While I believe that most who are involved in the San Carlos real estate market have been pleased with the turnaround of 2010, I think that most would also agree that the market is still susceptible on a variety of fronts, not the least of which is buyer and seller errors. From 1997-2007, it was difficult for buyers or sellers to do wrong in San Carlos.  If you paid a little over market as a buyer or listed a little high as a seller, the market was robust enough to minimize most errors over time.  That is not the case today.

How do buyers and sellers in San Carlos set themselves up for a successful venture in our real estate market?  Answer:  Educate themselves.  Buying a home in San Carlos should be more than running through some open houses on Sundays.  Selling a home is more than sticking a sign in the front yard.  There should be a well calculated plan in place.  Below are just some of the key points that buyers and sellers should be aware of when becoming involved in the San Carlos real estate market:

1.  You’re in San Carlos. First, understand that San Carlos plays by its own rules.  What is happening in neighboring or nearby towns could be completely different than what is happening in San Carlos. Second, drill down a little deeper. Know the difference between the six areas of San Carlos:  Alder Manor, Cordes, Clearfield Park, Beverly Terrace, White Oaks and Howard Park.  Educate yourself on the difference in buyer demand between these designated areas of San Carlos.  Right now, the difference is significant.  For a color coded map, please click here.

2.  Ignore the List Price. For the most part, list prices in San Carlos are irrelevant. Outside of giving a hint as to what the seller may be thinking in terms of valuation, they should not have any determination on what you ultimately offer on the property.  I have always told all of my buyers that they we need to come to our own, independent evaluation of the property.  List prices in San Carlos are all over the map.  Currently, 25% of our active inventory has been on the market over 100 days.  On the other side of the spectrum, 36% of our pending inventory was on the market for under two weeks (homes used for the percentages above were spread out evenly over all different price zones in San Carlos).  The point is that some of the list prices being set in San Carlos right now are not necessarily at market value . A buyer’s ability to understand the true valuation of a property is critical.

3.  Staging. For sellers, it’s the ability to put your home in the most favorable light possible to prospective buyers.  Many people do not believe in staging.  I will reluctantly admit that I did not either prior to starting my real estate career.  However, I can tell you that most people walking through an open house or a private tour make up their mind about a particular house within the first minute of being in the house.  Either it’s in contention, or they have dismissed it.  The old adage of first impressions are everything, is very true.  Need further proof?  There are a handful of realtors doing a substantial amount of business in San Carlos.  All of them either have a personal stager/designer, or one that works for the realtor almost exclusively. Presentation, spacing and design all make a difference.

4.  Solving Layout Issues. It’s the number one complaint among San Carlos buyers.  Unless they have been substantially remodeled, many San Carlos homes have layout issues.  The key is understanding which layout problems are more easily solved.  San Carlos homes suffer from layout issues for a variety of reasons.  Most homes in the flats were built as two or three bedroom homes in the 1940s.  Over time, many of these homes were the victims of weekend warrior projects. A high percentage of these homes also have unpermitted additions and remodeling flaws. Homes falling into this category will almost immediately be dismissed by most buyers.  However, if the house has a great lot and happens to be on an ideal street, it may be worth your time to bring a designer through the prospective house.  There are a few very knowledgeable designers in San Carlos that can walk through a house with you and your realtor and advise you almost instantly on two items: (1) how to fix the issue and a prospective cost; and (2) what the likely requirements will be from the building department in San Carlos.  Once buyers are armed with this information, they can better determine the true value of the house. Having the professional advice from the designer on the two points above will put the buyer in a better position to negotiate the price of the home. On a side note, if you are in need of a designer to accompany you on a tour of a home that you are considering, I am happy to refer you to the two that I have used with good success in San Carlos.

