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2015 Real Estate Market Forecast

Welcome back, everyone. Today we are going to give you our 2015 market forecast. This information will be very useful to you as the year goes on, especially if you're thinking about buying or selling. In order to know about where we are going, it's important to know where we have been. Here are some of the numbers from 2014, split into 5 important categories:

Sales in Silicon Valley peaked back in 2012, when we sold over 18,000 homes. In 2014, we sold a little over 16,500 homes. While the number is going down, it's still a healthy figure, based on our inventory.

Back in 2010, we had 5 months of inventory, and that was the closest we've been to a balanced market. Since then, we have been on a decline, and we now only have about 1.5 months of inventory available, putting us in a hot seller's market. 

Median Price
The median home price has skyrocketed in the last few years. In 2010, the average home cost around $450,000, but with steady appreciation, including an increase of 19% between 2012 and 2013, the average price is now near $725,000. This appreciation can't be sustained for much longer, however.

Interest Rates
Mortgage interest rates are around 4% right now, but are projected to be near 5% by the end of 2015.


Affordability has decreased substantially over the last few years. In 2013, 50% of people could afford homes. That figure has dropped to 20% so far in 2015. 

So what do these numbers mean for 2015? Here are our predictions for what will happen this year:

  • We expect sales to increase, by about 2%.
  • Home prices are going to appreciate, but by just about 6%.
  • Interest rates will rise to near 5% .
  • Affordability is going to continue to decrease.

If you have been considering making a move, 2015 is the year to do it. With such low inventory, you'll be able to sell your home quickly and for top dollar. If you are buying, home prices and interest rates are going to rise, so the home you may qualify for now could be a whole lot nicer than the one you would qualify for in a few months

If you have any questions for us, be sure to give us a call or send us an email. We look forward to hearing from you!

One Real Estate Mistake That Can Cost You a Fortune

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In the real estate world, those with the most knowledge are usually the most successful. Today we are delighted to be joined by Rich Dayton, a certified specialist in real estate trust planning and probate law, to talk about a simple mistake that homeowners make without realizing it, a mistake that could end up costing you tens of thousands of dollars. 

So, what is this mistake? Well, according to Rich, 90% of people in our country do not have any form of estate plan in place and that can be a very serious problem for them. If you don't have something like a living trust, power of attorney, or health care directive setup, you can be subject to probate. Probate is based on the gross value of a property. With the average price of a property in Silicon Valley at about $1 million, your probate could run up to $50,000.

If you have a plan in place with the help of a professional like Rich, it's a fraction of the cost of the risk you are exposing yourself to without one. It also helps your family in case of untimely death, and takes any extra worrying out for them.

One other problem that many people have has to do with a revocable living trust. Many times, people fail to fund the real estate, with the title of the property in the name of the trustees rather than in their individual names. 

Another thing to watch out for is exposing your property through refinancing. Most mortgage companies require you to take the property out of your trust, put it in your name, and if you don't take the action to affirmatively put it back in, you've exposed that property to probate again. 

If you want to avoid these problems, give Rich a call. He can also offer you a complimentary consultation, click the link in the video to sign up!

3 Reasons To Go Solar & 1 BIG Reason NOT To

Los Gatos Real Estate Agent
A question we have been getting a lot lately is "Should I invest in solar energy?" and if the answer is yes, "Should I buy a system, or lease it?".

There are a few things you need to consider before deciding to invest in solar energy. The first thing is how much energy will you save? According to experts, about 50-90% of the energy you use in your home can be offset by a solar system and is usually an economic advantage of $100-300 a month.

The next question is this: Should you lease a solar system, or buy it? Currently, 90% of people lease their system. However, the break-even point for solar energy is around 5-8 years, so if you know you are going to be in your home for a long period of time, purchasing the system may be a little cheaper for you.

Another question people ask is, "Does solar energy increase the value of my home?" Although it is a great feature to have on a home, we have found that at the current time, buyers are not paying a premium for a home with solar energy. It's a nice bonus, but not something that will necessarily increase the value of your home.

One thing to watch out for is leasing on your solar system. When you sell the home, the buyer will assume the lease, but you may have to incentivize the lease or buy out the system to make the sale.

Finally, you need to check to see if your home is a good candidate for solar energy. Not every home is, especially if you have bad exposure and lots of trees around your home.

If you are thinking of moving in the next few years, don't pull the trigger on solar energy just yet if you are looking for a return. However, if you are in a home you plan to be in over the next 10 years and beyond, this is a great investment opportunity for you and you can save a lot of money down the road.

If you have any questions for us at all, please feel free to send us a quick email or give us a phone call. We would be glad to help out.

What's Critical About the Next 90 Days in Real Estate? [VIDEO]

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As we enter the fall and winter months, the next 90 days are crucial if you are looking to buy or sell real estate in Silicon Valley. Here's why:


  • Inventory has remained steady, which is unusual for this time of year. Sellers have been motivated by a recent run-up in prices, so we have higher than normal inventory heading into the fall and winter months.
  • Price appreciation is slowing down. It's still high and continues to rise, but the market as a whole is slowing down a bit.
  • Seasonal buyers are pulling out of the market. This means there is significantly less competition vying for great homes.

