Sunday, March 15, 2020

Q1 2020 Real Estate Review - Coronavirus and Real Estate

At first glance, the Coronavirus and Real Estate have very little in common. The coronavirus is an un-precedented global health pandemic with the situation seemingly escalating by the week locally and globally. First and foremost, please keep you and your families safe. In the long run, we as a society will overcome this, however in the short run this will not only disrupt our lives, but the situation will also have a major impact to all parts or our local, domestic and global economies. Of the most concern, is how quickly things have changed literally in the last 2 weeks. The stock market has lost over 20%, throwing our bull market into a bear market. Workplaces have mostly asked employees to work from home, schools have been canceled anywhere from 2 to 4 weeks, mass gatherings have been almost eliminated and we are on the brink of a lock down.

The Market Prior to March 2020

Prior to March of 2020, the real estate market told a different tale. Closing out 2019, the Federal Reserve cut interests rates for the 3rd time. This rate adjustment got Buyers who were in discount mode, out in droves as they fought for seasonally low winter inventory. This momentum carried into the spring of 2020 as Sellers once again had multiple offers and some areas were close to wiping out their losses during the real estate market correction of 2018 to 2019. Inventory continued to be low and bidding wars continued for the months of January and February.

The March Avalanche

In the first week of March, the first indications of the coronavirus began to appear with many cases in Santa Clara County. The stock market dropped on the uncertainty and the federal reserve acted quickly by dropping rates by a half point. By the second week, the World Health Organization declared this as a pandemic and the stock markets continued to fall and more drops could be coming.

Real Estate Going Forward

In the short run, there should be enough momentum from this prior group of Buyers for a short period of time. Many in this last group have already liquidated their assets and have been bidding and ready to buy. However, given the uncertainty, unknown impact, duration and magnitude of this pandemic, Buyers are quickly getting nervous on multiple fronts. With the volatility of the stock market down from 18% to over 20% at this moment, remember that tech stocks are the key sources of Buyer down payments in the Silicon Valley. This sudden drop will affect Buyers especially here in the Valley in a major way. We are seeing drop-offs of Buyers during our offer reviews on our listings due to the current crisis. Much will depend on how much worse the situation becomes.

The first scenario is that the situation trends in a positive direction, then the momentum from earlier in the year would lead us into a recovery. Interest rates are at record lows once again and it is very likely that rates could go down further which would be attractive to homebuyers. The second scenario is if we go into lock down; similar to China, Italy and Spain. No rate cut of any kind will help if we end up requiring staying in our homes. If that scenario arises, then the real estate market will come to a screeching halt as with every other part of our economy.

Buyer/Seller Advice

As a Seller, if the situation improves then we most likely haven’t lost too much momentum from earlier in the year. If we end up trending towards the worst-case scenario, there is possibly a small window to get your home sold, but that window is closing very quickly in the short run.

As a Buyer at this very moment in time you will likely have fewer competitors than the last 4 months. If you do get into contract, just be cautious that there might be disruptions in the real estate supply chain such as with lenders, appraisals, inspectors, title companies, etc. I would prefer to take advantage of the market to buy if things do get worse, however if the entire supply chain cannot perform their jobs, then it would be very difficult to close a transaction. Cash would be the least dependent scenario, where most everything could be done virtually with very little interaction needed. If there is a Seller that must sell, and you could buy the home virtually, it is possible that a deal could be had.

Some argue similar to the dot com bust that people flooded to real estate for safety. That is possible, assuming the transaction could be completed virtually which would be difficult in the short run.

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Wednesday, January 22, 2020

My Next Play – Owning a Real Estate Brokerage

It has been six years since I led LinkedIn’s market entry and product launch into China. I was frequently challenged by complex business problems that required sophisticated technical solutions. I enjoyed working with and managing extremely talented, cutting-edge teams paired with complex technical solutions in order to deliver projects and programs under tight timelines. Leaving the Technology sector was a big decision for me after 13 years, but I was in search of more challenges.

