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Brad Gill's Blog

By Bradley Gill | Broker in 95120
  • Housing in Recovery? Or Housing Bubble? - Spring 2013 Silicon Valley Housing Market Outlook

    Posted Under: Market Conditions in Santa Clara County, Home Buying in Santa Clara County, Home Selling in Santa Clara County  |  April 10, 2013 10:33 AM  |  1,761 views  |  No comments

    There's a lot of growing speculation among first time homebuyers that we may be experiencing another "housing bubble," but if we are, it surely won't be of proportion to that seen in 2006. In the not too distant past there was a time when anyone with a pulse could qualify for a home mortgage, purchase financing was available to those with little to no income or down payments, and all premised on the buyer making interest only payments with an adjustable interest rate. No wonder the housing market crashed in 2007...there was no sustainable gain being made.

    Now let's look at today's market...Today's engine in the housing recovery is being driven by buyers purchasing with fixed financing options, large down payments, and fully underwitten loan applications. Housing rents are increasing and home affordability hasn't been this high for a long time...so why wouldn't we expect a run on housing?

    Welcome to the housing recovery...going strong since Spring of 2012. The current levels of appreciation seem very sustainable for the short term, especially given the continual scarce inventory available for sale, the current increased housing affordability and the incredibly low mortgage interest rates. And as long as housing affordability remains at it's current levels, and potential homebuyers will prefer to own rather then rent, I don't think we're going to see a slow down.

    This is especially true of Silicon Valley. Not only is our inventory naturally limited due to the geography of the South Bay Area, creating a natural imbalance between supply and demand to begin with, but there is scarce new lands available for any major new housing developments. Sure we have some small scale infill developments scattered throughout the valley, which are seeing unprecedented interest as new releases are selling out in hours rather than weeks, but our inventory for the most part is dependent on the resale of existing homes which is currently around 50% of normal inventory levels.

    So let's look at the major contributing factors that have led to our quick housing recovery. Outside of the governments interactions in our housing market that has shrunk inventory levels, the freezing of foreclosures last year and appearance of large investors purchasing pools of foreclosed homes directly from banks, there were many strong economic gains made as well. Did you know that there were 42,000 new jobs created in SIlicon Valley in 2012 alone? And according to the Index of Silicon Valley for 2012 (published by Joint Venture Silicon Valley) it seems that our innovative "tech-giants" are just getting started as there was a drastic rise in the amount of venture capital seed money available last year, an increase in patent registrations, and of course, release of new IPO's (Facebook for example).

    So, with the already limited supply of inventory and continued increase in qualified buyers entering the housing market, what may be considered to be "overbidding" on a home today could be seen as "a deal" in another few months. Compared to last summer, the "overbidding" in San Jose was close to 2-3% over asking price, while today we're seeing close between 10-15% or more...

    My two-cents...If it makes financial sense for a prospective homebuyer to own versus renting, considering their monthly housing payments and out of pocket expenses, and the purchase will be for long-term holding, then what difference does it make in the long run if they paid an extra $10k, $20k, or more out of pocket...the same opportunities today are not guaranteed to be around tomorrow. I know that I'd personally rather lock in a housing payment for 30 years at a very low rate versus leaving myself open to the ever fluctuating rental market. And if it meant putting more down from savings, again what's the difference if my savings account is earning 0% anyways?

  • Calling All Buyers; REALTOR’S Nationwide Open House Weekend this Saturday & Sunday (June 4th & 5th)

    Posted Under: General Area in Santa Clara County, Market Conditions in Santa Clara County, Home Buying in Santa Clara County  |  June 1, 2011 4:16 PM  |  3,017 views  |  No comments

    You may notice a dramatic increase in the number of open house signs propped up on street corners across your city this weekend…don’t panic, our housing supply didn’t double since last weekend…it’s time for the National Association of REALTOR’S (NAR) nationwide Open House weekend campaign.


    June 4th and June 5th


    NAR’s intent is to motivate both Realtors and their clients into hosting an open house on this Saturday, Sunday or even both days, in an effort to “focus attention on the benefits of home ownership to families, communities and the economy.” It is estimated that over 250 local REALTOR associations across the country, with members representing tens of thousands of homes, will be participating in the event.


