Friday, August 28, 2009

Off to College-----

Well, the Spouse took our Oldest off to college (at Reed in Portland) this week. After the emotional breakdown, it occurred to me that our move to Piedmont in 1996 might generate enough savings to pay for college.

You may know that I developed a biz school-style spreadsheet looking at whether it's cheaper to move to Piedmont and go to public k-12 schools, or move to surrounding Oakland neighborhoods and pay for private schools. The usual question buyers face.

After 2 years, even with one child, the tuition payments are higher than the marginal Piedmont payments, assuming one could afford to buy the more expensive home, of course. One ah-hah insight is that you'll eventually sell the Piedmont house and recoup your investment, while the tuition costs are a straight outgo, with sizeable inflation, no less. Email me (Kennedy@MaureenKennedy.Net) you want a copy of the factsheet summary or spreadsheet....

But back to college. I went back to the spreadsheet, and noticed that the present value savings, after 12 years of Piedmont schools, assuming 2% appreciation on the home increment, are:

For one child: $61,000
For two children: $236,000
For three children: $411,000
For four children: $586,000

So we've roughly paid for college at Cal for the three boys, or paid for half of private college expenses, if our alternative in 1996 were to live in Berkeley and put the kids in private schools (and of course, for many, that's not the alternative).

Thursday, August 27, 2009

It's Back to School!

And I've been working furiously this week to get prepared! This week I've been shifting to newer, cooler business tools.

I'm trying to complete my shift from aol (home since 1993--that's a long time....) to gmail. Shifted my blog locus from Active Rain (the original blog platform for real estate) to Blogger. Staying with CoolerEmail for my e-newsletter. So here's the summary:

My best email remains Kennedy@MaureenKennedy.Net. will continue to work for a long time (and no need to send to both, folks--both flow through to my Blackberry immediately).

Check out my new gorgeous Piedmont blog format at or, to keep it simple,

All past e-newsletter articles continue to reside at my blog (and I've been up til 2 am these last few nights cutting and pasting everything to the new site). So if you know someone who's interested in moving to town, tell them to check out the archive or subscribe!

I now have four Google websites you or your friends and colleagues may find useful--just email me and I'll give you the links. They collect resources I've delivered to clients in various less ecofriendly ways over the years. They include:

Piedmont Information (links, photos, documents,school info, factsheets, resources for buyers)
Marketing Samples for Piedmont Sellers (case studies, ideas, background and resources for sellers)
Renovation Resources (energy and water efficiency incentives and rebates, eco-tips, Cost vs. Value reports, vendor lists, build-it-green ideas,links)
Distressed Sales in Piedmont (Q&As on taxation, legal liability, and so on for owners struggling to meet their payments)

Separately, I regularly offer buyers:

An email list of Sunday open houses delivered to their desktop every Saturday morning; automatic e-notifications every time a property meeting their parameters hits the market; a review of typical buyer costs for homes at various price points; a memo outlining strategies buyers can use to increase the chances their offer will be accepted; a table identifying East Bay public schools with high API scores, with click-thrus to sites with more information about those neighborhoods; a list of four deeply experienced lenders to call for financing ideas and insight; and a package of buyer factsheets from the National Association of Realtors.

My website (still www.MaureenKennedy.Net) allows buyers and sellers to organize e-notifications of new listings on their own, and includes a form to request an analysis of the current value of your home.

Bottom line: Jazzier presence, clearly organized information, and a seamless transition.

And don't forget that I'm never too busy for your referrals!

All You Need to Know about Shower Heads

Just today, the New York Times Home section included this story comparing several shower heads. The author was looking for that WaterPik feel from our teenagerdom-----

How to Green Up your Real Estate Practice

I've been doing some file clean up and came across a Google doc I put together last year as part of a panel on Green Real Estate Strategies at the Institute for Luxury Home Marketing last October. Here's the URL to my factsheet on steps you can take to "green" your practice:

New Buyer Resources

If you're a new buyer in this market, you'll want to be prepared, now more than ever! I can offer you:

· A free, comprehensive list of all open houses in the East Bay (not just those in the Chronicle, etc.), sent to your email box before noon each Saturday;

· Free email updates sent to your email box the moment a new home meeting your criteria hits the market or sees a price change;

· A free, no-obligation 1-2 hour tour of any neighborhood you think might meet your needs (or a referral to a deeply experienced agent who covers that area, if I don't), stopping into a couple representative homes;

· Access to a website that includes:

-a review of typical buyer costs for homes at various price points;

-a list of strategies you can use to increase the chances your offer will be accepted, beyond just offering more money;

-a table identifying East Bay schools with high API scores, with click-thrus to sites with more information about those neighborhoods;

-a list of five deeply experienced lenders you might call for ideas and insight on the market and your situation; and

-a free package of buyer factsheets from the National Association of Realtors.

Just give me your email address and I'll get it to you!

A Good Time to Sell?

You know me well enough to know that I'm a straight shooter, more interested in making sure you have the right advice and insight than in getting a check in my pocket. My reputation depends on that. And it's important to know when market trends are counterintuitive. "Everyone knows" that now's a bad time to sell, if you can avoid it, right? Wrong.

Here's a scenario for you: Assume a household in a great house in Crocker Highlands. They've always wanted to move to Piedmont when their children get to school age. Prices have dropped 15% since the peak, though they are way ahead since they bought in 2001. They really need that fourth bedroom.

If they sold the Crocker house and bought a more expensive home in Piedmont in 2006, they would have sold high and bought high--but they were fully prepared to do it. If they sold today, they would sell "low" and buy "low." The key takeaway is that the dollar price discount on the more expensive Piedmont home is larger than the price discount they'll see when selling the Crocker home [assuming a 15% lower price in both cases].

Let's say the Crocker house will sell for $725,000 (was worth $850,000 at the peak). Including lower brokerage fees and transfer taxes, they'll net about $120,000 less than if they'd sold in 2006. But if they buy a home in Piedmont for $1.5 million (was worth $1.750 million at the peak), reflecting the lower fees and transfer taxes, they'll save about $265,000, compared to a 2006 purchase. Between the two homes, then, they are about $150,000 ahead of where they would be had both transactions closed in 2006.

And don't forget ongoing mortgage and insurance costs. That less expensive Piedmont home translates into about a $15,000 a year savings compared to the carrying costs of that more expensive home not bought in 2006. Email me for a copy of the spreadsheet.

How smart is that?

An even more attractive scenario is moving down-Piedmont homes have held their value quite well through the downturn. The same cannot be said about the condo market in general, nor homes in much of the rest of the country, and particularly in typical retirement areas like Arizona, San Diego and Florida. Unless you're planning to retire anywhere in Texas, in Denver, Detroit, Charlotte, Salt Lake or Philly (according to today's Wall Street Journal), you'll likely be selling "low" and buying "super low"!

Nagging Items Bogging You Down?

OK-here's a bit of a diversion. Did you hear knowing moans around you when you saw Julie and Julia--the part when the four friends are out for drinks and one says something like "I asked my personal assistant to go to Safeway and buy pancetta for my big dinner tomorrow, and when I got home she said, ‘Oh, Safeway didn't have pancetta... ‘ I asked her ‘well, did you go to Piedmont Grocery????'"

I so get that "I want you to take care of it and not make me take care of it" feeling.

And Winans Construction gets it too, when it comes to home maintenance. They've just set up a handyperson service to complement their remodeling business (see for a portfolio), so make your list, check it twice, and then contact them at 510-653-7288 or and they'll take care of it.

Mention my name and they'll take 10% off your gutter cleaning bill through September 30th. You know that deferred home maintenance can be the definition of penny-wise and pound-foolish, right?

The Buy vs. Rent Choice

Recently, a client I'd been working with for quite a while mentioned that he was thinking that he'd stay here in the Bay Area for 2-3 years, and then move away. Always paying attention to serve my clients' best interests, I said, "hey; we should rethink this home purchase gameplan, then."

We talked about what is known (and NOT known) about market trends for the next couple of years, for his locations and for his price point, because these can be very different than for other locations and price points. We talked about transaction costs--he had already seen my buyer's costs spreadsheet each time we've made an offer, unique for his city and purchase price, estimating escrow fees, city transaction fees, inspection fees, and homeowner insurance fees, among others.

But he wasn't thinking about these as transaction costs to be recouped, and definitely wasn't thinking about what the "seller net proceeds" sheet would look like when he went to sell--the brokerage fee, staging fees, and recordation costs. That is, between the 2% of costs to buy and 6.25% of costs to sell, excluding loan fees, and any surprise repairs and staging, he needs about 10% appreciation in the coming three years to make buying pan out.

While he hasn't yet made a final decision, I suggested that he take a look at two sites: includes an NPV analysis, allows you to enter inflation and discount rates, clearly reflects interest rate deductibility, and allows you to do the math over a range of periods ("what if we move in x years? y years?"). But doesn't seem to reflect transaction costs--the not-insignificant costs of actually buying, and then selling, the house.

The New York Times has a nice tool which DOES allow you to including these figures if you go to the "advanced" menu (and who wouldn't, given that the basic menu leaves so much of the analysis out??). See

I can't tell if the New York Times site reflects the deductibility of your mortgage payments--it references "owner fee" deductibility, just under the HOA fee field, leading to confusion. While there are many who would argue that one shouldn't make choices based on tax effects ("I'll buy lunch for everyone because I can claim it as a business expense!" Not!) there's no doubt that the net cash flows change depending on your tax bracket and so on.