Real Estate Industry

Real Estate was an industry that I was already working in for over 11 years at the time. I saw an opportunity for innovation in an industry often leveraging legacy processes; not just in technology, but in the area of Agent quality and the overall customer experience. I wake up each and every day driven by the desire to help as many of our customers as I can, and to provide them with a real estate journey filled with trust and integrity, much needed real estate education, strategic planning and a smooth and wonderful customer experience. The last 6 years have been an amazing journey of growth and discovery, both personally and for the business as a whole. I am excited to announce my next play is to continue to build out more high-quality Agents to further define and lead our industry into the next century!

Keller Williams Santa Clara Valley

I am pleased to announce that I will be launching a new Keller Williams Brokerage as Founder and Operating Principle, named Keller Williams Santa Clara Valley. Before this area was known as the Silicon Valley, the South Bay was called Santa Clara Valley, which pairs nicely as our headquarters is based in Santa Clara as well. We are also exploring future expansion into surrounding areas. Located in the heart of the Silicon Valley, we believe that we provide the optimal location for our Agents to more effectively serve their customers. This new venture will allow us as Agents to further establish high quality Agents in the industry.

Why Keller Williams?

I have explored many brokerages and Keller Williams is still the company that was built by Agents for Agents. This opportunity is a prime example of a company that gives their Agents opportunities that I have not seen with any other firm. We don’t brand the company; rather, we allow you as the Agent to brand yourself, subject to the rules of the Department of Real Estate. Their systems and models are pushing the envelope and they have researched and defined not only how to create successful Real Estate Agents, but also to ensure that these agents are financially sound and running profitable businesses. Last but not least, their latest investment in technology is focused upon empowering us as Agents to perform less backend work, and to streamline our processes so that we can do what we do best: Educate, strategize and service our customers. I am proud to be a part of an organization that not only sees the value that each and every one of us brings to our industry but is also working hard to continue pushing us into the future.

Agents - We Are Hiring!

If you or someone you know would like to join us in our newest venture, we are looking to speak with you! Send me a direct message or contact me at (408)313-4352 or e-mail at

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Monday, January 6, 2020

2019 Silicon Valley Real Estate Year in Review

We wish you and your families health and prosperity in the new year! This is a time for us to reflect on 2019 and look forward towards 2020 and what real estate adventures await us in the new year.

Q1 2019 – Uncertain Buyers, Uncertain Market

2019 started off with major concerns over the health of the real estate market. The latter half of 2018 was the toughest real estate market in a decade-long bull market since the sub-prime meltdown. In the first quarter, that same Buyer sentiment continued as there were few homes being transacted. Buyers had concerns over affordability, the trade war with China and the volatility of the stock market, which took a major hit in December of 2018. Homes were sitting longer on the market with very little showings. Sellers were shocked by this, yet many held onto 2018 price points and many homes sat on the market and were eventually taken off the market.

Q2 2019 – Stimulus Generates a Positive Reaction

In the second quarter, real estate activity started to show signs of life led by an interest rate drop by the Federal Reserve. The two key requirements for Buyers were locations closer to work, paired with areas with excellent school districts, which we define as “Prime Locations.” Prices saw slight drops but held steady in these areas; Buyers had fewer competitors if any at all. Areas that did not fit this template had longer days on market - anywhere from 30 to 45 days or more depending on the Seller’s resolve on the final sale price. If Sellers held onto a price that the market would not pay, they would either continue to sit on the market or take their homes off the market altogether.

The Condominium and Townhome sector has been majorly impacted if the homes are not located in a prime location. There have also been multiple new home construction complexes all around the Bay Area that have flooded the market with inventory. At times they have lowered prices to where it simply made more sense to buy brand new verses a re-sale home on the market. We have been able to negotiate heavily with these new home builders.