    Participating Realtor members will be armed with recent housing news, statistics and market trends hoping to shed light on the incredible opportunity that today’s housing market provides…just last week the National Association of Home Builders reported that home affordability reached its highest level in 20 years, and mortgage surveyor Freddie Mac reported that for the sixth straight week fixed-rate mortgages inched down, reaching new lows for 2011.

    What does this mean to homebuyers?


    Grab your open house list, your property feature checklists, your neighborhood comparison checklists, and your Realtor interview questions…because if you’ve been considering whether or not to make a home purchase, this weekend will make for a great opportunity to see many different homes in all of your favorite neighborhoods…and if you’re not currently working with Realtor, you’ll also have a great opportunity to get to know a few.


    Enjoy your weekend and happy house hunting!


    Open House Lists for Santa Clara County


     View all upcoming open houses in the following areas of Santa Clara County:

    Alum Rock & Berryessa

    Los Gatos & Monte Sereno

    Almaden Valley


    Blossom Valley

    Morgan Hill, Gilroy & San Martin

    Cambrian Park

    Santa Clara


    Santa Teresa & So. San Jose

    Central San Jose




    Evergreen & Silver Creek

    Willow Glen

  • Top Reasons for Buyers to Hire a Real Estate Professional

    Posted Under: General Area in San Jose, Home Buying in San Jose, Property Q&A in San Jose  |  May 17, 2011 4:51 PM  |  3,004 views  |  No comments

    Home sellers who used a real estate agent are 50% more successful at getting their homes sold than unrepresented sellers, according to researchers at HomeGain.com.


    But did you know that buyers who use a real estate agent are also more likely to have a successful transaction?


    Here are the top reasons that homebuyers should choose to work with a qualified real estate professional, preferably a REALTOR®.


    Getting a purchase closed in today’s market is complex and filled with buyer traps.

    Buyers face many more hurdles including stricter financing and a confusing marketplace of listed homes, fore-sale-by-owner homes, foreclosures and short sales. Your area may be in a buyer’s market with lots of inventory available and falling prices, but the home you want may be in a price range or neighborhood that’s in a seller’s market.


    A professional is more likely to help you close on the home of your dreams.

    To take advantage of today’s near-record low interest rates, attractive inventory levels, and prices rolled back more than a decade, you need a sales professional to help you close the deal. A good real estate professional understands the current market. He or she has house-by-house neighborhood experience and help you obtain the right house at the best price and terms.


    Real Estate Agents will navigate you through the home buying process.

    Once you find the house you want, the work really begins. You’ll need help navigating negotiations, loan approval, seller’s disclosures, inspections, repairs, and much more. Your agent will share your risk, and will make sure you go into any home purchase with your eyes wide open.


    Best of all, real estate professionals work primarily on commission.

    In most instances it won’t cost you anything to hire a professional to assist you with your real estate purchase. In fact, your real estate agent is paid a commission from the sales proceeds of the home, which comes from the seller’s pocket. And since your agent won’t be earning any income until they have found your dream home, they will be motivated to assist you with all aspects of your purchase transaction.


    But, it also means that if the deal of the century is about to come on the market, who do you think your agent will tell?  The buyer who thinks he’ll get a better deal by working every agent, or the buyer who is loyal?  


    It’s common courtesy to work with only one agent per area that you are looking; and if it’s customary in that area, don’t be reluctant to sign a buyer’s representation agreement with your agent once you have chosen the right agent to represent you in your transaction.


    A buyer representation agreement (which is always an option) will help spell out the specific duties that your buyer’s agent will perform, meaning you will receive a higher level of service since the buyer’s agent has a formal commitment that you will utilize their services should you purchase a home in their market area. Just be sure to discuss the agreement at length so you and your agent have a clear understanding on expectations…and most agreements allow for the termination of the contract should you become unsatisfied with your chosen agent’s performance.