5.  Educate Yourself. Times in real estate have changed.  Realtors are no longer able to hoard the statistics on the real estate market.  Anyone can get comparable sales prices and market trends at the push of a button.  Many buyers and sellers looking in San Carlos do gather a lot of their own information.  However, few take it the extra step of really understanding the subtle nuances that exist in San Carlos.  The advice and guidance that you receive on these subtle nuances will make the biggest difference in the deal you ultimately strike.  What do I mean by subtle nuances?  Items that do not show up on most comparable market analysis reports in San Carlos, such as:  (1) current buyer preference/demand (it seems to change weekly), (2) layout disasters vs. those that are solvable, (3) when a street, or even a block, can make a difference in valuation, (4) prospective distance to downtown, (5) the differences found in the six areas of San Carlos, (6) finding the off-market properties, (7) determining an independent valuation, and much more.  All of these are crucial elements that should be taken into account when buying and selling in San Carlos.

San Carlos and much of San Mateo has been hit with the results of a strike led by workers for Allied Waste.  The strike is expected to last for a few days.  In the mean time, get used to seeing trash cans blanketing the city streets.  Local Teamsters 350 Union appears to be leading the strike after being upset about stalled contract negotiations.

Over 500 Teamsters that work at Allied Waste are honoring the picket line. There are 12 clerical members on strike, and hundreds more workers who honored the picket line of their fellow workers and stayed away from work.

The clerical workers, who are mostly female, apparently do not have the same health, welfare and pension benefits or wages as the male workers at the company. Allied Waste has reportedly refused to make an offer to the clerical workers with comparable benefits and wages to the male workers. Local 350 has filed unfair labor practice charges against the company on behalf of the clerical workers.

This issue I take with this strike is that they clearly waited until the hottest days of the year and moved forward with the strike.  The timing of this strike clearly makes the action punitive in nature and leaves the residents in a real bind.
Stay tuned as this story continues to develop.

Yes, you read that correctly.  Among a host of other grenades buried in the 2,300 page health care reform bill was a section enabling a federal tax on some real estate transactions.  Why is this the first time you are hearing about this?  Believe it or not, most members of Congress voting on the Bill did not know what, exactly, was included in the 2,300 page monstrosity.   Some may recall Nancy Pelosi’s famous line, “We have to pass the Bill, so that you can see what’s in it.” Well, she was right.  It can be a bit confusing at first, but here is who’s in danger of owing another 3.8%:

Who is going to owe?

If you meet both of the requirements below, you may be liable for the additional 3.8% Federal Tax:

(1)  The sale of your property results in a gain of $500,000 or greater.

(2)  Your income is $200,000, or more, for a single seller or $250,000, or more, for a married couple

This tax is on top of the capital gains tax you will already be paying.  A $500,000 or more gain in San Carlos will affect more than a handful of San Carlos families.  Many families that bought in the mid to early 90s in San Carlos have most likely already made a minimum $500,000 gain.  If those same families meet the income requirements, they will be coughing up another 3.8% through escrow starting in 2013.

A big THANK YOU to all who visit the San Carlos Blog.  I thought it would be helpful to bring everyone up to speed on where things are headed as some items on the blog will be changing.  As many of you know, the San Carlos Blog is the longest running San Carlos-based Blog.  The SCB is 100% devoted to providing you with an insider’s view into San Carlos real estate as well as all community based issues.  San Carlos is a town which prides itself on community.  Therefore, the real estate market and the community are tightly linked, and thus the reason I have always posted one community-based post for every real estate post.

With this in mind, I will be unveiling a new site that is currently being built.  www.BestOfSanCarlos.com will be the first site of its kind in San Carlos.  This site will more closely tie together the community aspect of San Carlos.  In the coming weeks I will provide a full update on the functionality of this new site.  In short, this site will tie together San Carlos businesses, volunteer groups, sports leagues, community events, awards and much more!  Stay tuned for more details as the site gets closer to its launch date. Please keep in mind that the SCB will continue to operate as normal. The Best of San Carlos site will simply be a complementary site.

The San Carlos real estate market has been challenging over the past few years.  I feel very fortunate to have the SCB, as it has opened opportunities for my buyers and sellers that may not have existed otherwise.  In fact, in the last 33 months I have been involved in 48 transactions in San Carlos.  Once the remaining pending transactions close out next week, it will be the equivalent of closing approximately one transaction in San Carlos every three weeks. The inside information gained from these transactions has been passed on through posts on the SCB.  Below is  a complete list of all 48 transactions.  Again, thank you for stopping by and I sincerely appreciate the patronage to the SCB.

