The life span of a typical short sale listing in Los Altos/Los Altos Hills goes as follows:

• The property is originally listed at a price very close to the debt on the property plus the transaction costs and maybe a little profit
• The property sits on the market for quite a looong time with no activity
• The Seller realizes that they are financially bleeding from every Orifice
• The property is re-listed at a below market value in an effort to induce offers
• The Seller receives multiple offers which are reviewed and submitted to the bank/investor(s)
• Everyone waits to see if a deal can be worked out.  Some are, but many aren’t

Below is a graph of short sale properties that are currently or have recently been on the market in Los Altos/Los Altos Hills.  I have included the original list price, current approximate debt and list price when the property ratified a purchase offer with the seller.

The actual numbers are below.

Sellers, a home’s value is not based on its loan balance.  Price it to the market and try to move on.

If you are thinking of buying a short sale property, check out the amount of debt on it and the number of lenders involved.  It may make sense to pass on it if there is too much debt or more than two lenders.

Yesterday I went down to 190 N. Market Street in San Jose to check on a property that was scheduled to be sold at a trustee’s sale. I came home with this video that shows how the process works.  The video is longer than I hoped for and won’t challenge Avatar for best picture, but I think it accurately details the trustee sale process.

Note: the house that I was checking out was postponed to another day. It was one of many properties where the trustee sale was either cancelled or postponed until another date.

It appears that the listing inventory of lake front properties is near/at an all time high.  Buyers of these high end homes are waiting for just the right property.  Can you say “a steal?”

A recent case in point was a lake front property that had been on the market for quite some time without selling.  The owner eventually lost it to the bank who put it back on the market at a significantly lower list price.

Buyers came out in droves and after double digit offers (slightly over 20 offers), the home sold slightly above 3 million.  The sales price was approximately 53% of it’s prior list price and approximately 60% of it’s original purchase price (I believe it was purchased in 2005, but not quite sure).  Can you say “a steal?”

This happened in Lake Tahoe, but it could easily have happened in Los Altos, Los Altos Hills, Palo Alto, Saratoga or Los Gatos.  The high end in any of our local real estate markets is still quite difficult for sellers and should continue to be that way at least through 2010. 

Food for thought:  If you are thinking of selling your high end property in our local market, there are plenty of qualified buyers.  However, they want a “steal” and are prepared to wait until they perceive they have found one.   Prepare yourself for this reality and you’ll have a better experience.

A client of mine sent me the link to this video created by Kris Berg of San Diego Castles.  It is a hilarious look at the realty of most REO home purchases.   FYI, if you need a savvy agent in the San Diego area who also happens to have a fabulous sense of humor, call on Kris Berg.

Habitat for Humanity’s Neighborhood Revitalization Program is a partnership with the city of Menlo Park where bank-owned homes are acquired, rehabilitated and sold to Habitat’s partner families.  Click here for an overview of the program (PDF).  It appears to be a great program that addresses a multiple of issues; creating affordable housing, reducing the glut of foreclosure properties in East Menlo Park, and revitalizing blighted neighborhoods destabilized by the foreclosure crisis.

Our Menlo Park Build

There were 11 of us from the Coldwell Banker – Los Altos office that participated in working at three different home sites.  At one house, 4 of us disposed of the remnants of two structures and put the debris in a 40 foot dumpster.  The last 2 hours, we built a fence.  At the other two homes, installation of interior sheet rock (tape and texture) was done as well as one home’s exterior was painted.  As an office we put in about 40 man hours and had a blast doing it.

At break it was nice to talk with the “regulars” (retired folks who volunteer for a living).  I also had a good conversation with a fellow agent who had not volunteered before.  She really had a good time and assures me that she’ll do another. 

If you haven’t done a Habitat build, I highly recommend it.  It’s actually fun, you meet great people and you learn a little about construction as well.  Also, if you want to get more information, Habitat Silicon Valley is celebrating it’s 50th home built with a dedication on October 3rd.  Click here for details.

I’ve posted a couple photos form the day below.  Enjoy!

Our Habitat for Humanity build site.

Even I can build a fence.

Our office (well, most of them) volunteers.

First off, in 2008 there was only one short sale single family home listed for sale in the MLS.  January through August of 2009, there have been five single family homes listed as short sale listings.  That is a 500% gain, but it’s only 5 homes.  That’s less than 1.5 percent of the yearly average of homes that are sold in Los Altos.

One may ask why I’m writing about this?  Good Question.  I think consumers understand this, but it’s a point worth repeating, headlines are designed to get people to read articles and/or buy more newspapers. 

Secondly, it’s important to remember that national and even regional newspapers (or news sources) don’t necessarily report “the numbers” that are pertenant to our local market.  

In short, get facts from a reliable source that uses reliable local data.

For those of you who may want some local data.  Below are details on the five Los Altos short sales.  The information was taken from our local MLS and is deemed accurate but not guaranteed.

Los Altos Short Sale activity since January 2009:

720 Greenview Place: Sold.  On the market for 62 days.  Highest list price – $1,695,000.  Sales price – $1,549,000  Length of escrow was 44 days.

1831 Fallen Leaf Lane:  Listed at $1,325,000.  Bank took it back in foreclosure at $1,566,757.  Short sale was not successful.  House may come back on the market as an REO (bank owned property).

580 Camellia Way:  Sale Pending.  On market for 35 days.  Highest list price – $1,888,000.  Current list price – $1,700,000.   9 days into a 4 month escrow.

1725 Miller Avenue:  Sale Pending.  On market for 12 days at its current list price of $1,500,000.  Home sold in 2004 for $1,925,000.   3 months into a 4 month escrow.

860 S El Monte Avenue:  Available.  On market for 30 days at original list price of $1,500,000.

688 Lincoln Avenue:  Sale Pending.  On market for 3 days at original list price of $799,000.  Sold in 2004 for $850,000.

It will be interesting to see if any of these short sale properties that are under contract will actually close escrow.  Stay tuned!

These homes are:

18840 Newsom Avenue, Cupertino

18900 Newsom Avenue, Cupertino

10210 Johnson Avenue, Cupertino

10187 Byrne Avenue, Cupertino

These homes are:

13119 Estralita Place, Los Altos Hills

15411 Vista Serena, Los Altos Hills