    And lastly, be sure to stay in contact with your agent. If you want to look at open houses or builder homes, invite your agent to come along. If they happen to not be available, show your loyalty by telling the salespeople you meet that you are already represented.


    Take advantage of the greatest home-buying resource available – your neighborhood Realtor®.

  • Top Realities San Jose Home Sellers Face in Today's Market

    Posted Under: Market Conditions in San Jose, Home Selling in San Jose, In My Neighborhood in San Jose  |  May 4, 2011 7:02 PM  |  2,894 views  |  1 comment

    For Sale by Eagle Properties GroupHome sales have generally stabilized since the crash in 2008, but home prices are still “up in the air” in many neighborhoods across Santa Clara County. Although foreclosures have diminished, short sales continue to make up a large portion of just about every community’s housing market. So with all the uncertainty, how can today’s sellers who are not facing a distressed sale stand out in their local real estate marketplace?


    Here are some realities that any traditional seller who is thinking about putting their home on the market should consider before listing their homes in our current market:

    Reality – It will cost you dearly to “chase the market”

    Unfortunately, unless you live in the best school districts within Cupertino, buyers are still in control of most markets in Santa Clara County. Added all the national media doom and gloom (talks of “double dip” recession) makes most buyers feel that they are entitled to get a “steal” if the buy right now.


    Food for thought - In the past year, about 25 percent of sellers (up from 22% the year before) who initially listed their homes too high ended up having to reduce the price, according to Trulia.com.


    So when you’re preparing to list your home, price your home competitively out of the gate. Be sure to discus the market activity in your neighborhood carefully with your Realtor and avoid being tempted to list above fair market value, even if you’re just “testing the water,” as it will surely cost you more over the long-run.


    Reality – Buyers won’t pay more for Your house because it has "retro-tiled" bathrooms

    Since home price appreciation is certainly under popular speculation, unless your home has some serious upgrades and advantages over recent sales, be prepared to list at or below your best comparable properties. And with news coming from the National Association of Realtors® (NAR) that the median home price (nationally) fell 5% between February 2010 and February 2011, most buyers will be expecting a discount over previous recent sales unless you can prove why they should pay more.


    So, before you rush your home to market, be sure to carefully examine the recent sales activity ion your neighborhood as well as the competition you will be selling against. When it comes down to it, a buyer will choose the best home offered at the best price, so be sure your Realtor walks you through your competition.

    Reality - Consider frequent price reductions

    During the first 30 days your home is listed on the market it will get the most attention and showings (new listings generate the most buyer traffic), so if you haven’t received any offers during this time then you may want to consider a price reduction. Try putting yourself in the buyer’s shoes for a moment…if a property has been sitting on the market for an extended period of time, wouldn’t you start thinking it must be listed too high, or have some defects?


    In order to avoid creating any negative stigmas about your property you should consider making a price reduction plan upfront with your listing agent. Sometimes making a price cut can be extra motivation for buyers to take a second look or attract a new pool of potential buyers seeking a lower price range.

    Reality – When you’re selling your home, it’s no longer “your home”

    According to a recent NAR article, with the increased level of housing inventory available, more buyers prefer homes that are in move-in ready condition. So if a buyer can’t imagine himself moving into your home the next day, chances are you won’t get top dollar.


    So how do you prepare properly? Think “curb appeal, cleanliness and staging…” as these are all key areas that buyers tune into immediately, and considering how first impressions last, if your home is not top shape some buyers may be more likely to turn up their noses. Take extra effort to keep the house in its best shape and be sure to remove clutter and personal accents (like your grandmothers spoon collection hanging in the kitchen, or the life-sized family portrait above the fireplace)…every buyer who walks through the front door needs to be able to imagine that your home is their “new home.”


    Work with your listing agent on a plan to prepare your home for sale and discuss the costs and expenses of staging your home. More real estate brokers agree these days that proper staging can actually speed up a sale and increase the final sales price, so be sure to discuss the costs and benefits of hiring a staging professional who can make your home look like it’s ripped from a catalog.


    Reality – If buyers can’t see your home they won’t buy it!