Bob

1375 Orange Avenue, TBD, COMING SOON, Seller

104 Windsor Drive, 1,099,000, PENDING, Seller

181 Coventry Court, 1,649,995, PENDING, Seller

928 Heather Drive, 1,395,000, PENDING, Seller

113 Rockridge Road, 820,000, SOLD, Seller

324 Oakview, 1,235,000, SOLD, Seller

2622 Howard, 1,515,000, SOLD, Buyer

1311 Geneva, 1,015,000, SOLD, Seller

1025 Hewitt Drive, 1,215,000, SOLD, Buyer

1526 Chestnut St., 1,152,000, SOLD, Buyer

1262 Magnolia Ave, 700,000, SOLD, Seller

1962 San Carlos Avenue, 671,000, SOLD, Seller

115 Northam, 950,000, SOLD, Buyer

908 Rosewood Avenue, 1,025,000, SOLD, Buyer

434 Hill Way, 1,410,000, SOLD, Buyer

1829 Eaton Avenue, 1,120,000, SOLD, Buyer

417 Hillcrest Drive, 1,230,000, SOLD,  Seller

2036 Alma Street, 1,125,000, SOLD, Seller

143 Ruby Avenue, 830,000, SOLD, Buyer

2056 Arroyo Avenue, 799,000, SOLD, Buyer

1421 Hull Drive, 749,000, SOLD , Buyer

131 Ruby Avenue, 840,000, SOLD, Seller

347 Elm Street, 875,000, SOLD, Seller

1701 San Carlos Avenue, 455,000 SOLD, Seller

827 Sunset Drive, 820,000, SOLD,  Seller

400 Alameda de las Pulgas, 1,406,000, SOLD, Seller

1797 Elizabeth Street, 1,380,000, SOLD, Buyer

1047 Mc Cue Avenue, 610,000, SOLD, Buyer

977 Holly Street, 489,000, SOLD,   Seller

3015 Brittan Avenue, 1,185,000 SOLD, Buyer

1340 Elm Street, 740,000, SOLD, Buyer

2105 Eaton Avenue, 2,150,000, SOLD, Buyer

2071 Belle Avenue, 851,000, SOLD, Seller

29 Elston Court,  1,200,000, SOLD, Buyer

30 Hidden Valley Drive, 1,088,000, SOLD, Buyer

316 Chesham Ave, 860,000, SOLD, Buyer

1376 Cedar Street,  1,240,000  SOLD  Seller

401 Old County Road, 545,000, SOLD,  Seller

30 Arundel Road, 821,000, SOLD, Seller

2716 San Carlos Avenue, 662,000, SOLD, Seller

One Coleman Court, 1,698,000, SOLD, Seller

265 Hyde Park, 1,500,000, SOLD, Buyer

812 Cordilleras Ave., 900,000, SOLD, Seller

1924 St. Francis Way, 1,202,000, SOLD, Seller

64 Belvedere Ave., 1,970,000, SOLD, Buyer

400 Alameda de las Pulgas, 1,600,000, SOLD, Buyer

140 Sunnydale Ave., 890,329, SOLD, Buyer

San Carlos City Manager, Mark Weiss, is set to retire.  After what a rather brief stint in San Carlos, Mr. Weiss will no longer be the City manager as of December 18, 2010.  The City Council will start their search for a new City Manager immediately.  Given the current economic issues facing the city, the new City Manager will undoubtedly have to come up to speed quickly.  More to follow as this story develops.  This story was confirmed by a member of the San Carlos City Council.

It seems fitting that the longest running internal battle in the history of San Carlos has taken yet another bizarre turn.  Fasten your seat belts, synthetic turf is once again making in headlines in San Carlos.

