Coastal Real Estate and Lifestyles

With the possibility of a temporary raise to the conforming loan limit for markets such as the San Francisco Bay Area, there is lively discussion here in the blogosphere about how this may alter our local trends.   Here’s a look at median price graphs for the last 90 days closed sales for Half Moon Bay, El Granada, Moss Beach, Montara and Pacifica.  Ninety days is a relatively short period of time in a slower market; for more graph detail of market indicators spanning the last 360 days, including quartile markets and other cities, visit my Local Stats page.

HMB 90 day activity: 12 closed sales ranging from $645-$1,865K.

EG 90 day activity:  3 closed sales ranging from $720-$865K.

MB 90 day activity:  2 closed sales ranging from $620-$833K.

Montara 90 day activity:  4 closed sales ranging from $740-$1,845K.

Pacifica 90 day activity:  25 closed sales ranging from $449-$1,450K.

Blog mentor and friend Kevin Boer, 3 Oceans Real Estate, gives a detailed scenario of how this could change our monthly cash flow…

We decided to get some exercise between storms, with Monte (the pup) of course, around the Harbor.   Enjoyed the crisp morning with…quiet boats…other walkers, both human and canine…and a few seagulls and kite surfers…  it was fabulous.  All pics taken this morning around 8:30 a.m. on our walk.

Will the financial markets return to normal any time soon?  Remember when we said that it couldn’t be all that bad if the government wasn’t involved.  Well, that changed and they’re definitely involved now…holding a great big spoon.

The overall stimulus package includes temporary support for raising the conforming loan limit for Fannie Mae and Freddie Mac programs beyond the current $417,000 to $625,000 for higher cost areas such as the San Francisco Bay Area.  Also the Federal Housing Administration (FHA) would be able to insure loans up to $725,000 from the current $362,000 ceiling.

According to a Forbes.com article today…“‘Because the country needs this boost to the economy now, I urge the House and the Senate to enact this economic growth agreement into law as soon as possible,’ Bush said.”

I expect this could have an affect on the local real estate market in 2008 since these dramatic actions are designed to stimulate the economy back into action.  Many borrowers here rely on jumbo loans, where the median price for a single family home was $936,000 for San Mateo County in 2007.  However, I’m really not sure if it’s a well-designed plan (hmmm, I can’t believe I even wrote that) or a knee-jerk reaction fueled by political pressures.  Something needs to happen, but is reducing the Fed Funds rate by another 0.75 percentage point and increasing the conforming loan limit at the same time a good thing in the long run?  Why do I keep thinking back to 2001?

This development has caught the attention of two other local Realtors, who also share their take on this emerging topic:

1. Arn Cenedella, a Realtor with Coldwell Banker in Menlo Park highlights how much can be saved each month for a typical borrower.
2. Dave Blockhus, a Realtor with Coldwell Banker in Los Altos points to the the fact that the down-payment will still be an issue for many.

I attended the community workshop last night hosted by the City of Half Moon Bay’s Council to discuss and listen on the subject of the Beachwood lawsuit.  Very well organized except for the City’s attorney not being present to answer some key questions…not good.  In addition to the City Council, the lead counsel from Orrick, Herrington and Mark Kern from Piper Jaffray spoke.  The purpose of the event was to provide an update and to listen to the public’s questions, comments and concerns.  The key points I came away with:

• The City reassures the appeal process will have no adverse affect on the City’s day-to-day operations.
• The claim is against the City government, not individual homeowners, businesses or citizens.  Therefore, no lien or cloud on individual property owner’s title will appear as a result of this judgment.
• The City expects the resolution to take 18 months to 2 years.  There were two camps in the audience - those that wanted the City to settle as quickly as possible so that we can move on; and those who wanted the City to appeal.
• Filing a Chapter 9 bankruptcy has not even been discussed as an option at this point.  Currently, there are so many other ideas and thoughts in process that this is not currently a serious consideration.  We were told that it is much more difficult to dissolve a government agency than a business.
• If the City loses the appeal and a bond measure is proposed, it would require two-thirds voter approval.
• Half Moon Bay is a general law city not a charter.
• All the legal documents can be viewed without registration thanks to Darin Boville who produces montarafog.com.
• The City is working on a dedicated website to provide accurate and timely information, documents, etc.  That is in process.