  • Prices are at all-time highs. We just recently surpassed the all-time highs for Silicon Valley we saw in 2005.
  • It's still a seller's market. Even though many buyers have pulled out of the market, inventory is still between one and two months. A seller's market is anything under 6 months, so sellers clearly have an advantage right now.
  • Interest rates are still low. It's looking like rates will rise sometime in 2015. There's a great opportunity right now to sell your home at top market value and lock in a low interest rate on a new home.
There's no telling what will happen when rates rise next year. That's why the next 90 days are crucial for Silicon Valley real estate. If you are interested in taking advantage of our current conditions or have any questions about the market, don't hesitate to reach out to us. We'll be right here, ready to help you create a better life through real estate!

Has the Real Estate Market Peaked?

 Considering Selling?
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Market Update for Los Gatos, Willow Glen and Saratoga Areas

Many people here in Silicon Valley are asking if the real estate market has peaked. If you know anyone who has sold their home recently, they are probably thrilled with their sale price; on the other hand, people who recently bought a home probably feel relieved just to get their foot in the door. But to truly understand if the market has hit a peak, we need to understand what pre-peak conditions are like, so we can determine where prices are heading going forward. 

Typically, two things happen when any asset reaches its peak: a significant run-up in price and a simultaneous decrease in the volume of units sold. For example, if Apple's stock price rises at a steady pace over a long period of time, buyers will begin to lose interest in the stock. When the price continues to rise but the number of shares start falling, the stock price will peak.

So, what are we seeing in real estate? A few things:
  • Significant increase in price. Year-over-year, prices have jumped 13% to 17%, depending on the neighborhood.
  • Decrease in the number of sales. Home sales have fallen 24% compared to this time last year. 
  • Increase in price reductions. This year there has been a 90% increase in the number of homes that come on the market and later reduce the price to effect a sale. 

Have prices peaked? The data seems to support that conclusion. We're still seeing multiple offers for homes that are priced well in some of the best neighborhoods, but not as many as we've seen in the recent past. Again, we are also seeing  more cases of homes coming on the market, receiving no offers, and having to reduce the price - which indicates prices are trending downward. 

What does all of this mean for you? If you are a seller, now is probably the best time to shoot for a high market price, as we may see prices drop significantly in the future. If you are a buyer, you may be able to get a great price on a home because many sellers are pricing their property more competitively.

If you have any questions about conditions in your neighborhood, or are interested in real estate in Silicon Valley areas such as Los Gatos, Willow Glen or Saratoga, reach out to us. We're ready to help you create a better life through real estate.

What Zillow Isn't Telling You Could Cost You

As one of the top real estate websites in the country, Zillow plays an important role in our industry. On the one hand, it's a good source for Los Gatos real estate trends. On the other hand, it isn't so good at providing accurate value estimates or up-to-date information on homes for sale. 

Why is Zillow not as accurate as people expect?

For starters, Zillow gathers some data from tax records and some data from the Multiple Listing Service (MLS). While the MLS is the true, accurate market for real estate data, tax records are not a reliable source for home evaluations. For instance, sales that occur off market, such as inter-family transfers, cause property to sell for less than full market value.This skews the data enough to make the Zestimate nothing more than a broad estimate. 

If you're trying to sell your home in Los Gatos, Willow Glen or Saratoga, Zillow isn't going to be much help getting an accurate value estimate. Zillow's algorithm only accounts for things like bedroom and bathroom count and the square footage of the property in relation to the particular neighborhood's market values. If you've made gorgeous improvements to your home - marble counter tops, new cabinets, etc. - they won't be factored into the Zestimate. This could cause your home to be undervalued by as much as 10-15%. 

If you are looking to buy a home, you need to know that Zillow's data is typically delayed anywhere from 24-72 hours. At best, Zillow is a convenient starting point. Once you have your feet on the street shopping for a home, it's time to hire a local expert. We're here to help with real-time market information and listings.

As always, give us a call if you are looking to buy or sell a home in Los Gatos, Willow Glen or Saratoga, or anywhere in the Silicon Valley area. We would be happy to provide you with the most updated and accurate information.

San Jose Mercury News Interviews Brett Jennings on Bay Area Housing Market

Brett Jennings Interviewed by San Jose Mercury News

Pete Carey recently interviewed me regarding the affordability of homes in the Bay Area and Silicon Valley. 

Here's the quote featured in the article:

"I believe we are probably hitting affordability limits," said Brett Jennings of Keller Williams in Los Gatos. He said his typical buyers are a husband and wife in tech, making a combined $240,000 a year, who still can't afford a basic home in some parts of the valley.

"When the median home price is no longer supported by the median income, we're near top," he said.

If you're looking to buy a home in Los Gatos, Willow Glen, Saratoga or anywhere in Silicon Valley, it's important to work with an agent that knows how to locate off-market properties and negotiate the best possible price on your new home.

Click here to access off-market properties for sale. Currently features over 100 properties not available on the MLS, including builders, developers, investors and private parties who are open to offers. 

Contact us today to start your home search, we'd love to help.