So if you're on the fence about buying vs. renting, take a look at these buy vs. rent calculators!

What I've Been Up To--

This quarter, I've closed all my transactions (it's not uncommon for deals to fall through these days!), assembled market info for clients trying to decide how best to meet their real estate goals (should we sell now or later? Buy first and sell second?), wrote ''green real estate'' stories and the quarterly market update for the Piedmont Post, pulled together comparative market analyses for clients seeing reductions in home equity lines, advised clients thinking about large or small renovations, provided on-the-ground insight to national housing advocates regarding how efforts to moderate the financial crisis were really working, was a guest speaker on a national ''webinar'' on upscale marketing strategies for the Institute for Luxury Home Marketing, helped the friend of a friend buy a home, notarized documents for clients, brought coffee to the monthly Piedmont High School Parents Club meetings, gave neighbors my list of five excellent mortgage professionals, and provided the champagne for the PAINTS Birdhouse Gala.

The job of a realtor has changed dramatically in the last year. We need to be up on new regs from Fannie Mae, Freddie Mac and FHA; we need to keep a calm head, comfort our clients, and work well with our seller side-colleague when the lender asks for another appraisal the day we're supposed to remove our contingency; we need to cajole homeowner association managers to fill out forms they've never been asked to fill out before, and probably research title records for the answers so the transaction will continue forward; and we need to help our clients get beyond the emotion of the moment and agree to make one more counter offer hoping to get an agreement.

So don't be shocked if your broker's jaw drops if you ask about reducing a brokerage fee down to 4%, arguing that there are so many licensed agents out there and so few sales to be had.

The workload is heavier, the requests for ''free'' help are more numerous, and solicitations for community donations more important than ever.

(But remember that for the last several years at our price point, the vast majority of sales involved a 5% brokerage fee, rather than 6%, unless your representative pays for staging.)

Non-Profit Plant Sales!!

I missed the great article in Bay Nature magazine recently about area plant sales. They have a great web resource with links to the non-profit organizers, however, and most organize several sales per year. So click through and see who's got a sale this weekend!

Home Price Declines Moderating--NYT--It Must Be True!

Click here for the cool graphic I've been including in the last few updates of home price trends in 20 metro areas, based on the Case-Shiller Index. Those curves are pretty consistently trending up--roughly what I'm seeing on the ground in this market. And these figures are through the end of April. They buttress a piece on price trends in yesterday's New York Times.

Repaint the House

We repainted our trim in Piedmont not long ago (now have a Warm Brick thing going rather than Forest Service Green). The brown paint for some trim and the gate has a touch of red in there, which feels like Mexican mole sauce if you stare at it long enough. Yum!!

If a paint job is in your future, read this story from HGTV, and think about calling Angelisse Karol for consulting (ask me for her contact info) or maybe stop by Scout Hardware in Temescal near Donya Tomas. Scott Silvera held an evening info session a few months ago on the topic, and sells zero VOC paints for exterior applications.

Put September 15th on Your Calendar Today!

That's the deadline for submitting an application for a downward adjustment in your property assessment (resulting in a reduction in property taxes). Two great resources are:

--the county assessor's site, which includes all the forms and deadlines, and

--this video from the state Board of Equalization, which walks through the process piece by piece.

Remember that only your ''Prop 13'' property tax will be affected by a reassessment; the other charges on your bill (for instance, city and school parcel taxes; and 911, East Bay parks, library bond payments) won't decline. And if you, like we, bought your home a dozen years ago, your assessment is unlikely to have increased in the intervening years to current market value, much less to higher-than-current value.

I'm happy to run comparables for you to build your case, or to see if an appeal is worth it; just ask.

This is likely to be the first year that Piedmonters have a prayer of arguing for a tax reduction, given that prices had not yet dipped by January 2008 (this year's assessment is based on Jan. '09 value). Let me know if you were successful last year!

Market Downturn Hits Piedmont Market

2Q09 Market Update

After several years of steady prices (sales prices had been quite flat at around $600/sf since our market peak in November of 2005), and a winter and spring of very few sales and prices all over the place, this spring market makes the market direction clear: Prices are down as much as 16-18 percent compared to a year ago (see detailed spreadsheet at the bottom of the page).

I think our market has been affected by several factors unique to our high-end market. First, market distress has been focused below our price range, but those sellers are our move-up buyers. If they are having trouble selling, they have trouble turning around and buying. This pattern applies to less-expensive homes in Piedmont as well--their owners were very frequently the buyers of more-expensive homes in town.

Second, Piedmont buyers are often in law, finance, and corporate management, and each of these sectors is under great stress in today's economy. If high-income colleagues are being laid off, is now the time to commit to a Piedmont home and a hefty mortgage?

And third, Piedmont homes typically involve large mortgages, which are much more difficult to secure these days. Even if a buyer had a 50% downpayment for a $2 million home, securing that million dollar mortgage is not a piece of cake (but definitely can be done!).

There are plenty of reasons to buy in Piedmont, however, and these are arguments I lay out every time I market or hold open a Piedmont home:

--Props B+E passed, securing funding for our great schools and insulating them to a large degree from the state's budget woes;

--our free public schools offer great alternatives to private schools and their perennial inflation increases;

--our 911 services are exclusive and just a few blocks away, so no need to worry how long an ambulance will take to respond to a heart attack;

--our ''it takes a village'' lifestyle is very comforting to many; and

--our Census-tracked demographic mix (everything from typical commute times, to proportion of working moms, to ethnic and racial diversity) is more attractive to many households than similarly high-end communities through the tunnel, for instance.

Clearly, these arguments have traction. Our home prices have fared well by comparison (meaning in part, that if you purchased last summer, your investment here did better than your old home elsewhere would have). Average prices for homes in Alamo and Blackhawk sit at $376/sf for 2Q09 (a 34% decline from 2Q06), compared to $509/sf for all of Piedmont's market this past quarter. And the number of successful sales is down 55% in those towns, compared to our sales, which are down only 25% compared to 2Q06.

Looking only at Piedmont, the average home price was $1.401 million this past quarter, compared to $1.714 million for 2Q08 (based on data from the MLS). On a per square foot basis, the average, as noted, is $509/sf for 2Q09, compared to $605/sf in 2Q08. Homes are selling in an average 38 days, and a few more homes sold this last quarter, compared to the second quarter of last year.

Not too bad when placed in national context (see next post) and in light of the highest unemployment rate in a generation. Looking regionally, prices in Oakland were up 14.1% in May compared to April (but down 63.6% compared to May '08 [we saw a sneak preview of May data recently at the Oakland Assoc. of Realtors]); those in Alameda County more broadly were up 6.1% in April over March (but down 25.1% compared to April '08); and those in San Francisco were up 7.7% in April over March (but again down 23.2% compared to April '08).

Overall homeowner affordability is up dramatically in California compared to the recent past--moving from a point where only 25% of homes were affordable to someone with a median income in the state, to very near the national average of 70% affordability.

For information about reassessments and property tax reductions, read on-----

How 'Bout those Water and Energy Savings?

Recall that we've installed a number of energy- and water-saving devices in the last year or so (I write as the floor refinishers are getting to work--the end is in sight!).

The tankless water heater went in a couple of years ago, and the attic insulation was installed almost exactly a year ago. But the low-flow shower heads and faucets, and two-flush toilets; the auto-on and auto-off light switches and the LED or flourescent lights; the gas fireplace replacing one of the wood-fired ones; the low-VOC paints and high recylcable-content tile--that's all in and the asbestos is out. The utility rebates are in the bank, or, in the case of EBMUD, sitting as a big credit in our account.

The bottom line on the water and energy bills: Since mid-January, our water consumption is down 25% compared to a year ago, and for the first three months of this year, our PG&E bill was $650 less. We're still working on unplugging those computers!

Call or email if you'd like referrals for great color and design advisors, woodwork strippers, cabinet refinishers, painters, countertop installers, floor refinishers, plumbers, tilers, dry rot repairers, window replacers, asbestos removers and heating installers.

The team, led by contractor Bruce Paoli, did really wonderful work. And because we used scrip to pay for much of the materials, the Piedmont schools benefited as well. Ask me how to do that!

Think College Now.

If you haven't given to the Piedmont Annual Fund or the Piedmont Ed. Foundation, now's a great time to do it (and while you're on the Ed Foundation site, sign up for the Docter family special preview of Pixar's new film Up on May 2nd). If you want more info on Piedmont school funding, click here.

And if you want to help compensate for cuts in state funding in communities that don't have parcel tax funds and major donations to turn to, consider a donation to Think College Now.

TCN is a public elementary school in Oakland’s Fruitvale district with a focus on college prep. Both Pacific Union and I have been major donors for the last couple of years. Beginning in the kindergarten classroom, TCN is determined to give its students – 91 percent of whom are low-income – the same opportunities available to kids in communities like Piedmont. The school is succeeding – it was one of three Oakland schools to win a California Distinguished School Award in 2008 – but doing so against great odds. Faced with severe state cuts, TCN's already tight budget stands to take a $150,000 hit next year--for that single school alone. These cuts endanger the very things that distinguish this amazing school: dynamic after-school music and art programs, field trips, and small, personalized class sizes.

If you'd like to attend the auction/fundraiser this year, scheduled for Thursday May 7th at the Piedmont Community Center, email me. If you'd like to make a donation, click here. The teaching team, and the kids, really need our support.

Another Cool NYT Housing Graphic

The Spouse saw this one--it tracks the rate of increase in housing prices over time on a national map in a red-for-hot and blue-for-cold fashion. See it here.