Lastly, my own thoughts…This council did not create the problem but they are our current leadership and must deal with it.  I believe they mean it when they say they value the community’s support and ideas.  Last night showed that they really want to listen to constructive ideas and suggestions and a few were given that they said they would be looking into.  There is a fear that property values will be affected.  There is no indication of this other than the power of negative perception.  People are going to still buy and sell real estate.

I hope the City develops its tools to communicate directly with us via meetings, town forums such as last night, website updates, video recordings, etc.  Things spin out of control when our minds are left to wander to the dark side unchecked, unfiltered…  I expect good things moving forward.  I guess I’m an optimist.  The City is in a position to gain newfound respect by meeting this challenge head on and taking the high road.

During the 19 years that I’ve lived in El Granada, Pillar Point Harbor and the Princeton area has grown along with the rest of the coastside.  Coastal Lifestyles Health & Fitness Center moved in…The HMB Brewing Co. moved in…Mezza Luna moved in…Mavericks was “discovered”…  All these events have been adding height - and weight - to Princeton for many years.  It’s latest notch on the yardstick is the new Oceano Hotel and Harbor Village.  The Hotel is now open and Harbor Village is now scheduled to open April 1, 2008.

As I’m waiting for my friend near Cafe Classique yesterday morning, I decided to take a photo of the long-awaited development across the street.  We grab a corner table on the sun-drenched patio to catch up with a warm cup of coffee and homemade cinnamon rolls (half each of course - and to die for!).  Totally worth it but Must-Walk-Off.  Neither of us had been through Harbor Village so we decided to stroll over there to see what’s up.  We stumbled upon Christian Diggs, the Harbor Village Leasing Consultant, who was so gracious to show us around in spite of his busy day.

This place is going to be stunning.  I’m well aware of the mixed feelings of many locals; however, after my visit yesterday I’m pleasantly surprised and believe it will be an asset to our community.  It’s like its own little resort village with luxury hotel, a spa that will be run by Aveda, banquet room, workout room with enormous skylights flooding the room with natural light, richly appointed conference rooms, comfortable residence suites offering a 2 bedroom and 2 bathroom home-away-from-home or loft apartment.  There will also be a restaurant, shops & boutiques including a golf shop, a deli, a kitchen shop, a surf-wear/resort-style boutique, and a few yet still in negotiations….  Also planned is a wedding garden, and future tennis courts.

So with the roar of high-gear construction going on in the background, Christian pointed out some of the fabulous details that made me wish I was part of the extended KN family!  There are too many to mention, but one that stood out in my mind was the zippered bed topper which is laundered after each guest.

This development has the luxury of the Ritz but with a more “casually elegant” feel.  I really hope that tapping into the well known local talent is part of the long term marketing plan.  Development is always a mixed blessing - especially in a community like the Coastside and in my own backyard (well, my front yard)… Sure, traffic will increase, but so will jobs and revenues…and, I suspect, home values.  Here are a few photos from my tour with Christian yesterday.  When I have more time, I’ll try to post a few more on a separate photos page.

Additional articles in recent months:

A Grand Opening, 30 years in waiting, Oakland Tribune, 8/29/07

Harbor Village prepares for October opening, HMB Review, 9/5/07

Inside Coastal Real Estate & Lifestyles’ “Coastside” page:  Fun Visitor Resources

I was showing property the other day to a client.  The Listing Agent said to go directly to the property; this was our second viewing of this home.  No one was home the first time, as showings usually go.  I always knock first, so I did…no answer.  But when I turned the lock and opened the door, a man’s voice said “Excuse me?!”  He was flaunting his birthday suit from the waist up and was obviously not expecting guests, especially a prospective buyer!  As we tried to focus on the light, layout, room size, views from the windows, etc., etc., he picked up clothes, socks, and whatever else was there that I chose not to peek at.  He was cooking chile verde.  I was tempted to ask for the recipe but refrained.  A friend came over and they carried on a conversation.  My client and I tried desperately to stay focused.

