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Volume 4, Issue 4 Nicholas French, Broker Associate, CRS

Quarterly Review
December 1, 2009

Happy Holidays
Can you believe another year has come and gone? I must say 2009 was not a disappointment:
many unexpected issues, challenges and adventures to keep me on my toes from business to
Nicholas French personal life and everything in between. I’m sure you have had many triumphs and challenges
Broker Associate, CRS
this year and during the holiday season I hope you take time to reflect on your experiences and
make a plan for 2010. The new year will bring many new challenges and successes and we can
369 S. San Antonio Road work together, learn from each other and overcome the obstacles.
Los Altos, CA 94022
The holiday season is a special time for me. Growing up we had large family functions, festive
650 773 8000 (cell) decorations, amazing aromas and yummy food. You could expect someone getting hurt on
650 247 2999 (office) Christmas day and definitely some tears from cousin quarrels. With all the craziness it is a time
of year when the family can take a break from their busy lives and come together to share sto-
650 947 3099 (fax) ries, hugs and laughter and though it is a short period the memories last for a lifetime. I hope you have special memories of your holiday season and enjoy time with your family. I also take
this time to reflect and truly appreciate my family, friends and good fortunes. We are fortu-
nate to live in such a wonderful community and I am fortunate to have such wonderful family
and friends. So many have come to my support over the past few years and I truly appreciate
it and I too am here to be supportive. It is never too early or late to call me and if I can help,
Inside this issue: even for the weirdest situations, I am here. May your family have a holiday season filled with
laughter, great conversation, decadent foods and a new year of great adventures and success.
Happy Holidays 1

Client Testimonial: Yang Family
Client Testimonial: 1
Yang Family
We consider Nick our real estate strategist, much more than a normal realtor. Nick worked
with us since 2003 in search of our perfect home for the expanded family. During the process,
Visit My Blog 1
he showed us properties in Saratoga, Cupertino, Palo Alto, Menlo Park, Los Altos, and Los Altos
Hills, and helped us to narrow down the community that fits the best to our special work and
The Roaring 20’s: Are 2 school needs. In the process, Nick demonstrated his great local knowledge and amazing pa-
We There Again? tience. After picking the town we want to live in, he guided us through the housing downturn,
and urged us to wait till the trough before pulling the trigger. When it came to the deal time,
Distressed Property 2 Nick leveraged his deep relationship with other realtors in the area, and pulled us a steal after
working closely with the seller’s agent. We moved into our new house recently, and are enjoy-
ing it greatly thanks to Nick.
The Roaring 20’s: Are 3
We There Again?

Investment Property 4 Visit My Blog for Updates
I am working at keeping my blog updated with additional articles about financing,
Share This Newsletter 4 market conditions, community information and pretty much anything else that I think
is interesting. You can find it on my website: If you have
Updated Neighborhood 4 any suggestions for an article or would like my opinion on a topic, feel free to send me
Statistics a note and I’ll get on it.

com bust and mass exodus of jobs we were experiencing interest rates around eight percent and there weren’t buyers standing in line to buy property. but let’s address some of the historical factors that I use in my under- standing of market cycles. After the dot.243 3. save. Though I was not in the business during the earlier cycles I recall quite vividly the experiences affecting my family. the only homes selling were those that were turnkey and priced aggressively. The last year has been one of opposites – the lending market has gone from loaning billions of dollars to those without any actual assets to requiring practically a family tree and blood sample before they will lend (I personally find it ridiculous to call it lending – even with the government bailout of money the banks are not lending to the consumer. we will see golden years where we feel invincible. 90’s and today. but Nick. but we want to be careful not to swing the pendulum too much one way. The house sold quickly. This was after a large run of property values and a point which I expected to see a market correction. These are both reasonable questions and of course no one has a crystal ball.415 265 Property Statistics: 2007 YTD 5. Those that lived through the depression of the 1920’s seem to have a different perspective on wealth: save. from strategy. irrespective of area. to emotions and fear—how families adjusted to this sudden evaporation of wealth.507 478 2008 YTD 10. but that is another issue and I would be glad to discuss that with anyone at their convenience). and repairs large or small. I am willing to bet that future generations will look back on us and wonder why we are now overly conservative with money (and may likely continue for the foreseeable future). Many will say. This real estate proprietor had been sitting on the sidelines for the past eight years watching the craziness of property values and patiently awaiting his opportunity. has (continued page 3) Notices of New Trustee Nov 09 Default Sales REOs SOLD Updated Distressed 2009 YTD 11. Are they fixated on saving or do they have experiences that cause them to want security? I have heard many stories of my family in San Fran- cisco during the depression. save. then a decline and we will look around wondering how this could have happened.156 2.167 150 2006 YTD 2. how do I know if we are at the bottom or I am going to keep waiting for the market to go down more. Sound familiar? Many may have experienced similar realizations over the past twenty-four months and been forced to make difficult decisions that will affect their family today and for a decade to come. It can be argued that real estate cycles date from the 1800’s during the early boom of the eastern states. or upgrade to a more desirable home. The bad news: it is human nature to have short term memory and at some point similar issues that cause peaks will run amok. investing in real estate over the past thirty years provided great insight with personal experience to previous market cycles. The point is we have swung the pendulum the opposite direction and this offers opportunity for those willing to get their hands dirty. A kid in a candy store is the best way to describe the prudent investor in the current market. but since we have discussed that in previous articles we will focus on the broader market.750 10. This significant increase was inflated from a manipulation of the market which took on a life of its own and we are now feeling it. but the unheard happened.990 6. The good news: real estate cy- cles with the peaks and troughs are not a new concept. to fence work. We sold our home in Fremont in the 1980’s and preparing the house was a family affair: from painting.034 1. your first house. so we can learn from our elder generations as well as our own experiences and make educated decisions. I would instead like to focus on real estate cycles and how we can use history to understand where we may be going.407 735 119 98 Santa Clara County . but it was turnkey and priced aggressively. The current market. I share this story because we are in a similar market today – the homes selling the quickest and for the best prices are turnkey and priced aggressively (relative to prices 12-18 months ago).518 6. The job market went from having multiple job offers in one day to employers holding back job requisitions not knowing what will come in the following quarters.Quarterly Review Page 2 The Roaring 20’s: Are We There Again? I can recall three local three real estate market cycles: 80’s. The Fed lowered the key interest rate to historical loans. One issue that became very clear during 2001/02 was the realization that government regulation and interfer- ence could manipulate the excesses of booms and busts. banks were giving out money like water and many were buying property with funny money. The best news: now is time to seriously consider buying investment property. A friend once told me he was waiting to buy real estate until there is blood in the streets. Losing significant wealth in your investments and job instability will do that. Granted the distressed market has its exceptions.