Case-Shiller Indices for Top-20 Cities

Here's the link--

Some MLS Insights

No brokerage represented more sides in the Piedmont market last quarter than Pacific Union. When representing sellers, we offered accurate pricing advice and strong negotiating skills--our sellers garnered sales prices very close to their original asking prices, and sold in about half the time compared to the competition. That's what you pay your brokerage firm for.

Houses that stayed on the market for more than three months sold for an average 20% off the asking price. If you have all the time in the world, go to the competition. If you want to sell your house, come to me and the Pacific Union team!

Need Notarization? Save the Date--April 29th

Need Notarization? Save the Date--April 29th
Well, the kids are going overseas for break with The Spouse, so I need to get one of those permission letters notarized. For the godmother of a friend last week, I went down to Hayward and notarized documents that had originally been drawn up in 2004--and were just waiting for a notary (we hope before the serious life event). You've got some of these hidden away? Bring them out and come over to my house on April 29th starting at 7 pm for free notarization. Email me to let me know you're coming.

How Much is the Piedmont Location Worth?

Buyers love Piedmont for a variety of reasons: its great schools (#68 in the nation according to US News and World Report!), close-knit and diverse community, easy commutes, proximity to all the City and East Bay have to offer, our locally controlled and delivered city services.

In fact, for an average 3-bedroom/2-bath home, buyers were willing to pay $324K more to live in Piedmont in 2008 than just over the border in Oakland 94610,11, and 18. This figure has varied between $350K and $320K over the last several years, even as home prices rocketed up. Lots of clients ask me how they should think about the extra price, relative to Piedmont's great schools.

Buying a Piedmont house involves an investment; buying private school in Oakland is an expenditure: You get the Piedmont investment back when you sell the house. Buyers pay $324K more, but in exchange, they break even on a nominal basis in the second year with one child in school (that is, added mortgage and taxes on an after-tax basis are less than the cost of typical tuition, with inflation, in year 2. And this excludes the fact that you'll eventually sell and get your investment back too).

Families gain $727,000 in net present value terms over a 12-year residency with three kids, including the eventual sale, compared to living in Oakland and paying for private schools (as I always note in discussions of this issue, thousands of families don’t have that choice. But for those for whom that is the choice, those are the numbers).

With drastic budget cuts facing neighboring school districts and the price of private school marching relentlessly upward even as Piedmont home prices drift down, now may be a great time for friends and family to consider a purchase here in Piedmont. Feel free to email me for a copy of the spreadsheet, and for access to my Piedmont Info website.

Annual Get Outdoors Plug---

Sibley's gorgeous right now (well, as soon as the rain lets up). Up Snake, left on Skyline about a mile. Bring the dog and follow other hikers. On a foggy day, it's just like Lord of the Rings.

The Oakland Rose Garden. Bring the computer and the kids to get work done while they nose around or look for frogs. Grand to Jean St. Then stop in at Ace Garden and ask Kevin Numoto (my landscape stager) or Wyatt Alt (my son) for help.

The Point Reyes Peninsula. Stop by the Inverness house on your way out for a nice hike and great views of the Pacific Ocean. We're there most weekends---

Piedmont Update, and About those Appraisals-----

Ten homes sold in the first three months of 2009 in Piedmont in an average 65 days, compared to 16 last quarter and 11 in the first quarter of 2008 (see details at the page bottom). The average price of a home was $1.867 million ($570/sf), a dramatic rise from last quarter's figure of just over a million. In contrast to then, nearly half of this quarter's homes sold for over $2 million. Two of the sales were REO or bank-owned properties, and most of the high-end homes had been on the market for several months.

Let's get real, though--it's folly to base conclusions on so few sales in such a small town. These homes included some that offered much more square footage than the tax record reflected, one whose buyers paid nearly $100,000 of the sellers' costs (I've adjusted that effective sales price in the attached spreadsheet), and several with fabulous grounds or major structural issues. What does average mean in that context?

Of more interest to me have been new developments on the appraisal front. A number of you have received notes from your home equity line lender reducing, freezing or even eliminating your line of credit. Our neighbors in the surrounding communities have been seeing these notes for the last several months.

In some cases, lenders are trying to get out of this market. In others, lenders happily go back to thestatus quo ante when you push back a bit with thoughtful comparables from your deeply experienced local realtor. In others, your current lender, or perhaps a new lender you choose, wants an appraisal before they'll up your limit again (and if you're right and the value is there, ask in advance that the lender pay for the appraisal).

On the appraisal front, beginning around April 1st, new rules went into effect strengthening the arms-length relationship among lenders, mortgage brokers, and appraisers. Among the myriad effects and implications is that appraisals for Piedmont homes are increasingly done by out-of-area appraisers.

I saw an appraisal last week that included a Piedmont-Side-of-Montclair (i.e. Oakland) home among the comps. A deeply experienced local appraiser says that with so few homes closing in Piedmont, and with lenders understandably super-sensitive about value, they are willing to trade off ''true'' comparability for recency. Thus, a '20s stucco home with lots of traditional detail in a great central location was compared exclusively with recently closed homes that all happened to be ranch style, and most were located up in the Montclair-Side-of-Piedmont area (i.e. Piedmont). One recently closed home in a great location across from a park in town did not ''appraise'' for its contract price, even though the highest of the three offers garnered with just one open house was (drumroll please....) at asking price.

Maybe the differentials among prices for older homes vs. newer homes, and homes on wide streets vs. homes on narrow windy streets, and homes with Bay views vs. homes without Bay views, and homes with easy walks to all schools vs. homes that require a carpool are just over the top. Maybe it is more about square footage. But these factors have formed the warp and weft of the Piedmont real estate market for generations. We may be at a flexion point in property valuation and things may go back to a new normal shortly, but for those purchasing now, refinancing to today's great rates, or trying to protect a home equity line, the situation is clearly driving many crazy.

I'll never forget talking to the mother of a parent at our child care center in Washington DC a dozen years ago. She'd grown up in Piedmont and raised here children here. We mentioned where we lived and she said, ''ah, that's a good street'' and went on to clarify why she thought that was the case, with remarkable specificity. She was thinking back to 1979.

One final note--our MLS has signed on for detailed market analysis from Clarus Market Metrics--email me if you'd like the Piedmont-wide trend graphics over the past two years and I'll send you the multi-page pdf document. If you get ready to buy or sell, we'll narrow down the analysis to your portion of the market to help in pricing or development of the offer.

Feds Create Two Mortgage Aid Programs

Ten days ago, the Treasury Department announced two housing programs for households having difficulty paying their mortgages. The programs target two different groups:

--those who could handle payments if only they could refinance to today's low interest rates, but can't because their first mortgage is more than 80% of the current value of their home, and

--those who need more drastic action--a modification to their loan terms--to stay in place.

The refi program is called Making Home Affordable and the loan modification program is called (drumroll) the Home Affordable Modification program. Both help only owner-occupants; neither will help those who realistically can't afford the house they own, even with near-term assistance.

The Making Home Affordable Program

To qualify for the refi program, owner-occupants must:

--owe no more than $729,750 in a first mortgage on the home;
--that loan must be owned by Fannie Mae or Freddie Mac (see this site and this site to see if Fannie or Freddie owns your mortgage);
--that first mortgage must be no more than 105% of the current value of the home (for instance, it might be $105,000, on a home now worth $100,000--until 3/4, your loan amount could be no more than $80,000 on a home now worth $100,000. That change in policy is huge.).

Because lenders already have most of the info they'll need to review a refinance request, it's assumed that the refi program will go into production very quickly.

A client told me recently that Countrywide offered a similar interest rate reduction after just a brief, proactive ''I don't have a problem now but may have one in the future; what should I do?'' call. And that was a month ago. I've heard estimates that a short sale or default typically costs a lender a minimum of $50,000, so a judicious refinance may create big savings over that possibility.

The program currently is scheduled to lapse in June, 2010.

The starting point is a nice step-by-step eligibilty tree here.

Home Affordable Modification Program

This is a bigger deal--the lender and the federal government together will split the cost of reducing the interest rate or the principal on a loan until payments represent no more than 31% of an owner's total income.

To qualify, owners must:
--be having difficulties meeting their mortgage payments (but don't have to be delinquent);
--must have a first mortgage under $729,750.

How it works:

If you qualify and can demonstrate hardship (through bills, tax returns, pay stubs with declining income, layoff notices, etc.), your lender will reduce your mortgage payment down to 38% of your total income. In turn, the federal government will further reduce it to 31% of total income. This lower payment will stay in place for 5 years, after which your interest rate will creep back up at 1% increase per year to today's rates (as if you refinanced today). The payment reductions are achieved through a combination of interest rate reductions, and, if necessary, amortizing the loan over a 40-year period rather than the usual 30 years.

Both the lender and the homeowner would get incentive payments if the modification takes place before the homeowner misses a payment, and if the loan, after modification, stays current. You may wonder about your second mortgage; you're eligible for either of these programs even if you have a second mortgage; lenders in the loan modification program get incentives for convincing the second mortgage holders to remove their lien (that is, forget the loan. Without this program, the argument goes, the second mortgage lender would lose everything anyway if there were a foreclosure).

Here is the Treasury summary of the program, and here is a step-by-step eligiblity tree. [This will now look familiar as I'm re-entering the links in 8/09; they've consolidated much of this material into one website.]

Borrowers with high debt loans may be required to undergo credit counseling.