    You need signs, flyers, open houses, internet presence, and if you’re still occupying the home, you need to be flexible. Think traffic…the more the better!


    Your goal, along with the goal of your agent, is to get the home in front of as many possible buyers as possible. Considering that 87% of buyers (and rising) start their home search on the internet, you should ensure that your Realtor can help you come up with a solid marketing plan (including maximizing internet exposure) that will bring the most traffic to your home.


    Just make sure that when buyers show up to see the home, they are able to see it!  One of the most frustrating aspects that buyers face when conducting their property searches is trying to schedule showing appointments…the more flexible you can be the better chances the right buyer will come through your home soon after it is listed.


    Also, think mobile technology – we’re living in an age of instant gratification…if a buyer wants information on your home, they need to receive it quickly or they may lose interest, meaning you lost a potential buyer.

    Reality – Buyers will try to purchase your home for the least amount possible

    Once your home has been listed for sale your top goal, along with your Realtor, is to generate offers...the more the better! This may mean that an interested buyer may try to make a low-ball offer if they know there haven’t been any previous offers, just keep in mind that you don’t have to accept their offer and you always have the ability to negotiate terms.


    However, if a buyer is willing to write an offer then they’re also willing to negotiate… that’s when sellers need to try to set aside feelings of anger or insult and concentrate on the negotiation of terms.  And, using incentives, such as agreeing to leave certain appliances or pay for repair work, may get buyers to budge in agreeing to a higher price.


    Reality – Buyers today are not in a hurry to buy!

    Given today’s low mortgage rates combined with low home prices and high inventory levels, buyers today are surely not in a rush unless they have some personal reasons for purchasing. But, as more realities of the current housing market are relayed to potential buyers, the more likely they will get “off the fence” and purchase, especially since the cost of home ownership increases as interest rates rise, even with falling home prices!

  • Santa Clara Ranked One of Healthiest Counties in CA, for 2nd Year

    Posted Under: General Area in San Jose, Quality of Life in San Jose, Parks & Recreation in San Jose  |  April 19, 2011 3:17 PM  |  1,085 views  |  No comments

    (March 30, 2011) It seems that Santa Clara County residents have something new to boast about…our health. I guess all the sunshine and beautiful scenery has helped our residents stay healthy, and the health care options available to our residents aren’t bad either.


    According to the 2011 County Health Rankings, the most comprehensive report of its kind to rank the overall health of nearly every county in all 50 states, Santa Clara County ranked high on overall health— 4 out of 56 —compared to all counties that were ranked in the state.


    This is the second year of the County Health Rankings, a study performed by the University of Wisconsin Population Health Institute and the Robert Wood Johnson Foundation. The Rankings, in which a standard measure is used to determine how healthy people are and how long they live, helps counties see where they are doing well and where they are not so they can make changes to improve the overall health of their residents.


    According to the report, a number of factors were used in determining the differences in overall health of a community. These factors ranged from individual behavior to access to health care to education and jobs to food access to air quality. Since these factors can be influenced by public policy and community-based programs, the report provides community leaders with valuable information to assist them in making decisions and changes that will improve the community’s health.


    In short, the results of the survey help local government understand what they are doing well and where they can improve in order to help residents lead healthier lives. And looking at the results from the latest survey, the high rankings received by Santa Clara County, further affirms that the public policies offered through our county are working…such policies as reducing exposure to second-hand smoke, supporting public transportation, and providing the renowned Valley Medical Center and Valley Health Clinics.


    So spread the news and let everyone know how lucky they are to live in not only one of the most beautiful places in CA, but also one of the healthiest.


    For more information about this report visit their website - www.countyhealthrankings.org

  • Important new laws affecting real estate in 2011

    Posted Under: Home Buying in San Jose, Home Selling in San Jose, Foreclosure in San Jose  |  March 14, 2011 4:30 PM  |  1,237 views  |  1 comment

    There are many new laws recently passed that have gone or will be going into effect this year. These laws vary as to their impact on the real estate industry, from stopping lenders from seeking deficiency judgments after short sales to requiring an operational carbon monoxide detector in each home at time of sale, so to help you get a quick feel for these important new laws here is a quick summary:



    No Short Sale Deficiencies Allowed for 1st Trust Deed Holders


    Probably the most exciting law effective this year requires that a seller's first trust deed lender cannot obtain a deficiency judgment against the seller after a short sale. 