Finally we asked him what he liked best about the house and what he would change if he were staying.  He said the neighborhood was the best; he had plans to change the kitchen and proceeded to tell us in detail what his ideas were… life happens… mom and dad needed to move in, but mom and dad are not there now.  The kitchen never got done; he said his wife painted over the kitchen wallpaper one night to add some color to the room.  It was a bright crimson.  There was a cut-out in the ceiling of a hallway for the kids to have a “playhouse” in the vaulted part of the ceiling that was covered over.  Half of the garage was made into an office; no heat.  Thankfully he kept the huge german shepherd in the garage, but we met his large nose through the door…  Onward.

My friend and colleague Arn Cenedella of CB Menlo Park shares a (fictional) story about a buyer outing that inspired my true one here.  Check it out; if I could create a story like Arn’s in the 5 minutes I know it took him to write this, I would!  New friend and blogger Jill Heers of ERA Oceanside has a great buyer story also.  Another killer sense of humor that I hope to get to know better!!

If you’ve got a story to share, please let me know.  We can all use a little more humor these days, can’t we?

Rates have taken center stage in the real estate buying and selling process for the last 6 months…and I don’t think it’s going to end any time soon.  A complex issue such as this that involves several facets of the financial markets will certainly take some time to sort out - all while there are folks out there who need to be buying and selling their properties. 

Countrywide was the darling of home purchase lending in the early 2000’s.  I know many people who have used Countrywide.  Unfortunately their business plan did not allow for a timely market correction.  If anyone should have been watching the markets from the investor perspective it would be Countrywide’s execs; otherwise they wouldn’t be in this mess.  When the market shifts new opportunities are created…

“There are near-term challenges, but where there are challenges, there are always opportunities,'’ Lewis said during a conference call today. “We view this as a one-time opportunity.'’

It seemed likely a buyout would happen when Bank of America loaned Countrywide $2 Billion a few months ago.  Now that it has happened, will it change the face of local real estate?

The positive is that changes are happening in the lending industry to stabilize things - and that is a very good and much needed process to happen - quickly!  Is there a negative to this move for consumers?  I guess I would be reading my mail much more carefully if I had a Countrywide loan.  On a more micro level, it probably won’t change much because we have always had B of A products available through our local reps, such as Bob Zimmer of Bank of America and through Mortgage Broker, Susan O’Driscoll of Princeton Capital.  But B of A’s primary business is not mortgage lending, it is banking.  Are they continuing to move the chess pieces toward an entire business model shift?  How will this affect another solid giant, Wells Fargo?  Ask Bill Griffis, our local WF rep yourself…

The specifics that HAVE changed here - and elsewere - is lending criteria.  “…Mortgages to people with weak credit contributed to a surge in defaults last year…”  also from the Bloomberg.com article.  More on CREDIT in my current Hot Topic article. 

For consumers about to talk with a Mortgage Broker or direct lender:

• Know how long you plan to be in the property you are purchasing
• Have at least a quick idea of your credit scenario before meeting with a lending professional
• Do NOT be afraid to ask questions and get a satisfactory answer
• It’s okay to talk with more than one mortgage professional and interview until you feel comfortable
• Know that there are good loan products out there and people are still buying and selling homes

A day in Half Moon Bay doesn’t get any better…well, except when we have this weather with less people :)  Everybody was out enjoying the weather and local vibe!