This program is scheduled to lapse in December, 2012.

The government factsheets are emphatic that borrowers should NOT need to pay for consultant help for either of these programs. A list of Oakland area HUD-approved housing counseling agencies can be found here. The feds urge that you be patient in pursuing either of these remedies--they estimate 10 million households will be helped by the two, but I imagine many more households will be applying, asking questions, and tying up the line.

If you think neither of these programs is likely to be helpful for your circumstances, call me (and then call your accountant or tax professional) to discuss the idea of a short sale. In a short sale, we assemble a detailed package of material for your lender, put your home on the market for its current market value, sign a contract at close to that price, and then work to convince your lender(s) to absorb at least a big chunk of the amount outstanding on your loan(s). This is an instance where all my experience running federal mortgage programs in the Clinton Administration comes in very handy!

It's a complicated process, particularly if you have both a first and a second loan (and thus two lenders to negotiate with). However, we've heard of short sales involving hundreds of thousands of dollars in concessions on the part of lenders in the East Bay Hills.

I probably sound like your mother when I say it may make more sense to get going on the process rather than avoid it for a few more months, and live with the stress.

As always, let me know if I can help, or if you want to talk through some options!

And What'ya Gonna Do in that Remodel?

And What'ya Gonna Do in that Remodel?

Here's a list of lists from Realtor magazine, based on input from industry and trends specialists:

Rehab Must-Dos--

-Universal bath design--roll-in showers and decorative grab bars;
-A storage-rich kitchen island;
-A sealed shower with multiple shower heads;
-Stainless steel appliances.

Kitchen and Bath Features Buyers Want--

-Separate shower enclosure in the master bath;
-Eat-in Kitchen;
-High-end appliances;
-Granite countertops;
-Kitchen island.

Retrofits Buyers Love--

-Tile a backspash;
-Add undercounter lighting;
-Paint upper kitchen cabinets;
-Add glass doors to some upper cabinets;
-Change out cabinet hardware (Expo's having a 30% off sale now!).

Well, Then; Save Money on Taxes

A nice little reminder of new credits (including the first-time homebuyer tax credit) and tax-saving opportunities is at this IRS site---

While the NYT is Figuring out Its New Business Model--

Their web geeks developed this cool, if thought-provoking and intimidating, graphic to convey the trends in 20 metropolitan housing markets. Take a look and click through the cities.

2008 East Bay Market Update--Are We Done Yet?

While the Piedmont market has weathered the national real estate bust remarkably well, we're not immune from the pressures swirling about us, as recent data illustrate.

Through 2008, the average price of a Piedmont home settled in at $1.575 million ($583/sf), down about 3 percent from $1.62 million ($612/sf) in 2007. The typical home sold in 26 days for just a bit below the asking price.

The number of transactions, 76 through the year, was down 30 percent compared to last year (and down 40 percent compared to 2005's peak). By themselves, fewer sales wouldn't necessarily affect buyers' and sellers' outcomes directly. But they directly affect the City's transfer fee income (we've seen roughly $55 million less in dollar volume this year compared to last, according to Multiple Listing Service statistics), and they certainly reduce the net income of real estate agents, stagers, title companies, and fix-it-to-sell contractors. As is the case across the roiling economy, strong market players will increase market share; weak ones are already out of business, and will realize it soon enough.

We saw a slip in home prices in the third quarter of 2008-down a bit on a price per square foot basis from the $600/sf that's been the norm for a couple of years now. The fourth quarter, however, saw a slide in average prices (as well as median prices): The average home sold for $1.085 million ($512/sf), compared to $1.69 million in 4Q07. Real estate markets, ours included, have been hit from many sides-unexpected unemployment, dearth of financing for high-end homes, declining equity making move-up buying more difficult, and a general inclination to sit out the chaos on the sidelines.

Of the 16 homes sold last quarter according to the MLS, only one home sold for over $2 million (three more are currently pending), while 13 sold for less than $1.4 million. Homes that did sell went quickly-in an average 19 days on the market.

You might think, "well, maybe only small homes sold this quarter." But in fact the average size for both 4Q07 and 4Q08 was 2600 sf. Perhaps more long-held homes in need of updates sold this quarter, partially explaining the drop in prices. Fundamentally, however, there's no doubt that some sellers are holding their homes off the market in hopes of better conditions, while buyers are postponing plans in case the market and economic conditions further deteriorate.

A big contributor to the trends is the shortage of financing for high-end buyers. As discussed last quarter, financial institutions have pulled way back on their willingness to extend credit for real estate. In response, the federal government created an emergency facility to buy home loans of up to $729,000 through the end of 2008. Lenders relaxed, knowing that they could offload these loans from their books with ease, but rarely would extend credit for the typical Piedmont buyer, who might have $500,000 in cash but still might need a $1.1 million loan. Complicating matters for high-end buyers, that loan limit declined to $625,000 on 1/1, and buyers needing more than that are having a hard time getting credit, or are paying high rates to secure it, or both.

Outside of our immediate market, the news is grim. Throughout the entire East Bay, 71 homes sold in the fourth quarter for over $1.5 million, our average sale price for 2008; there are 146 currently on the market, and nearly seventy over-$1.5 million homes have come off the market this quarter.

The Oakland market continues to be driven by bank-owned ("REO") homes, and by homes likely to sell for less than is owed on the property ("short sales"). Toward the end of the year, upwards of 80 percent of homes going into contract under the $500,000 price point in Oakland fell into one of these two categories, and a surprising proportion of more expensive homes were distressed as well. Median sales prices in Alameda County were down 37 percent while those in Oakland were down 60 percent between November '07 and '08.

The number of home sales in Berkeley is off by about 35 percent in 4Q08 compared to the same period last year, and prices are down about five percent. Substantially more homes came off the market in the last quarter as sold during that window.

San Francisco finally lost its immunity. Median prices there dropped 19.8 percent between November 2007 and November 2008 according to the CA Assoc. of Realtors (they'd dropped less than eight percent in the year ending June '08). A startling graphic in the New York Times over the holidays (see related story for a link) indicated a 31-percent drop in home prices between October '07 and '08 in the San Francisco Bay region (compared to an 18-percent drop among 20 cities across the country).

Fundamentally, the functionality of homes in the Bay Area has not dropped by 20, 40 or 60 percent. But the prices garnered by those who had to sell in recent months declined dramatically. Many of these desperate sellers are the same lenders we still look to for our real estate financing.

So what's next? Who could know? Who could have thought that the stock market would have declined so abruptly? Policymakers in Washington and around the world are furiously attempting to stem the tide, inject trust and confidence in markets, and avoid a downward spiral in the economy. The rate of price declines in a number of the worst-hit metro markets appears to be slowing, so perhaps the bottom of the curve is near.

At the end of the day, a home is a hard asset that can shelter you and yours for many years to come. And that is worth a lot.

How Much is an Update Worth?

It's that time of year again--the Cost vs. Value report is out. Each year Realtor and Remodeling magazines jointly pull together a metro area-by-metro area analysis of the cost of various improvements (add a deck, upscale kitchen renovation, basic bath renovation, etc.) and their relative worth if/when the house were to go to market.

Nationally, owners should recoup about 2/3s of the cost of their investments, across improvements and across regions. As you get closer to the Bay Area, though, the ratio improves, and, if you believe the numbers, goes positive for most improvements in the Bay Area. As has been the case in past years, "midrange" remodels pencil out more positively than do "upscale" remodels, though note that in some of our neighborhoods, buyers will frown if they feel a remodel was done with shortcuts and budget-savings paramount in mind.

Read the national report here, and email me (Kennedy@MaureenKennedy.Net) for a copy of the San Francisco Bay-specific results.

Sea Ranch--Great Second Home Destination for the Bay Area!

Our own Patty Brown once again gets in right in a Travel section cover story in the Sunday Times on Sea Ranch. Read it here, and contact me if you're interested in linking up with a great realtor up there (or in other area 2nd home destinations---).

Interim Piedmont Update

Let me start out by saying that it's VERY hard to draw hard conclusions from the nine transactions that have closed since the first of October.

Some good news--No major banks have failed in the last few weeks. Several of the largest lenders have recently implemented foreclosure moratoria (maybe not good news for someone hoping to pick one up next month). Open houses are seeing more visitors these last two weeks. The number of homes going into contract in the East Bay Hills has increased over the last several weeks. Four homes are pending in Piedmont; three went into contract within 19 days on market and two of these are scheduled to close after just two or three weeks in escrow. Zoom zoom zoom. I heard NPR do a story this a.m. wondering if the market is turning. Moreover, we're now seeing loans in the over-$729,500 realm for well-qualified buyers purchasing homes with sizeable downpayments--not the case for the last couple of months!

The numbers say that:

1. Nine homes have sold since 10/1, compared to 16 in the same window in '07, 11 in '06, and 21 in '05. Nothing new there--we knew that the number of sales was down nearly 50% from last year---

2. Those homes that sold, sold quickly--in an average 17 days on market. Buyers are very focused and quick to act when they see value, and sellers aren't taking chances or waiting around. The average price per square foot was about $500, but these were mostly less-expensive fixers--one larger, beautifully located and cared-for home sold for a bit over $700/sf, and for over $2 million. I'm not comfortable suggesting a decline in average prices beyond the 5% or so drop from our late 2005 peak that cropped up in last quarter's numbers.