    Starting January 1, 2011, providing written consent to a short sale shall obligate the first trust deed lender to accept the sales proceeds as full payment and discharge of the remaining amount owed on the loan.  This law applies to first trust deeds secured by one-to-four residential units, but if the owner commits either fraud with respect to the short sale, or waste with respect to the secured real property, then the lender may seek damages and use existing rights and remedies against the owner or any third party for fraud or waste.


    Note that this law doesn't apply if the trustor or mortgagor is a corporation or political sudivision of the state, and junior lien holders are not subject to this law.



    New tax filing requirements for property managers and landlords


    Starting Jan. 1, 2011, any person who receives rental income must provide a Form 1099 for all payments of $600 or more made to service providers such as plumbers, carpenters, yard services and repair people. As part of the recently passed Small Business legislation (HR 5297), this new revenue provision will create additional burdens for anyone who receives rental income from either residential or commercial property.


    Basically, ANY person who receives rental income (no longer limited to property managers) will be required to report all expenditures of more than $600 to anyone (or to any business) from whom they purchased services. Thus, “mom and pop” investors and those who invest in real estate for their personal portfolios are now subject to the new reporting requirement. But, only aggregate annual payments of $600 or more for services (but not goods) will be required to be reported.


    This means that if you own investment property and are renting it out without the help of a licensed property manager, then for any services purchased for the maintenance of the property (such as services provided by plumbers, carpenters, yard or garden workers, electricians or any other service providers), you will be required to file an IRS Form 1099 any time the total expenditures/payments to a particular vendor in one year exceed $600.

    For more information please see the IRS website: http://www.irs.gov/



    The Carbon Monoxide Poisoning Prevention Act of 2010


    By July 1, 2011 every owner of a “dwelling unit intended for human occupancy” must install an approved carbon monoxide device in each existing dwelling unit having a fossil fuel burning heater or appliance, fireplace, or an attached garage. Regarding rental properties, the law gives a landlord authority to enter the dwelling unit for the purpose of installing, repairing, testing, and maintaining carbon monoxide devices “pursuant to the authority and requirements of Section 1954 of the Civil Code [entry by landlord].” And a carbon monoxide device must be operable at the time that a tenant or buyer takes possession of the property. 


    Under the law, a carbon monoxide device is “designed to detect carbon monoxide and produce a distinct audible alarm.”  It can be battery powered, a plug-in device with battery backup, or a device installed as recommended by Standard 720 of the National Fire Protection Association that is either wired into the alternating current power line of the dwelling unit with a secondary battery backup or connected to a system via a panel.

    This new law requires the owner to install the devices in a manner consistent with building standards applicable to new construction for the relevant type of occupancy or with the manufacturer’s instructions, if it is technically feasible to do so. CA State specific building code states that a device shall be “installed outside of each separate sleeping area in the immediate vicinity of the bedroom(s) in dwelling units and on every level including basements within which fuel-fired appliances are installed and in dwelling units that have attached garages.”



    Energy Audit in Home Inspection Report


    In California, new homes must be built to comply with the latest Building Energy Efficiency Standards (Standards) and since a majority of our existing homes were built before the first Standards were established in 1978 with limited energy efficiency measures, beginning January 1, 2011, a new state law requires the home seller or broker to inform the buyer about the existence of California Home Energy Rating Program by delivering a Home Energy Rating System (HERS) booklet.


    Recently released by the California Energy Commission, the booklet is designed to educate homeowners, home buyers, and home sellers about Whole-House Home Energy Rating services and their benefits, opportunity to invest in energy efficiency improvements at the time-of-sale, and available financing options. Additionally, a home inspection and inspection report may, upon a client's request, include an audit of the energy efficiency of a home, according to the standards of the Home Energy Rating Systems (HERS). 