Q3 2019 – Momentum Continues with Yet More Stimulus

In the third quarter, the Federal Reserve dropped interest rates once again. This stimulus helped to kick off a flurry of refinances as well as lower rates for home purchases. This stimulus helped to get more Buyers out and about, however other than markets in prime locations, these Buyers were looking for deals and many were to be had in the market. Nonetheless there were certainly more Buyers making offers and getting into contract.

Q4 2019 – Even More Stimulus in a Low Inventory market

In the fourth quarter, the Federal Reserve dropped rates yet again, kicking off frenzies in certain markets due to the seasonal low inventory in this time in the market. With price reductions and low rates, Buyers continued to buy homes until the holidays came into effect.

Buyer and Seller Advice

As a Buyer, much will depend on which market and what category of home you are purchasing. Homes of any category in a prime location will likely come with multiple offers or sell in a short period of time. Single Family Homes outside of a prime location are still desired, and deals could be had depending on the location. It is yet to be seen if Condominiums and Townhomes will see a recovery in 2020. These are prime for a deal for Buyers looking for one.

As a Seller the inverse is true from the Buyers perspective. Pricing is key. If you over price your home, your home will sit with very little showings. The market dictates price and Sellers that continue to hold onto 2018 peak pricing must realize that the peak has passed. This is a reality that Sellers must accept before even considering going on the market. The latest data must be taken into account in your pricing decision. These will vary by home type and location. Homes will sell but not for more than what the market is willing to pay.

2020 Outlook and Beyond

The concerns about the China Trade War seem to have subsided as the stock market continues to trend upward. The expectation is that there will be a resolution closer to the election. This concern is now replaced by the uncertainty with Iran and what their next move maybe after the incident in Iraq. For our Silicon Valley economy, the health of the job market continues to be strong, the interest rate stimulus and momentum from 2019 will likely carry forward into 2020. We have yet to see the impact of the Tech IPO’s as some have had mixed results. The major uncertainty will be what happens post-election and will depend on who wins the election. For now, if the majority of factors remain the same, we should have enough momentum to have a stronger market but still a market in equilibrium overall.

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Monday, October 7, 2019

Q3 2019 Silicon Valley Real Estate Market Update: Fluctuating Market

The third quarter of 2019 has been affected by a combination of seasonality and macroeconomic factors that have caused continual fluctuations in the Real Estate market. The Silicon Valley market has trended toward a more balanced market with a bit more activity this quarter than the second quarter.


The biggest question weighing on the minds of the consumers is the instability of our political and economic environments; specifically, in regard to the trade war and now the discussion of impeachment. All of these factors are creating instability and volatility in the political and economic outlook.

Interest Rates

In response to these concerns and a weakening economy, the Federal Reserve reduced rates for a second time this year and is anticipated to reduce rates once again by the end of the year. This means lower mortgage interest rates are on the horizon; likely even lower than the previous historically low rates.

Equity Markets - Nasdaq Snapshot Q3 2019

The NASDAQ index, which is the heart of the down payment of Silicon Valley workers, continues to fluctuate, but overall is trending upward from the lows of December 2018 and June 2019.

Exhibit 1 – NASDAQ Stock Index Year-to-Date 2019
Source - Year to Date Yahoo! Finance


The local Silicon Valley economy continues to remain healthy. Unemployment rates in the area are at all-time lows at 2.7% per the Bureau of Labor Statistics. As mentioned, the overall trend of the NASDAQ has been trending upward, though volatile, and if timed correctly can be maximized for liquidity.

Mortgage Rates

As a result of the Federal Reserve interest rate reduction, mortgage rates have tumbled to record low rates. For Buyers or Homeowners that are cash heavy or have liquid assets, banks are offering additional drops in the interest rate if those assets are brought under their umbrellas. There was a flood of refinance activity that banks did not have the capacity to service which has bogged down the purchase turn times as well. This situation is temporary, and they should scale up very shortly. If you haven’t refinanced last quarter there are likely still excellent rates for you and possibly more to come.