Please be diligent.87% -2. Even the County of Qtr 3 Listings Inventory Sales DOM Sales Price Sales Price Santa Clara did not understand the market change.33% -31. and inflationary concerns to name a few. If you hadn’t sold it was too late.725 370. as many variables as possible because it is very likely that prices will stay relatively the same for some time. being that prices are hovering near the bottom offering an amazing opportunity to take advantage of low prices. Please do not hesitate to contact me anytime as there will constantly be new variables in the market to analyze. south and east San Jose had stalled. interest rates and respective competition. 2) You will continue to see increases in activity because the comparison data was prior to price adjustments – let me provide more detail.602 651. inflation grows and rents rise you want to already have either your investments or upgraded home. etc.97% 63.000 Late 2008 and early 2009 began a selloff of properties as *Central San Jose Statistics banks unloaded at the adjusting prices. But if you are upgrading or buying your first home do not just run out and buy the first property you see.94% market value. The next few years are going to be a very exciting time for real estate and I will work hard to stay on top of the market trends for my clients. if you buy a house tomorrow and don’t like it next year. but that has been discussed all year and there is talk the banks may cycle through new inventory more methodically with a new strategy. Issue 4 Page 3 The Roaring 20’s: Are We There Again? (cont. It appears that our current cycle position is in the trough.96% did not adjust your taxes to your purchase price because 2008 287 332 124 98 480. newsletters. interest rates are at a ridiculous low and your competition is minimal in most cases as many people are still shell-shocked from the previous eighteen months. We are also hearing several jobless numbers from ten to eighteen percent up from the healthy four percent range.69% -13. confidence increases. unemployment.84% -24. Of course if you or your friends and family are looking to buy real estate I would work very hard to understand and obtain what it best for your family’s purchase. When you read these articles please consider a few points: 1) Sales are up but prices are down. we may be seeing some significant changes in the coming year.35% 58. From the first-time buyer incentives to capital gains exemptions. whether in our primary home or secondary properties we need to be mindful of the current climate and make sound decisions. So as investors. so as we are now one year plus after that fact we are seeing significantly lower volume of inven- tory and greater sales with the new pricing. you may be in a position forced to take a loss to move homes. Granted we may be in the trough position for several quarters or years.94% -39.000 2008. Many economists will agree that prior to a boom there is an increase in inflation. One factor through history is that following a real estate trough and prior to a real estate increase the economy experiences a period of increased inflation. if you bought a house in distress the county typically -10.49% -14. There is a great deal of cash and investors on the side looking to gain from the real estate crash in certain areas and I think that a good amount of inven- tory can be absorbed. I recall early 2008 when areas such as central. but as interest rates rise. values. followed by higher rents and higher property val- ues. my blog. but start thinking seriously about it. Be mindful of hedging what may happen in the financing world because real estate can be a powerful tool to protecting your wealth. needless to say that has been proven wrong. neighborhoods. uncertainty. Transactions were signifi- cantly down because the market had adjusted 30-40% but the banks did not have proper support or understanding of the market change so homes were on the market for over a year without mort- New Current Closed Average Average Median gages being paid or house upkeep. We don’t have to make a move tomorrow. know the market. but how? Will we inflate the dollar. There is a great deal of noise about a huge surge of inventory coming to market. We know the variables today and there are many moving parts that will play into our strategy: government incentives. find the right home and enjoy every day.261 429. Over the past few years the gov- ernment has spent more money than ever and this has to get repaid in some manner. or raise taxes – none of these answers sound good to me. . Be prudent now.16% -33. Using this data I am expecting that in the coming year we will see a flatting of inventory and prices as the market has adjusted. default on our debt. Volume 4. In 2007 322 340 78 60 697. so if homes are priced at the current market value they will sell at the market price. 2009 247 201 161 74 409. emailing. There have been many recent news articles discussing the increase in sales activity. Time will tell so stay tuned either by calling.950 they felt your purchase was distressed and not the current -13. resulting in a net income rise and increased capital to the market creating more development and competition.) adjusted from peak prices.46% 29.