The History

For those of you who have been living under a rock or are new to San Carlos, here’s a brief synopsis of the history:

The ten year debate over synthetic turf and its possible installation in San Carlos has been the subject of heated debate, public outcry, commission meetings, city council meetings, studies and a lawsuit. The issue has been struck down by city council and then revisited and approved. The Parks and Recreation Department in San Carlos first started looking at installing synthetic turf back in 2000.  The City did this primarily for one reason:  increase playable hours.  Back in 2000 the City of San Carlos commissioned a report that examined their current parks and fields.  The “Mahady Report” as it is now known, basically said that San Carlos fields would face dire effects, including field failure, in the upcoming years because the amount of traffic on current fields was simply more than the fields could support.  The recommendation was for the City to add more fields or turn one or more of the fields to synthetic turf and have that particular field take some of the play load from other fields that were overused.  It was initially believed that Highlands Field and Stadium Field (located directly behind Highlands Field) were the best two options for synthetic turf installation because of their size and ability to take the burden off of other fields.  Stadium Field was scrapped early on in the process because it was ruled too dangerous for firetruck/emergency access to the field.  The only real road access was from vehicles coming up Madera and eventually up to Elston Court.  Additionally, all involved believed that without the benefit of lights, the field would not be getting enough bang for the buck.  Lights at Stadium Field were viewed as not being practical.  Highlands Park already had lights installed, making it that more attractive and it remained the primary focus of the Parks and Recreation Department.

Over the years other sites were discussed.  Most prominently, the field at Heather School was discussed in addition to Highlands Field, but it was ultimately ruled out after the San Carlos School Board and the City did not see eye to eye on the field.  Others that were looked at included Burton Park, Tierra Linda Middle School’s field and Crestview Park.  However, none could match attractiveness of Highlands Park, with its size and lights.  The City finally authorized the installation on synthetic turf amid heated debate and construction began on the new field.

The Lawsuit

In the mean time, a group called Save Highlands Park, sued the City in 2009, claiming that the documentation the City used to approve the synthetic turf installation was not stringent enough.  The City believed that the lawsuit was ultimately without merit and began the process of hiring a contractor and starting the installation.

The Ruling

On Tuesday, Judge Marie Weiner of the San Mateo County Superior Court, finally submitted her ruling on the Save Highlands Park lawsuit.  The result has both sides claiming victory. The somewhat confusing ruling essentially said two things: (1) the synthetic turf, itself, is acceptable; and (2) the City failed to adequately study the effects of the increased traffic on the environment.

The City is claiming victory because the ruling did not stop the project from continuing.  Save Highlands Park is claiming victory because Judge Weiner backed the group’s argument that the city rushed the project and ignored their own data on the impact of traffic on the environment.

Both groups seemed to be somewhat surprised that the other is claiming victory.  One thing is for sure, both groups will now spend more money on legal fees to gain further answers into the vague ruling.  The City Council will be discussing the results of the ruling at their upcoming meeting.

Analysis

Having been involved with this issue since 2000, I can see why the City is claiming victory.  Much of the debate surrounding synthetic turf was on the actual turf itself.  Was synthetic turf a favorable playing surface?  Was it likely to cause more injuries?  Did it take away from the mostly natural state of the park?  Were there any hazardous effects from playing on synthetic turf?….these were all questions put before the city as measures of concern if synthetic turf was to be installed. Judge Weiner seems to have stated that the turf itself, is fine.  Her real concern seems to be a secondary problem, that being any possible environmental issues with increased traffic going to the field.  Combined this part of the ruling with the lack of any type of injunction against stopping work on the installation of the synthetic field, and you can see why the City feels victorious in the ruling.  On the other hand, the vagueness of the ruling and the concern stated by Judge Weiner over the inadequate study and analysis for possible environmental effects due to increased traffic would be a logical point in favor of Save Highlands Park. Stay tuned as this seemingly endless issue reclaims San Carlos headlines in the weeks to come.