3. The 25 homes actively seeking buyers have typically been on the market for 54 days and many have seen price cuts. Their current average price is $588/sf (still a tad above last quarter's average for sold homes), but four are hoping for upwards of $800/sf or more. Five are distressed--already owned by banks, or the owner is likely to be short of funds to close, meaning the lender(s) must agree to ''eat'' a portion of the outstanding balance [realtors are required to disclose this fact in the MLS now]. Seven homes have come off the market since 10/1. This is a noticeable increase, and suggests frustrated sellers and/or those who don't have many degrees of freedom for price cuts.

4. While seven out of the nine homes sold recently cost less than $1.5 million; half of the active homes started out at over $1.5 million. Maybe buyers feel more confident in these uncertain times with less expensive purchases or maybe the shortage of financing and anticipated bonuses is taking its toll at the high end.

So, the bottom line is that our market is in much better shape than surrounding areas (85% of newly pending transactions under $500,000 in the ''inner'' East Bay last week were distressed), and serious sellers are still finding serious buyers for their homes along the price spectrum. As households move to reduce discretionary expenses, I imagine we'll see more demand for the great schools that go along with a Piedmont purchase (if you have friends or colleagues thinking about a private school to public school move, ask me for the link and password to my Piedmont Information site. Among many photos, links and factoids, it's got links to all the key PUSD backgrounders as well as a net present value analysis of a Piedmont purchase (with Piedmont schools) vs. an Oakland purchase just outside our borders (and private schools). And of course I'd love to assist anyone you know as they plan an East Bay purchase or sale).

When's a Jumbo Loan a Jumbo Loan?

Don't forget that starting Jan. 1st, loans in our metro area over $625,500 will be considered ''jumbo'' as to rates and terms--the federal agencies will reduce the maximum loan size they are willing to purchase from area lenders by about $100,000 from that emergency/temporary figure of $729,750 established back in July. Organize any refis or new purchases that will need a loan in that $625-$729K range before 12/7 or 12/15 at the latest to make sure the loan closes before the jumbo definition changes!

Kennedy Wins National Real Estate Marketing Award!

Here's the release:

Maureen Kennedy Recognized in

National Real Estate Marketing Competition

Maureen Kennedy won the coveted Overall Excellence in Personal Marketing award at this year's exclusive Leaders in Luxury conference in late October. Judged by Lisa Waldie of Dallas-based Brand Agent advertising and branding firm, the competition included submissions from among the roughly 100 meeting attendees, all members of the prestigious Institute for Luxury Home Marketing.

Entrants from across the country submitted material on their property ads and collateral material, blogs, websites, honors, media efforts, and logos, and were judged based on quality, creativity, and appropriateness for the luxury niche.

"Kennedy's approach to marketing crafts an individualized plan customized to each unique situation and client. Her stated core principles of Listen, Inform, Analyze, Market and Close communicate the very essence of successful luxury marketing. The result is a brand personality that is both unique and appealing to potential customers," said Waldie.

According to Kennedy, "Attendance at Leaders in Luxury is important to an upper-tier professional's success. By networking with the best in the business, sharing ideas, and learning about the latest trends and outlooks, I can help my affluent clients find success where others are finding challenges. It's a real honor to receive this award from among such an elite group of agents and brokers."

Kennedy, a Pacific Union agent in the Montclair office, is a licensed real estate broker. She was selected earlier this year as one of 50 Realtors on the Rise by Real Estate magazine, an influential national industry magazine. Kennedy also organized a session on Eco-Brokerage in the Luxury Market for the Leaders in Luxury meeting, held this year in Miami.

Hosted annually, Leaders in Luxury is an exclusive, invitation-only educational and networking opportunity comprised of real estate agents who work in high-end markets nationwide. The sponsoring Institute for Luxury Home Marketing, based in Dallas and founded by Laurie Moore-Moore, is the premier training and membership organization for luxury home real estate professionals internationally.

Since 1975, Pacific Union GMAC Real Estate has thoughtfully matched generations of buyers and sellers throughout the entire Bay Area. It is the only firm in California to receive a distinguished four-star International Property Award in association with CNBC Europe and the London Daily Mirror for superior marketing materials and client services in the luxury marketplace. A premier, locally managed brokerage with deeply experienced real estate professionals, Pacific Union GMAC applies cutting-edge technology to enhance the client experience.


Saving Water for the Garden

Saving Water for the Garden
I remember years ago, when I was running Redefining Progress in the City, a rep from Tree People in LA came calling. Sounds very crunchy, I know, but he made a key point that I've remembered ever since: We in California get gobs of rain in one season and none the rest of the year. What if we could store that rain conveniently, and use it through the year for outdoor needs?

The New York Times has caught up with the topic. In July it published a story covering this exact issue. The piece outlines how to go about collecting water efficiently, and makes the point that while you won't save much money (water is still one of those resources that's almost ''too cheap to meter''), you'll avoid using precious drinking water for irrigation, and you'll divert storm runoff from the regional sewage treatment system (too much of our storm water still comingles with sewage!).

This Old House had an article a while ago (click through the photos for some good info) and just last month on water collection systems.
Remodeling Workshop
Last night I headed over to the Rockridge Library to participate in a remodeling workshop organized by Amy Hutton of Winans Construction. Amy did a fabulous job outlining how best to get from the beginnings of a vision to the completion of a project. We talked about perils and pitfalls as well as how the relationship should work if all team members are hitting their stride. ''Cost-plus'' vs. set-price bids, how to think about change orders and who pays (other than that they should be rare if the scoping out and planning's done well), how permits and soils engineers fit in. Amy's a woman who knows her way around a Gantt chart and the critical path!

If you'd like a pdf version of her How to Make your Project a Success powerpoint presentation, email me, and the first to ask for it gets a copy of the 70-page Home Remodeling Green Building Guidelines from Build It Green.

3Q08 Piedmont Market Update

For months I've been describing trends in surrounding areas of the region, state and nation--declining median prices weighted down in part by short sales and ''real estate-owned'' properties in many markets, tightening mortgage standards at all points of the income and property price spectrum, and so on. Overall, there's been a comforting ''flight to quality'' effect for Piedmont in particular and Berkeley in general. These markets have stayed quite strong.

Finally, we're starting to see some shifts in our own backyards driven by the same gale force winds blowing through the economy and the markets. So far, the changes are affecting the way purchases close rather than the price at which they close.

While higher-end buyers are used to purchasing their new homes before selling the beautifully staged and now vacant old home, that's all but impossible now, if the new house requires a loan--the lender on the new home wants that old home safely off the books or firmly rented out before putting their funds on the line. And financing for mortgages above $729,750 is quite difficult to secure. Both factors make buying and selling more complicated, and more buyers--and sellers--are sitting on the sidelines, exerting downward pressure on the market.

As recently as the summer, buyers of million-dollar homes could purchase with perhaps 20 percent down, easily borrowing the balance of $800,000 and above. Today, Fannie Mae and Freddie Mac will purchase loans from banks up to $729,750 [through December in our high-cost area--the maximum then drops to $625,000 if current law sticks]. Securing a loan up to this amount is a no-brainer for a well-qualified borrower (because lenders can sell these ''conforming'' loans on the secondary market). Above that figure, life gets difficult. Lenders must hold those larger loans in their own portfolios--there are no loan ''buyers'' out there willing to purchase them anymore.

Why is that a problem?

With the value of their holdings dropping overall, lenders' capital ratios--the regulator-required ratio of relatively liquid assets to outstanding loans--only gets worse with each new loan they fund and hold. A small number of lenders is still in this space, but they are very picky--given the chance, or a good excuse like a late payment on the credit report, they'd rather take a pass on your buyer's million-dollar loan.

A few months ago, the buyer of a $1.6 million home might have needed a minimum $160-$320,000 in cash, and it often came in the form of a home equity draw-down from their other home. Today, that same buyer might need $870,000 or so in cash ($1.6 million-$729K=$870K)--two or three times as much.

That's a big change!

As a result, we're seeing a bar-bell market--brisk sales in the under-$1.2 million market, where move-up buyers arrive with sizeable equity and a $729K loan, and again in the over-$2 million market, where the options- and bonus-driven buyers typically dwell.

I think the market hasn't caught up with this new reality, leaving great homes, sellers itchy to move, and very strong buyers on the sidelines.

In this market, buyers need their cash in hand, a local agent who can steer them through these shoals, and a relationship with a reliable local lender. Sellers might offer a private loan to close the gap between their buyer's strong downpayment and their $729K loan.

For instance, let's assume you're selling a $1.9 million home. You have three buyers, each with $1 million in cash--50+ percent down! One can borrow $1 million or more from parents--but if there's no competition, s/he thinks $1.8 million should get the house in this market. Two can borrow $729,750--they are fully prepared to offer their maximum--$1.729 million--but they think the house is objectively worth $2 million.

Wouldn't you rather have three buyers competing for the house, resulting in a $2 million sale price?

If you have an extra $275,000 in equity after owning your home for 20 years, you could make that happen by offering private financing, perhaps with some nice tax benefits associated with deferred capital gains. The private loan market is quite well organized these days, with third-party firms handling the paperwork and reporting. We've covered Circle Lending, a private lending support firm, in the past; they've been bought by Richard Branson and are now Virgin Money (see this link for more info).

In this complicated market, the path to selling success involves thoughtful and incisive pricing and positioning advice, as well as proactive engagement with potential purchasers' agents on creative possibilities you're up for, such as seller financing.