720.16 1.005. family and friends.000 2.938.432 48 the membership.71 2.735 58 sistently is the Apart.782.77 915.Page 4 Nicholas French.073.500 1.100.400.074.577.08 533.69 2.676.94 1.116 56 estate questions.510 32 newsletter add value and be an Saratoga 2009 Q3 88 95. Please Saratoga 2009 Q1 21 89.88 1.000 4.94 610.372.000 625.000 703.270.83 1.467.63 1.446 103 do not hesitate to contact me if Saratoga 2008 Q3 72 96.81 1.430.000 111 scan interesting articles Los Altos Hills 2008 Q3 18 94.412.998 41 Los Altos 2009 Q3 87 96. CRS Investment Updated Neighborhood Statistics No.298.425.909 63 ment Owners Associa.255.503 60 Menlo Park 2009 Q1 50 96.000 932.0 1.75 2.441 83 Campbell 2009 Q1 32 96.237.000 1.606. of Closed % of List Median Average Avg City Year Qtr Sales Price Price Price DOM Property Tip: Campbell 2009 Q3 56 98.601.655 57 information and I will make Palo Alto 2009 Q2 114 97.044 57 I can help you with any real Sunnyvale 2009 Q3 186 98.598.017. Los Altos Hills 2009 Q3 19 92.23 2.322.000 707.000 1.864 58 Cupertino 2009 Q2 94 95.20 1.500 1.000 835.01 1.000 1.74 1. Monte Sereno 2009 Q3 12 92. If any.876 54 member and it is worth Los Altos 2009 Q1 27 93.000 707.039.718 104 information source for my cli- Saratoga 2009 Q2 64 94.52 1.000 1.056.916 67 tion News. Cupertino 2009 Q3 115 96.000 2.568.340 1.125 53 would like to receive this news.000 1. Broker Associate.37 777.410.200.180.000 1.53 1.000 1. Cupertino 2008 Q3 95 98.000 785.39 3. strategies or Sunnyvale 2009 Q2 132 97.139 92 ents.17 680.000 745.095 72 If you know someone who Menlo Park 2008 Q3 77 98.402. Please either have them Monte Sereno 2008 Q3 8 96.818 56 Palo Alto 2008 Q3 99 101.04 1.451.56 1.226.000 2.322.818 105 Monte Sereno 2009 Q2 7 95.39 1.120.500 1.000 1. Cupertino 2009 Q1 30 96.743.000 2.71 1.373.000 1.950.000 1. I am an AOA Los Altos 2009 Q2 75 94.10 1.000 1.000 1.500 1.500 1.921.045 52 Family and Friends Menlo Park 2009 Q2 102 96.40 1.385.394.060.340.24 1.877 91 Los Gatos 2009 Q2 72 95.500.627 44 contact.024 70 Sunnyvale 2009 Q1 85 97.234 102 Please Send this Los Gatos 2008 Q3 76 95.000 2.647 78 and email monthly Los Gatos 2009 Q3 77 96.700.58 1.515.115.17 1.10 1.883.121.768.41 1.500 188 them.000 1.598 75 on a monthly basis but Campbell 2008 Q3 56 97.606.221.109.325.000 1.86 1.43 875.210.265.940 47 representation .73 675.057 83 Los Gatos 2009 Q1 35 94.000 641.520 74 Newsletter to my Menlo Park 2009 Q3 77 96.47 1.140 100 Los Altos Hills 2009 Q1 5 94.000 74 contact me or provide me their Palo Alto 2009 Q3 111 96.800.000 1.505.000 1.137.500 1.805 67 Los Altos 2008 Q3 68 99.699. My goal is to have this Palo Alto 2009 Q1 50 97.96 1.000 2.57 740.287.45 775.793.688 79 one is interested I can Los Altos Hills 2009 Q2 18 95.586 86 letter I would like to send it to Monte Sereno 2009 Q1 3 95.268 50 I get several magazines Campbell 2009 Q2 78 96.000 1.307 77 if you are seeking higher quality Sunnyvale 2008 Q3 175 99.344 58 the only one I read con.