Disclosure

*  Over the years I have written a few articles on the blog regarding the synthetic turf issue.  In each article I feel that it is important to disclose that I was on the Parks and Recreation Commission from 2003 through 2005, and ultimately resigned my position on the commission, largely due to the frustration surrounding this particular issue.  While on the commission I did vote in favor of the installation of synthetic turf.

It’s a fair question.  Much of the data currently coming in is confusing.  Red hot one week, stone cold the next week….the San Carlos housing market can be difficult to judge.  Let’s start by taking a look at the numbers:

Recent Data Points

Current Active Properties in San Carlos:  63

Current Number of Pending Properties:  23

Number of Properties to Sell in Last Three Months:  54

Of those 54 Sold Properties, 20 sold above $1,000,000

The average Days On Market (DOM) for those 54 properties was 39 days….down considerably from the high 40s of 2009.

Average Selling Price: $1,012,152

Average Price Per Square Foot: $551.09

The average list price obtained for the sale of those 54 homes was 100.53% of the last posted list price.

11 of those 54 homes had a reduction in their posted list price.

Finally, and perhaps the most telling statistic, of those 54 homes, 28 went Sale Pending in 12 days or under.

Analysis

A snapshot of the numbers above would seemingly give the impression of a healthy San Carlos real estate market.  So where is the confusion coming from?  I had one of my buyers tell me last week,  “I don’t get it.  Some of these houses we have looked at have moved immediately, while others, which seemed similar, have been sitting for some time.  It doesn’t make much sense.”  I have had similar comments from buyers while holding open houses over the last two months.

In order to better understand our current market, it’s helpful to recognize how we got here:

First, think back to 2005.  Anything and everything sold in San Carlos.  People just wanted in, and pretty much did anything to make that happen. There was a loan for everyone.  20% down, 10% down, no money down and my personal favorite, no money down and cash back at closing.  It was out of control, to put it mildly.  Now fast forward to the time period of the last quarter of 2008 through 2009.  A recession, collapse of the mortgage industry and a general feeling of anxiety crippled the San Carlos market. Unless you were willing to take enough of a hit on the sale of your home to get in front of the market, your house was not going to sell.  Depending on the value of your home, you lost anywhere from 10-20% between 2008 and the end of 2009.  By the end of 2009 we started to see the 700K-900K market pick up.  The prevailing thought was that the San Carlos market had most likely bottomed.  Combined with record low interest rates, the growing confidence in the San Carlos market forced all those who were on the sidelines for much of 2009 into the market, along with those who began their search in 2010.  Low interest rates and bottomed-out prices were both great pieces of news for buyers…..except for one minor problem….very little inventory.  For much of the early part of 2010, you only had 3 types of sellers in San Carlos (1) those who had to sell due to financial reasons (2) those selling due to a job transfer or a trustee’s sale; and (3) those selling because they were comfortable enough financially to try and take advantage of the move-up market (there were not many).  The result was more competition for homes and the market started to regain some of its previous losses.

Now, as we head into the last part of 2010, I think it’s safe to say that we have regained a minimal amount of the ground we lost between 2008 and 2009.  Buyers are clearly back in the market.  The loan guidelines have loosened considerably from the big banks as compared to 2008 and 2009.  Finally, while the anxiety has not totally left the market, it does not have the crippling effect that it had in the past two years.  The general feeling among buyers is that if they find a house that is priced at market value and is in an desired location, they are ready to go to battle to get it.  So what exactly is a desired location in San Carlos?  It’s been well documented that Howard Park and White Oaks have been the clear leaders in terms of buyer demand.  However, if a home is located on a street that is not busy in Howard Park and White Oaks, the gloves really come off.  Additionally, noting the statistic above referencing the 28 houses to go pending in 12 days or less, 18 of those 28 homes were located in the Howard Park/White Oaks areas.  On a side note here, I believe Beverly Terrace, Cordes and Alder Manor are gaining ground on Howard Park/White Oaks, but time will tell.

Summary

The San Carlos market is currently relatively healthy, but its overall numbers are somewhat inflated by the intense bidding surrounding those houses that have come onto the market in the truly sought after locations.