Exhibit 2 – 30- Year Fixed Rate Mortgage Average

Santa Clara County Snapshot

As predicted, the number of Active homes dropped as we exited the summer peak months of inventory. With the drop in inventory, the market showed some relief for Sellers as the days on market for sold homes dropped 36% for Single Family Homes and 19% for Condominiums/Townhomes respectively. The homes that are on the market continue to sit for 38 days and counting, but still 30% and 21% respectively lower than last quarter.

For Single Family Homes we cleared out more inventory in this sector as homes that sold were sold quickly within 2 weeks. The Condominium/Townhome sector took exactly a week longer at 3 weeks on the market to sell but didn’t clear as much inventory with some residual inventory in the quarter. The number of listings taken off the market dropped as well.

In summary, the market has recovered slightly better in the third quarter as compared the second quarter. More homes are selling than last quarter, and they are selling at a faster pace.

Exhibit 3 – Q3 2019 Santa Clara County Real Estate Snapshot 

Source – MLS Listings Database

Seller Advice

Firstly, in many areas, home prices are down anywhere from 10% to 20% from 2018. This is a reality that you will have to accept before being able to successfully sell your home.

As a Seller, you want to be priced at market and have a move-in ready home so that you are one of the sold homes - not the one that is sitting on the market. Buyers have many choices and your home has to stand out among the pack. At times it may not be possible to re-model; in that case, we will do our best to address “low hanging fruit” and be sure to stage your home to compensate. The Condominium and Townhome sectors have improved but continue to struggle, especially if they are not in a prime school district. There are many new home construction builders cutting deals and providing enormous incentives that are hard to match. Creativity will be required.

Buyer Advice

As a Buyer, this is your market! With the price drops and lower mortgage rates, homes have gotten more affordable than in years past. Bear in mind that not all homes are created equal. A home located in a prime location, with good schools, re-modeled and priced right will sell with a few offers, typically though not as aggressive as in prior years. Homes that are on the market for a longer period of time are the ones where you will have more leverage. Be sure you evaluate all options, old and new, and that you have the right team that knows how to operate in both realms. If at all possible, take advantage of this upcoming season as the market tends to slow down. Though you don’t have as many choices, if a Seller needs to sell they likely really “need” to sell and deals can be had.

2020 Outlook

2020 is an election year and it is very likely going to be another fluctuating year for real estate. There will be a lot hinging on the trade war, impeachment situation and the ultimate selection of the president. Most interesting will be the down payments coming from the IPO’s that have occurred earlier this year; will those folks now be out and about to purchase real estate?

Contact Us

For a customized real estate consultation or mortgage evaluation, reach out to us at (408)313-4352 so that we can analyze your specific real estate situations!

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Monday, July 8, 2019

Q2 2019 Silicon Valley Real Estate Market Update - The Tale of Four Markets

In the first quarter of this year, the real estate market had a slow start, both here in the Silicon Valley and nationwide. Buyers remained hesitant from the slow bear market that took place in the latter half of 2018. Many thought that this was the end of the real estate market and that we were in a full recession. However, in the second quarter, the market picked up variably and manifested itself into 4 market segments: Luxury, Prime Locations, Single Family Homes and the Condominium/Townhomes.

The Tale of 4 Markets

Overall the market is more balanced with the advantage skewing in favor of Buyers. Actual performance depends on the specific market segment. Homes in fully renovated condition and/or in prime locations continue to sell at a premium, quickly and with multiple offers. Sellers continue to struggle with the reality of the market by holding onto prices from the peak market last year. Those that do, find their homes sitting longer on the market with very few visitors every week and lower prices to no offers. Buyers that do offer are not willing to pay last year’s prices and often have other homes on the market to pursue. We have seen anywhere from a 10% to 20% drop in prices since last year in varying neighborhoods.