Thursday night…Mavericks contest announced.  Friday morning…call from my college student daughter saying “we’re coming home and we’ll there later today.  Yes, that was “we”.  OK, how many?? 3 more kids - easy.  Friday afternoon…call from same child “we’re not going to make it because of a party being planned for her 19th birthday Saturday night.  Later Friday afternoon…call from, guess who, “we’re coming home after all!” 3 kids from Oregon who have never seen Mavericks, one of them does extreme sports himself, and of course, my “other” children, said daughter’s friends.  OK, this will be a really busy and fun weekend!

They all arrive Friday night we find every spare sleeping bag, blanket and pillow we can;  I think heads to pillows was late but were very quiet (this group can come back!).  Parents get up at 6:30 to start a breakfast for 7 or 8 college kids (i.e. tons of food).  We send them off with full stomachs and bottles of water.  We’re close enough to Mavericks that they walked.

After putting the house back together (the kids were actually quite neat) we headed to the bluffs ourselves to take a walk and catch a glimpse of waves if we could.  We certainly were not alone but it wasn’t too bad and the views were spectacular!!  After two more walks that day just to be outside, and of course to keep the pup happy, I was completely energized and relaxed.  (I must admit that my new bodywork regime from rehab/massage professional extraordinaire, Scott King of StudioEight-18 in Moss Beach has been paying off since the lower calf injury several months ago!)

I did not get to the ceremonies because I had work to do - contract negotiations (always a good thing), and open house prep.  I don’t even care who won…to me they are all winners to be able to so beautifully work in harmony with mother nature.  She is not to be messed with as we have learned…

Drain, drain, drain
Drain, drain, drain
Drain, drain, drain
Drain of Funds.

For ten long years,
I stashed cash and got vain
But as I found out, It was funds down the drain.

Drain, drain, drain
Drain, drain, drain
Drain, drain, drain
Drain of Funds.

Oh, I thought I was so clever
But I was financially slow.
Weak stocks and inflation never
Helped my net worth to grow.

Drain, drain, drain
Drain, drain, drain
Drain, drain, drain
Drain of Funds.

Every drain,
has got a bad enabler
But real estate investment
Makes my portfolio stabler.

Drain, drain, drain
Drain, drain, drain
Drain, drain, drain
Drain of Funds.

Mutual funds and money markets,
T-bills and muni bonds,
Can’t beat deeds and equity
And the cash flow I’m so fond
Of…

Drain, drain, drain
Drain, drain, drain
Drain, drain, drain
Drain of Funds.

Now that I’ve grown wiser
The drain has surely ended.
And I’m so much more assured
That my retirement is funded…

Drain, drain, drain
Drain, drain, drain
Drain, drain, drain
Drain of Funds…

Oh!

This is also a special dedication to my dancing and singing buddies who recently played this song and got my brain going in this direction…

My apologies to Ms. Aretha Franklin. 
Photo compliments of Vh1.com.

I have been asked by family and friends how the current judgment against the City of Half Moon Bay in favor of “over the hill” developer Charles Keenan might affect local home values.  The judgement itself and the future outcome of the appeal or any negotiations leaves the home value predictions as foggy as our weather can sometimes get.

As soon as the judgment was released I tried to reach the Mayor to get first hand facts.   Understandably she’s got a full plate right now, but I had to try.  Fortunately, the City just released a Press Release yesterday, January 3, 2008.  The Press Release letter addresses a summary of key points, such as confirmation that they are appealing, and announcement of a community meeting on Tuesday, January 22, 2008 at the Ted Adcock Community Center.  This directly from her letter:

“…We are committed to keeping you apprised of important developments, primarily at our regular City Council meetings.  A workshop is scheduled for 7 PM on January 22, 2008 at the Community Center for the purposes of providing information, answering questions on the case, and listening to suggestions and opinions from the community.”

Here is the Link to the entire “Press Release 01/03/08″ directly from the City of Half Moon Bay’s website.  This link can be accessed any time from my website’s Home Page under the Category “Living in Half Moon Bay - City of Half Moon Bay.

Here is a Google map showing the location of the Beachwood property and the location of the upcoming meeting:
View Larger Map