looked at revenue and direct expenses.  In Part 3, we're going to focus on how to control indirect expenses so that we can keep more of the revenue that we generate. Indirect expenses are regular and necessary expenses that support our rental investment activities.  They relate primarily to financing, risk management, and business support services.  In Part 2, we colored direct expenses on our example operating statement red, in Part 3 we've colored indirect expenses blue.  Let's have a look at them, one by one. 06 Auto and Travel.  Many of us own properties that require travel to manage or inspect.  We need to consider these expenses in our pre-p... 05/03/2011

The first quarter of 2011 has net seen a lot of activity of distressed properties in Palo Alto.  Here’s the update:   1.     Sold foreclosures: 1 single family home  4 condos 2.     Active and pending foreclosures: 0   1.     Sold short sales:  1 condo 2.     Active and pending short sales:  5 single family homes and 1 condo   Total Homes sold in first quarter:  156 (combined single family homes and condos)       The percentage of distressed properties in Palo Alto is still very low compared to most of the country with almost no foreclosure activity.  However, there are a few short sales, and for those willing to wait out the escrow period they can be a good deal.     If you have any questions about Palo Alto short sales or Palo Alto foreclosures, please feel free to contact me.   Feder... 05/02/2011

In Part One of this series we discussed how to analyze our rental property operating statement and improve the numbers by maximizing revenue.  In Part Two, we're going to focus on how to control direct expenses so that we can keep more of the revenue that we generate. "It takes money to make money" is certainly true in the rental property business.  Our product is a well-located, clean and structurally-sound property that has cost us money to buy, maintain and manage.  The property continues to cost us money each month, so we need to find a balance between spending the right amount to keep our property competitive and holding down expenses so that we realize a good return on investment. Direct expenses relate to marketing, leasing and maintaining our property.  Direct expenses have been... 04/25/2011

Home prices in Palo Alto have skyrocketed over the last 30-40 years.  There are many homeowners who bought in Palo Alto in the 50's and 60's for $15,000-$35,000, paid off their mortgages, and stay in their homes until they die.  In the 50's and 60's if you worked for the city you were required to live here, and many teachers, police officers, firefighters, and other city employees bought modest homes, often in south Palo Alto. Sometimes these homeowners have very little to leave their heirs other than a home worth a million dollars or more.  If you inherit one of these homes you may be faced with the prospect of inheriting a large sum of money, but do not have the ready cash on hand to pay for the expenses needed to settle the estate.  There may be bills to pay for utilities, lawyers, g... 04/24/2011

For anyone following the Palo Alto Market, especially in South Palo Alto, things are pretty crazy.  Homes are once again getting multiple offers and there are many more people trying to buy right now, than there are homes to buy.  For some buyers this can be very discouraging if not downright maddening.  Many do not understand why their wonderful offer at or above asking is not getting accepted. What does it take to "win" in one of these multiple offer situations? How much risk are you willing to take to buy a Palo Alto home? These are not easy questions to answer.  So as usual, I want to look at facts first.     Summary Of Comparable Properties Single Family Residential   Address City Beds Bath DOM LOE SqFt $/SqFt Lot(SqFt) List Price Age Sale Price   SOLD  510 Jefferson Dr   Palo Alto... 04/23/2011

Operating statements reflect the pulse of our rental properties.  How much we've earned in revenue, how much we've paid in expenses, and how much is left over to cover the overhead, pay taxes, reinvest in our property, and perhaps even keep a little for ourselves as owners.  In a series of four installments, we're going to look at the operating statement to see if we can improve the numbers and maximize the return from our rental property investment.  We'll start by looking at elements of revenue, then in two parts we'll discuss expenses, and finally we'll consider how the bottom line of the operating statement can be used in our business plan and in hold, sell and buy decisions.  I hope that you will bookmark or subscribe to this initial installment so that you'll be sure to read those... 04/18/2011

It is spring, and one of the best things about spring are the flowers. they are abundant, and relatively affordable. and, if you are selling your home in Palo Alto the best use of your money as far as putting people in a good mood and overcoming flaws. Got an old bathroom with pink or green tile, or even worse, pink and green tile. Get a vase and fill it with pink tulips. You will get more comments about the tulips than the tile.  Have vases of flowers everywhere and you will make people happy when they come into your home. That is the first step to getting them to make an offer. If you have any questions about selling a home in Palo Alto or the surrounding communities please feel free to contact me.   Marcy Moyer Keller Williams Realty www.marcymoyer.com marcy@marcymoyer.com 650-619-92... 04/16/2011

Single family homes can be great investments.  They command higher rents than condos and will increase in value better over time.  Single family homes are also easier to sell when the time comes to reposition equity.  In two previous installments, we discussed "basic" and "beyond basic" screening criteria for buying single family rental properties.  As investors in single family homes, many of us have dozens, perhaps hundreds, of homes to screen as potential investments.  We don't have time to research every house on the market, so we develop screening criteria that will us save time and money when we're ready to buy. Previously, we discussed basic property selection filters:  location, price and configuration.  We then went beyond the basics to screen the remaining properties on our li... 04/13/2011