Any agent with good contacts can help you get your home in top shape and beautifully staged. All should be hiring professional photographers to portray your home's best assets. Most, with insight from you, can describe in words and pictures your home's advantages--the benefits of living there, not the eye-glazing list of features it and most other homes on the market have (don't get me started on this . . . ). Those who are web- and tech-savvy can reach and engage with your likely buyers, who are most likely to find your home on the web these days. (By the way, they read the New York Times or the Chron on-line at 11:30 the night before--they're not waiting for it to show up on their front walk in the morning, and they're definitely not reading the ads in the paper.)

But it's the pricing, positioning, and negotiation expertise--together with boundless energy and a positive attitude--that will bring a transaction to close in this complicated market.

Moving on to the numbers, 27 homes sold this quarter (compared to 20 during 3Q07) at an average $564 per square foot. They ranged in price between $5.9 million and $780,000, and sold in an average 30 days. Compared to the original asking price, sales prices varied between 120% of asking and 60% of asking, with most in the 90-103% range. (See the spreadsheet below, and note that these are 3Q08 transactions reported by the MLS through this 10/1.)

Looking only at the eight transactions closed since the beginning of September, they too ranged from the high end to the low end of the price spectrum, suggesting normalcy. Strikingly, however, no homes priced between $1.2 million and $2 million closed. Last year during this 3rd quarter period, half the closings were in that middle range. A real opportunity for sellers in that price range!

While the average price is quite similar to what we've been seeing in this market for the last couple of years, this is the first quarter in which we've seen a drop below the average $600-$610/square foot pricing plateau.

At the same time, yesterday's news was that the Case-Shiller Index suggests a slowing rate of price declines nationally--maybe we're getting to the trough--a good time to step away from the sidelines? And recent data from the state and region also see a slowing in the rate of decline. We're certainly seeing a large quantity of distressed property making its way through the system, and into the hands of proactive buyers and investors.

So what are the take-aways? First, remember that a home purchase is a long-term investment, with ups and downs in value to be expected, although recent swings are unprecedented. Second, remember that a home shelters life. That is, it surrounds and supports your lifestyle, your community relationships, your family. It's not just an investment. Third, if you're concerned about a looming interest rate adjustment in your future, talk to your mortgage broker, and ask me for names to get a second opinion. Fourth, if you'd like more stats and market insight, email me for a copy of the CAR economist's recent powerpoint deck on the East Bay and statewide market--Leslie Appleton-Young did a great presentation last week!

If you're a longtime homeowner thinking about a sale soon, seriously consider offering seller financing--it make offer a path to a higher sales price for a committed buyer. And if you have any questions, feel free to call anytime!

50 Realtors on the Rise

50 Realtors on the Rise
You may have missed the announcement in August that RISMedia named me one of their national 50 Realtors on the Rise. They discuss each winner in greater detail on a day-by-day basis through August and September; here's the link to the early-September blurb.

Your Property Tax Bill---

I received a call from a client from last year asking about the forms to request a reassessment from the County Assessor's office (see the Assessor's site for a fully functional explanation of this process). She was pleased when I ran a Comparative Market Analysis to show her that her purchase in Piedmont had likely not lost value, despite all the gloom and doom in the local and national papers.

Today, however, I was prepping to meet with clients who purchased their home a couple of years ago, and noticed that the Assessor appeared not to have included the owner-occupant exemption in the tax record. It's not a lot of money--essentially your assessed value is decreased by $7,000 if you are an owner-occupant and file appropriate forms.

To check your record, just click on the link above, click on the link to view your record, enter your address, and scroll down to see if your exemption is listed at the bottom. If not, call 272-3787 and ask the office to send you the appropriate homeowner exemption request form.

Pacific Union--"Best Real Estate Firm in California"

Often, it's all about the agent. But the firm an agent affiliates with truly matters as well.

Americas Property Awards [Americas as in "this is an international competition, but here we're talking about all North and South American firms"] announced last month that Pacific Union had won its Best Real Estate firm in California award for 2008. The prestigious award is organized in association with The New York Times, CNBC, and a range of international real estate leaders. Maybe most importantly, in both 2007 and 2008, Pacific Union won the four-star International Property Award for providing best marketing and services in the luxury marketplace. This year, the firm also won the Extraordinary Philanthropist award.

And speaking of firm affiliations, you might have noticed that Montclair Better Homes has become a Sotheby's affiliate. Pacific Union is a Christie's Great Estates affiliate, and all our high-end listings are marketed through the national and international Christie's networks (agents, magazine, website, newspaper ads and so on). This international reach brings your buyers in from across the country and even across the world. Christie's Great Estates is a larger and more international firm than Sotheby's, and its average listing price is nearly twice as high--$3.7 million compared to $1.6 million. Christie's Great Estates also continues to be owned by the art auction house, while the Sotheby's name has been sold off by that auction house.

Life Insurance Policy Updates?

I get a nice newsletter from James Applegate, a MassMutual insurance rep (415-420-9505). His most recent one included a useful set of four check-in/update questions you might ask yourself or your insurance agent. I have to admit, we set up life insurance shortly after moving here and I haven't thought about it much since, so this was a good reminder:

-Research and provide the actual length of time current insurance policy death benefits are guaranteed to last, whether to age 60, 99 or in-between.

-Is my current insurance premium based on the new U.S. Mortality Tables, which lowered costs for many people?

-Should I exchange my current policy, with loans on it, for one with no loans?

-Do I need a beneficiary change form to reflect changes in my life (grown children, grandchildren, spousal or other life change, etc.)?

Remodeling Workshop Coming Up in September---

MB Jessee, the professional painters, organized a nice event for local "green" professionals last Friday. They are on top of the low-VOC ("volatile organic compounds") movement, and Maya, their marketing director, is reaching out to network with other eco-friendly professionals. At the event, I met Amy Hutton of Winans Construction. She's a CGBP (certified green building professional--remember . . . .) and is organizing a free seminar at the Rockridge Library, 6-8 pm on Tuesday, September 30th.

She'll cover what to do and what to avoid to make your remodeling project a streamlined, lower stress effort. She's happy to answer questions about your thoughts and plans.

And don't forget that I'm happy to take a look at your blueprints, refer you to various remodeling professionals, or talk about cost vs. value tradeoffs. Just call or click anytime.

Kennedy Wins Prestigious National Realtor Award!

Kennedy Wins Prestigious National Realtor Award

Maureen Kennedy


` Kennedy@MaureenKennedy.Net

Maureen Kennedy Selected as One of Top 50

Realtors on the Rise Across Nation

East Bay real estate broker Maureen Kennedy of Pacific Union Real Estate-GMAC was selected as one of the top 50 Realtors on the Rise nationwide by RISMedia's August 2008 Real Estate issue. Kennedy is the first San Francisco Bay Area winner in the program's four-year history.

Highlighted as a quick study, the magazine cited Kennedy for her commitment to affordable housing and involvement in housing policy, as well as for her sales and marketing accomplishments.

"I'm pleased to be the first Bay Area winner of this prestigious award," said Kennedy. "I've been successful at bringing together my commitment to customer service and my understanding of our unique market to advance the interests of my clients. And in this market, we need to be tech savvy because our buyers and sellers are. It's great to get this national recognition from such an influential source."

Now in its fourth year, the Realtors on the Rise competition honors 50 of the industry's best and brightest. All have entered the market within the last five years. Each nominee was required to submit a one-page resume and 500-word summary of accomplishments. These were then judged from among hundreds of entrants from across the country on their overall success, incorporating today's best practices in sales and marketing, customer service, use of technology, business savvy and negotiation prowess.

RISMedia's Real Estate magazine is recognized by the National Association of REALTORS® as "the industry's leading independent real estate and relocation news and information source."

Since 1975 Pacific Union has been one of most successful real estate firms in the San Francisco Bay Area. Its guiding goal has been to be the Bay Area's best locally managed real estate company - the one that provides the best agents, best service, best local knowledge, and best buyer and seller experiences. It has offices throughout the Bay Area in these counties: Alameda, Contra Costa, Marin, Napa, San Francisco and Sonoma.

Kennedy, a licensed real estate broker, is affiliated with Pacific Union's Montclair office. In addition to the Realtor on the Rise honor, she is a certified EcoBroker, and has earned the At-Home-with-Diversity certification from the National Association of REALTORS®. She will be a featured speaker at this year's Institute for Luxury Home Marketing Leaders in Luxury conference in Miami. A longtime member of the Institute, she will lead a discussion of eco-friendly strategies for high-end REALTORS® and their clients.

Kennedy can be reached at www.MaureenKennedy.Net or at 510-290-8535.


What's All This about Smart Metering?

It boils down to the notion that you "can't manage what you can't see."

Someone had a story in the last couple of weeks about the town of Brighton in the UK. It's adopted smart meters which give real-time feedback on energy usage in the house. A nice console on the wall--Echelon in San Jose makes them and cities around the world are buying them in bulk. Kind of like the real-time mpg feedback our Priuses offer on the dash.

Didn't realize that the computers soak up so much energy? The meter will tell you. Maybe we can delay that load of wash until the evening? The meter might suggest it.

Then the Sunday Times ran a story in the business section. And coincidentally DC's utility started a demo last week.

PG&E started a different effort in Bakersfield a couple of years ago, and is scheduled to make its udpated exterior meters available here in Oakland beginning January '09. They'll gather better data, and you'll be able to track usage more effectively on the internet. See the PG&E brochure here.

But there's nothing like having a snazzy-looking meter reader in your kitchen to make you change behavior. When's that arriving in the eco-friendly Bay Area, you PG&E higher-up readers?