The Luxury market will continue to be its own market segment. These Buyers are looking for “the” home that matches “their” requirements. They have the means regardless of the state of the real estate market, though the number of available competitors reduces in a down market which is to their advantage.

Prime Locations

The age-old adage “Location, Location, Location” really shows itself in a declining market. In the Silicon Valley, a Prime location is defined as a pairing of an excellent school district with the closest distance to work. This segment has made a comeback in the second quarter with the return of multiple offers and competitive bids, albeit not as aggressive as the price overbids in the last decade.

Single Family Homes

Single Family Homes have always been the preferred home class for Buyers. It is preferable to own the lot with space for the family, with no Homeowners Association (HOA) rules and possible increases in the monthly fee or special assessments. Single Family homes around the million dollar price range continue to sell due to affordability. Single Family homes greater than a million dollars will vary depending on the neighborhood but will generally struggle without a strong school district and location.

Condominiums and Townhomes

This market segment has been decimated and extremely slow. One of the key reasons is that there is quite a bit of brand new home construction coming online. When the market shifted, new home builders scrambled to acquire land that they had stopped purchasing during the downturn. Once acquired they have a long and arduous process of design, city and county approval for their plans, and the leg work in order to get their developments online, which all take time. As these finally start coming to fruition the market turns, and this product group floods the market with more inventory in addition to what is on the market. The second reason is that prices have risen so high and with a market correction, Single Family homes are more within reach. Homes with excellent schools paired with locations have not seen an impact.

Santa Clara County Real Estate Snapshot


As we head into election year, most presidents have kept the economy stable in order to support their re-election. The key wildcard is the China trade war which continues to weigh on the markets. However, the NASDAQ hit yet another record this week and despite the volatility, Silicon Valley workers do have equity to tap into if they choose to. The Federal Reserves has signaled that they may drop interest rates sometime this year which will help the real estate market by lowering interest rates further. These are all important foundations for the real estate market.


The Silicon Valley continues to hum along with low unemployment rates and multiple initial public offerings (IPO’s). The blackout periods have yet to free up capital that will surely be poured into real estate. We are expecting Q4 2019 and much of 2020 to have an influx of homebuyers centralized in San Francisco, the Peninsula, the South Bay and parts of the East Bay as well.

Interest Rates Have Dropped; Time to Refinance or Purchase

It is time to refinance your mortgage - especially the 30-year fixed mortgage. Rates have trended downward and have hit and surpassed the lowest point in the last decade allowing you to reduce hundreds of dollars off of your mortgage. The 30-year, 10-year and 7-year fixed products all have excellent purchase rates. Needless to say, you can buy more house with these lower rates. For those of you that are cash heavy, our lender can also drop your rate by approximately 0.125% for every $250,000 of assets under management. Re-casting is also a feature that our lender provides. Re-casting is when you pay down your mortgage by $20,000 or more and your monthly payments are re-calculated and brought down if you so choose to do so.

Looking Forward to Q3 2019

As we wrap up the summer months, inventory levels tend to peak in July and homes that don’t sell linger into the fall season. This year the Days On Market have been longer and we will likely continue clearing out inventory for months to come with fewer homes coming online as the year progresses. Not all homes will sell, hence we will likely see more canceled, expired or withdrawn listings. With interest rates dropping to again historical rates with another looming federal reserve rate drop, mortgages won’t stop Buyers from purchasing. The question is, do Buyers feel confident enough in the economy and market to make home purchases? More importantly, have Sellers come to terms with home prices dropping anywhere from 10% to over 20% in the last year? If you are a Seller being patient, making the necessary updates to stand out from the competition and adjusting your price expectations will be the key to selling your home. If you are a Buyer, unless you are going for a home in the prime locations, the advantage is on your side in every way.

Contact Us

For a customized real estate consultation or more details on these loan programs, reach out to us at (408)313-4352 so that we can analyze your specific real estate situations!

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