Please consider coming out for a wonderful day of golf and support the Parks and Recreation Foundation of San Carlos.

Your foursome may not consist of Ty Webb, Al Czervik, Judge Smails and Doctor Beeper….but I promise it will still be fun!

What:  A scramble format golf tournament

When: September 10th at 12:00 pm

Where:  Poplar Creek Golf Course in San Mateo

Why:  The Parks and Recreation Foundation of San Carlos supports the park system in San Carlos through capital improvements, such as the recent Burton Park playground renovation.  Your support generated through the golf tournament will help make upcoming capital improvements to our parks possible.

Join The San Carlos Blog Foursome For Free!

I will be purchasing at least one foursome, and if interest dictates, a second.  San Carlos and many of the blog readers have been extremely good to me and I am happy to return the favor.  The only requirement will be that you will be forced to witness my awful golf swing.  If you can handle that, you’re in.  I will take the first seven players to email me and confirm.*

For more complete information on the golf tournament, please click here.

* If your name happens to be Adam Rak, you are specifically excluded from this offer.

If you have recently bought property in San Carlos, you most likely used a local offer form called the PRDS Real Estate Purchase Contract.  Of course, there are several different forms of possible contracts, but the PRDS is used the vast majority of times in San Carlos.  As with most form contracts, there are pitfalls.  Knowing those pitfalls ahead of time can put you in a far better position in terms of protecting yourself.  As part of our continuing series of contract pitfalls, today we are going to look at some of the possible technical issues surrounding contingencies.

Most offers to purchase property in San Carlos contain two standard contingencies.  The first contingency will state that, although the buyer has been pre-approved, the buyer will now need to forward a copy of the fully executed purchase contract onto the bank for final approval.  In order to safeguard their deposit that came along with the offer, buyers will ask for a certain amount of days (usually 7-17) as a contingency period for the bank to give them their final approval.  The second contingency that we commonly see concerns the property condition.  Generally, buyers ask for a contingency period (usually 5-14 days) to allow themselves an opportunity to bring in their own inspector (usually a property and termite inspector, although roof, chimney and foundation inspections are common as well).  Election of these two contingencies can be found in Sections 20(a) & (c) of the PRDS form contract.  Other, less frequent contingencies that buyers sometimes elect are: a sale of the buyer’s current home contingency, a lead inspection contingency and contingencies centered on a tax exchange.

Most errors that some buyers and sellers make with contingencies center around their continued existence and their removal. For instance, in the PRDS contract, the contingencies are described as active, meaning that until they are removed or the contract canceled, the property remains pending, regardless of the time expiration on the particular contingency. Some sellers believe that if a buyer does not affirmatively act one way or another upon the expiration of the a contingency period, the contract can be canceled.  They are partly correct.  As with many form contracts, ambiguity is present in certain sections.  The seller can cancel the contract, but the PRDS form contract is silent as to whether this is a unilateral right of the seller.  This being true, the remaining provisions of the PRDS contract state that cancellation of the contract can only be accomplished by a written instrument, stating the cancellation, signed by both parties. So in essence, the seller is not free to sell the property to another buyer until the contract cancellation is in writing from both parties, not just the mere expiration of the contingency period.

Please watch the San Carlos Blog for more on the Real Estate Contract Pitfall series.

Applications are now being taken for the Annual Leadership Program.  In this annual program involving the cities of San Carlos, Belmont and Redwood City, and their Chambers of Commerce, dynamic sessions will be held one Friday each month, September through June, with 40 participants.

Participants learn about issues of vital concern to their city; and learn how they can effectively shape the future of their community, their organization or their business.  The focus of each session is not on specific political viewpoints; rather, a number of alternative views are presented from experts in the given areas.

The goals of the program are to:

*  Identify and motivate potential leaders

*  Acquaint potential leaders with community needs and challenges

*  Introduce participants with notable leaders in their community

*  Challenge program participants to become involved in their community

Sessions generally run from 8:00-3:00 pm.  A continental breakfast and lunch are provided.

A link to the Annual Leadership Program site can be found by clicking here.