Piedmont Private Firefighters???

To the SF Chronicle Corrections Department:

Hi: I'm surprised that the blog area comments on this story didn't cover this issue, but I'll do it-- Please put a correction in Monday's paper concerning the lead sentence on your private fire staff story--

I'm not sure which of two problems John has: 1. He doesn't realize that Piedmont is a separate chartered city from Oakland, and has been for over 100 years, and thus has its own fire department (dating from back when Piedmont was a long way from any Oakland fire stations . . . .). Thus our town fire department is staffed by unionized public employees, just like the Forest Service, not a private service, or

2. He's confusing town with zip code. Piedmont and Oakland share three zips: 94610, 94611, and 94618. These zips include affluent Piedmont, but also most of the (geographically much larger) affluent areas of Oakland.

If the Chubb service, which, by the way, I've never heard of and have never received a solicitation on, is available in 94611, it can be accessed by nearly 600 owners of Oakland homes in that zip that have sold for more than $1 million. There are just about the same number of sold-for-over-$1 million homes in that zip in Piedmont.

If 910, 911, and 918 are all eligible for the program, only 718 Piedmont homes, based on sales prices from the MLS are eligible, but fully 1146 homes in Oakland are eligible.

Enough gratuitous bashing of Piedmont, thank you. Slam the privatization of public services all you want (in fact, as a Kennedy School grad and former Clinton appointee who faced Republican-led privatization efforts around my housing agency in the mid-90s, I can give you several great bullet points on this that weren't covered in the story); do it in a fair way; and attack Chubb for leaving out the 55 homeowners of over-$1 million homes in 94602--at least they should apply their rule fairly!!

Best, Maureen Kennedy 104 Pala Avenue Piedmont, CA 94611

Yes, I'm Like your Personal House and Home Editor----

Just after I read the NYT piece, the Chron had a nice story on home office redecoration. I'd argue it was actually home office layouts--much more in keeping with the tenor of the times! Here are the bullets, clearly from a rip-and-read service:

*Determine desk placement by asking "what do I want to be looking at while working?";
*Avoid glare on computer monitors--don't place them opposite windows;
*Give yourself at least 42 inches from the back of your chair to the wall behind you;
*Avoid lining up furniture along the wall; and
*Plan it all out on grid paper.

Frankly, I trust you to ignore that last bullet-------

Saving Water for the Garden

I remember years ago, when I was running Redefining Progress in the City, a rep from Tree People in LA came calling. Sounds very crunchy, I know, but he made a key point that I've remembered ever since: We in California get gobs of rain in one season and none the rest of the year. What if we could store that rain conveniently, and use it through the year for outdoor needs?

The New York Times has caught up with the issue. This last week it published a story covering this exact issue. The piece outlines how to go about collecting water efficently, and makes the point that while you won't save much money (water is still one of those resources that's almost "too cheap to meter"), you'll avoid using precious drinking water for irrigation, and you'll divert storm runoff from the sewage regional sewage treatment system (too much of our storm water still comingles with sewage!).

East Bay Market Update

Despite unsettling events in the housing and mortgage markets as recently as today, the East Bay appears to be doing better than much of the rest of the state and much of the country, according to data from a variety of sources.

Berkeley prices are about 5 percent below the $829,000 average in the 2Q06. In contrast, Oakland's average price declined by 20 percent between this just-closed quarter and the same period last year, according to data from the Multiple Listing Service.

At the same time, median prices across the state declined by 35 percent in May, 2008 compared to May, 2007 according to the California Association of Realtors. The organization reported that prices across the San Francisco Bay Area declined by 19.5% from 5/07 to 5/08.

The average home price was $525,100 in Oakland last quarter (87% of the original asking price for these homes) and $782,100 in Berkeley (2% over asking). The typical Oakland home sold in 44 days, a clear increase over the month or so a sale consumed at this time last year. By comparison, the CAR reports that across the state, average days on market was flat over the past year, at about 50 days.

The number of sales in Berkeley is a bit below the figure for 2Q07 (154 this quarter compared to 172 for the same period last year). Oakland and Piedmont sales are down much more significantly, though the average price per square foot in Piedmont has remained very steady this past year.

Interestingly, the condo market seems to be settling down. The statewide decline in condo prices slowed--between April and May of '08, prices declined by less than 2 percent, compared to declines of nearly 5 percent in the single family market. Likewise, overall condo prices were down by 20 percent in the year prior to May, '08, while they were down 35 percent in the single family market.

There are bright signs: the first-time homebuyer affordability index eased, meaning that as prices declined, more households had the income necessary to make a home purchase. And across the state, the number of sales has increased these last few months, suggesting that homes on the market that were in default or foreclosure several months ago have now gone into lenders' inventories. In turn, lenders are now very focused on selling these properties, getting them off lenders' books and occupied.

If this treatment only whets your appetite for data, email me and I'll forward you a recent California Association of Realtors economics and housing PP presentation.


The material below is so old school (!) just one year later. I've assembled all my renovation resources, green incentives, eco-tips and so on in a new Google Site, When I lauch this new blog tomorrow (8/28/09), I'll let you know about a couple of other sites I've developed for clients as well!

That handy list of green rebates for Alameda County residents from the 1Q08 newsletter can be found here, and my list of home improvement and maintenance vendors can be found now or later at The password is MaureenKennedy (case-sensitive).

And as always, I'd love to help you or your friends and colleagues with your real estate sales and purchases!

Piedmont Blog--Not Mine!

Maybe I just don't have kids in elementary school anymore, so I missed it, but I came across a Piedmont blog this week with a decided focus on the green agenda (and baseball, btw). Check it out at Piedmont.Wordpress.Com. Those guys should link back to my blog for detailed discussions of going green in the built environment!

40th Anniversary of the Fair Housing Act

Not something that most realtors would think to acknowledge in their e-newsletters, but we've just celebrated the 40th anniversary of the Fair Housing Act.

Imagine what the country looked and felt like, and what Piedmont looked and felt like, 40 or more years ago.

(Though I remember being intrigued that our home on Pala was built in 1907 by attorney Irving Magnes, whom I assume was Judah Magnes's younger brother?)

Interesting View on Renovations

Last Friday's Wall Street Journal included a piece covering an issue I mentioned back in April: Home renovation projects gone awry when the lender shuts down or scales back your home equity line. It also touches on a trend I haven't seen yet, but which makes sense. When times are tougher and values lower, scale back the quality of finishes a bit. Read it here.

Challenging your Tax Assessment

If you've had your home for any length of time, skip to the next blurb as Prop 13 effectively protects you and your tax bill, for better or worse. But my favorite title company, Fidelity National Title in Montclair (they are very intentional about their commitment to e-closings--saves trees and increases transparency) offers a useful primer on disputing your assessment.

Movies in the Park

Organize a picnic, bring the low folding-chair, spread the blanket. It's Movies in the Park time! And I'm again co-sponsoring the series. Remaining movies include:

Curious George--Friday, July 11th
Enchanted--Friday, September 12th

All movies start around dusk, in Piedmont Park at the curve on Highland Avenue. Invite friends from out of town, and let them get a sense of the Piedmont lifestyle. I'm happy to provide a no-obligation tour anytime!

Piedmont's 2nd Quarter in Real Estate

The quarter wrapped up with just 21 closed sales (compared to 46 in '07 and 33 in '06), averaging $605/sf, closing in a typical 30 days, at just a tad below the original asking price, on average. The average sales price this quarter was $1.894 million, though homes in this group tended to be quite a bit larger than usual for our market--over 3,000 sf. Prices ranged between $855,000 and $7.8 million, according to the Multiple Listing Service from which these data are drawn, and sold for between 80% of asking price and a remarkable 25% over the asking price.

While only one home sold over $2 million in the first quarter of the year, six sold over that price point this quarter (which in turn accounts for the larger-than-usual size). And note that the average price per square foot, $605 this quarter, is essentially identical to the $606/sf last quarter, and $604/sf for the same period of last year.

If we look at the 10 homes in contract but not yet pending, and the 19 that are on the market right now, it looks like there are good values to be had. Active listings have been on the market for an average 30 days thusfar, at $585/sf. Eight are priced over $2 million, and about half of the total have been on the market for more than 30 days, suggesting that a price cut is in order. Those currently pending were on the market longer, generally, and for a slightly lower asking price per square foot. (Let me know if you'd like a copy of a two-page memo I recently prepared on the over-$2 million market in the East Bay--I've been using it as a negotiating tool when representing buyers in that market.)

[Note that two of the 21 homes sold with confidentiality agreements this quarter, meaning that no sales price information is available on them. See the chart at the bottom of the page for detailed info on this month's sales (and let me know if you prefer getting this material in the e-newsletter rather than the quarter-by-quarter trend data I usually offer). No street numbers included--because we need a little more privacy in this town! Call me to discuss if you'd like more detailed information on sales or the value of your home.]

Flat or declining prices here and elsewhere and tougher lending standards everywhere are making it more difficult for outsiders to move into town, and for those in town to ''move up.'' In fact, I think we're likely to start seeing home sales contingent on the sale of the buyer's current home more frequently, as lenders are less comfortable enabling buyers to buy their new home and only then put their old home on the market. How long can most of us comfortably sustain two mortgage payments? But in the main, serious sellers who price their homes well are still able to come to terms within a couple weeks, and have their proceeds in hand within another 30 days.

$5 Million in 10 Days--

I've sold $5 million in real estate in the last ten days! Interestingly, all three homes were mid-century classics, two in Piedmont and one just over the line off LaSalle Avenue. I'll look forward to introducing you to these new homeowners!