    More can be found at http://www.energy.ca.gov/HERS/index.html



    Lead-Based Paint Renovation Rule


    The Lead-Based Paint Renovation Rule (Lead Renovation Rule), which implements the Toxic Substances Control Act (TSCA found at15 U.S.C. 2601 et seq.), is a rule affecting construction contractors, residential landlords, property managers and others who perform renovation for compensation in housing that may contain lead-based paint--housing built before 1978.  Renovation includes most repair, remodeling and maintenance activities that disturb painted surfaces.

    No more than 60 days prior to commencing the renovation, renovators must give to the owner or occupant of the dwelling the EPA pamphlet, "Renovate Right: Important Lead Hazard Information for Families, Child Care Providers and Schools," found at http://www.epa.gov/lead/pubs/renovaterightbrochure.pdf.  The renovator must obtain written acknowledgment that the owner or occupant has received the pamphlet


    The rule also establishes requirements for training renovators, other renovation workers, and dust sampling technicians; for certifying renovators (and others); for accrediting providers of renovation training; for renovation work practices; and for recordkeeping.


    The term renovation includes (but is not limited to): the removal, modification or repair of painted surfaces or painted components--such as sanding or scraping doors, window frames, walls, ceilings, etc. 


    The term "renovation: does not include minor repair and maintenance activities.  Minor repair and maintenance activities include minor heating, ventilation or air conditioning work, electrical work, and plumbing, that disrupt 6 square feet or less of painted surface per room for interior activities or 20 square feet or less of painted surface for exterior activities where none of the work practices prohibited or restricted by Section 745.85(a)(3) are used and where the work does not involve window replacement or demolition of painted surface areas.


    For additional information, go to EPA Web page on Renovation, Repair and Painting (RRP) at http://www.epa.gov/lead/pubs/renovation.htm. 

  • Keep Your Home California, New Mortgage Assistance Offered to Struggling Homeowners

    Posted Under: Financing in San Jose, Foreclosure in San Jose  |  January 21, 2011 10:36 AM  |  845 views  |  No comments

    Last week, on January 10, 2011, the State of California launched the “Keep Your Home California” campaign with the rollout of the Unemployment Mortgage Assistance Program (UMA). The UMA program is expected to assist as many as 60,000 eligible homeowners by providing a mortgage payment subsidy of up to $3,000 for a maximum of six months.


    Eligible unemployed homeowners facing imminent foreclosure should call for the chance to apply for the state funded mortgage assistance program. Phone lines are now open 888-954-KEEP (5337) and the agency has already received over 1200 calls over the first two days.


    Supported by $2 billion in recent federal funding by the US Treasury, Keep Your Home California is a compilation of four unique programs that will become available over the next few months to eligible California families who are struggling to pay their mortgages.


    The campaign is designed to address different aspects of the current housing crisis by offering the following programs:

    1. Unemployment Mortgage Assistance Program (UMA) – up to $3,000 a month in mortgage payments for up to six months for mortgagors actively collecting unemployment benefits.
    2. Mortgage Reinstatement Assistance Program (MRAP) – up to $15,000 for reinstatement of arrearages.
    3. Principal Reduction Program (PRP) – up to $50,000 contribution toward principal balance reduction.
    4. Transition Assistance Program (TAP) – up to $5,000 in transition assistance for short sales and deeds-in-lieu of foreclosure.

    The programs are designed to assist those homeowners who have experienced a change in household circumstance such as death, illness or disability, or are subject to a recent or upcoming increase in their monthly mortgage payment and are at risk of default because of this economic hardship when coupled with a severe decline in their home's value.

    But these programs are only available to homeowners whose mortgage servicing company agrees to the terms and conditions governing the use of these funds. So far participating lenders, loan servicers and agencies include Wells Fargo, Chase, Bank of America, GMAC, CalHFA, and the Department of Veterans Affairs, as well as the government-sponsored Fannie Mae and Freddie Mac.

    If your servicer is not currently participating in Keep Your Home California, you may want to call them and encourage them to do so. For more information and the most recent list of services participating please visit: http://www.keepyourhomecalifornia.org/

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