3838 Greenwood Avenue off Park Boulevard

This is a special home for the right circumstances!

You may remember that in 2006 I sold a well-maintained 1-bedroom, 1-bath vintage (read ''untouched since the '40s'') unit in this recently condominiumized four-plex set within a classic Berkeley-style garden on a residential street. It was a huge hit, and rightly so.

Well, I helped sell three other units in the building to ''friends and family'' of the then-owners, and one of these is coming to the market, after a wonderful renovation. It's a great worry-free opportunity--made for quiet, relaxed enjoyment, and tucked between Crocker Highlands and Glenview.

The recently painted 1-bedroom, 1-bath unit boasts refinished hardwood floors, new built-ins, recently updated kitchen with stainless appliances and granite countertops, gas range, in-unit laundry (yeah!), and a gorgeous marble bath. Down below is a flexible studio space with separate entrance and its own kitchen and bath--private home office? College student's enclave? Music studio? Exercise room? In-law or caregiver's living area?

The artfully arranged building maximizes privacy among the units, and offers several exterior patios, gardens, gorgeous bougainvillea and wisteria along the building's garages, and an expansive deck above them.

Co-owned for years by a Berkeley contractor with taste, many building systems have been upgraded or replaced in recent years, including a newer roof, bolted foundation (the HOA takes out earthquake insurance--practically unheard of for a condo around the Lake!), shear wall in lower areas, structural underpinning in the garage, and noise-reducing insulation on the small portion of the unit that shares a wall with a neighboring unit.

And, the building is close to SF express buses, casual carpool, and 580, to say nothing of weekend mornings at Arizmendi and the farmer's market, lunch at the Blackberry Cafe, a quick pick-me-up at Peets, a fast walk around Lake Merritt, a reserved book delivered and waiting for you at the Lakeside public library, capped by a movie at the Grand Lake Theater.

So do you know someone for whom this makes perfect sense?

Priced at $475,000, and open Sunday, 6/15 and 6/22 from 2-4:30 pm (along with broker's open next Monday from 10-1).

See GreenwoodCondo.Net for full photos and information.

Soon, Take a Stroll through the Oakland Rose Garden!

On Jean Street, right behind Ace Garden on Grand Avenue, is a hidden gem. And the roses are still blooming, though take this opportunity to note ''see Rose Garden'' next year the week after Mother's Day, when it's at its prime.

I enjoyed the garden by myself last Sunday, morning cup of tea in hand, though it's a great place to get work done while younger kids romp around or look for tadpoles in the shallow lilypad pond. Very stroller-friendly. I even caught up with a family friend there one evening years ago, with gin and tonics at hand in a Thermos!

Renovation--How Much??

The New York Times had a nice piece in the business section on Sunday regarding how to renovate, without putting too much of your own stamp on the house. ''Yes, it's your home. However, you do have to keep resale in mind because situations change, and you never know when you're going to have to sell,'' said an EVP at a NYC brokerage. See the full article here.

Cell Phone Law Implementation Coming Up!!

First the bad news. Click here for the CHP description of the new law, and what happens starting 7/1/08 if you are stopped driving and talking on a hand-held cellphone at the same time. Note to parents of under-18 drivers: They can't drive and talk under any circumstances--I had no idea!

Then the solutions. Here's a nice piece from the Mercury News on approaches to meet the law's requirements, depending on your uses and needs.

Kennedy Is Front-Page News in The Onion

If your household is a fan of The Onion as ours is, you'll be impressed--I was shocked when Gray Cathrall (editor of the Piedmont Post) called to tell me about this. You need to understand that in my housing policy consulting days, I "wrote the book" on gentrification for the Brookings Institution during the late 1990s/early 2000s wave.

Check out this link--

I'm Never Too Busy for your Referrals!

What I Did this Quarter

You may think I sell houses, but I really help people make great real estate decisions. This quarter I: wrote this e-newsletter filled with useful stuff; met with two different clients to give feedback and advice on their planned renovations; passed on information about green building, insurance, and wills; helped the newly appointed head of a major statewide institution find rental housing; met with a client to discuss the plusses and minusses of selling off a vacant lot; recommended an architect, and a contractor; tracked down low-e film applicators for windows; referred a client to an agent in Contra Costa County (she then bought a home); and another client to an agent in West Marin.

I get paid when you buy or sell a home, when your friends and colleagues buy or sell a home through me, and when I refer you or a friend to a great realtor elsewhere in the region or country. I've carefully developed a network of trusted colleagues in classic second home communities, as well as around the country through my association with the Institute for Luxury Home Marketing.

So don't forget to mention me, pass names along to me, or ask for a referral to another agent! I'm never too busy for your referrals!

1Q08 Piedmont Market Update

So What's Going on in this Market??

Only 11 homes sold in Piedmont this past quarter, compared to 18 homes during the first quarter of 2007 (and 21 during 1Q06). The average price per square foot settled in at $606/sf, lower than last quarter's $631/sf, but consistent with the pattern of the last several quarters. The typical home sold in 28 days for $1.609 million. Prices ranged from $815, 000 to $2.85 million, with only one home selling for more than $2 million.

Perhaps more interesting than what has sold is what has not sold. On the market are six homes in the over $2 million price range. Three of these have seen price reductions of between $400-500,000 in the past several months. And only three have sold in that price range in the past five months.

Two active listings are of particular interest, because they illustrate a bit of the story behind the Case-Schiller Index. As do we, economists for years relied on median or average prices to track market movements. Case and Shiller instead rely on same-home sales over time for ''apples to apples'' comparisons. See to play with the data for the San Francisco metro area. Two homes, one originally sold in 2002 and one in 2005, are now on the market for prices lower than those for which they were bought.

A recent Chronicle story sure woke us up: ''Home values are eroding at an accelerating rate in the Bay Area as the credit crunch and a game of chicken between buyers and sellers pushed last month's prices down nearly 15 percent and held the number of homes sold near a historic low.''

What's happening?

As I've mentioned in past updates, average and median prices in northern California were still going up because sales activity in the below $500,000 market had stalled. Many of those buyers faced tougher downpayment and credit score requirements than last summer, and a number of the sellers were ''underwater''--that is, they owed more on the property than it was worth, and they would have to take money from savings to pay off their mortgage at sale, or get the lender to agree to a ''short sale'' and eat the difference. Lenders were taking a month or two to sign off on short sales--or not. With sellers feeling unable to reduce prices to market levels, and buyers unable to offer the same higher prices they could six months ago, the market was paralyzed. What IS a market price in this environment?

Now, many of these short-sale properties have moved through the foreclosure process and are REO or real estate owned [by the bank]. The REO managers have taken over from the loan servicers and are selling at fire sale prices left and right. For instance, of the 10 sales below $500,000 in zip code 94605 in the last month, seven were REO, probate or short sales, selling at as little as 75 percent or even 65 percent of formerly reasonable asking prices. Seventy-four percent of currently pending sales under $500,000 in Berkeley and Oakland are short sales or REO. What is a market price in THIS environment? It's not what a home sold for even last week; it's what the REO guys are willing to take for the other homes on the market.

(Think about that for a minute. Three-quarters of households selling lower-cost homes in our area are facing great financial pain, whether they invited it or not. And think about their neighbors, whether long-time homeowners with plenty of equity, or recent purchasers who are making mortgage payments on homes that aren't worth what they currently owe. These neighborhood-wide effects and disinvestment are what city leaders are particularly worried about.

Contact me if you want to explore investment property--we're now seeing prices so low that rentals are again ''cash-flowing''--that is, the rent and tax benefits cover expected costs. A thoughtful market watcher outside the biz said to me last week, ''those guys [investors] are the heroes in this market.'')

In contrast, the upper-end market is relatively stable. If we look at single family homes of at least three bedrooms and two baths selling in 94610, 94611, and 94618 (Piedmont and Oakland), there have been 67 sales since 1/1, an average of 47 days on the market, and an average sales price of $1.044 milion ($437/sf). Same time last year, we saw 65 sales, in an average of 28 days on market, at an average $1.1 million ($449/sf). A modest number of these are short sales or REO--don't think our market isn't immune. About seven percent of currently pending Oakland and Berkeley homes above $500,000 are ''distressed,'' according to the listing agent, who is required by MLS rules to note if the home is a short sale or in foreclosure.

And the mortgage market chaos is being felt here. I've heard of buyers planning to write a hefty home equity line check for a downpayment on a new home before selling the old. And a day before closing, the bank says, ''that was last week. We've just reduced your line of credit by 50% this week.'' Or 80/10/10 loans locked in a month ago, but the second mortgage documents just never show up at closing, leaving the buyer to come up with $50,000 (in one case) in two days. Or lenders asking for a second appraisal a couple days before closing--or docking the existing appraisal by x%, because the broad East Bay market is considered a ''declining market'' by the GSEs.

In either case, the buyers need to find the cash to cover any shortfall, or face losing the house AND their 3% initial deposit. During last August's initial flush of chaos, I thought one of my sellers might have to step in with seller financing to cover a gap like this, but the situation resolved itself. I think we're likely to see more of these creative solutions in the coming months in our market--once lenders get stabilized enough to be clear about their constraints up front, which is not necessarily in their capacity right now.

Tough times for the buyer and the seller. Definitely a time to put your business in the hands of a thoughtful, smart agent thinking about all the angles and potential pitfalls, and communicating them clearly and with compassion.