New San Jose-based real estate startup - Places.me

Places.me is a new Silicon Valley real estate site with a very slick user-interface. Their goal is to make it easier (and less expensive) to buy and sell homes.

The company founder, Manly Danh, was born and raised in San Jose. Both of his parents immigrated from Vietnam with $10 in their pockets, but eventually fulfilled the American dream with a home on 7th and Santa Clara. Founding Places.me wasn't something that Manly just wanted to do, it is something that he knew he was supposed to do.

The site has one of the coolest homepages I have seen and I love how San Jose locations are prominently displayed as a full-screen video (Santana Row, San Pedro Square, and Downtown high-rises are all in there). While I am not in the market for a new home, I have to admit that I spent the last hour searching for San Jose dream homes.

If you buy a home through the site, you will get 1% of the purchase price back. If selling a home, you pay a 3% commission instead of the standard 6%. In Silicon Valley, this translates to savings in the tens of thousands of dollars range--definitely something to think about.

Below is their inaugural blog post. Check out the site for yourself over here.


Hi there, neighbor!

So, about us — we’re a real estate startup based in San Jose creating an easier and faster way to connect home buyers and sellers. With over 90% of people using the internet as part of their research to buy or sell a home, we’ve built Places to bring buyers and sellers together in a platform that takes the hassle out of traditional real estate.

If you’ve ever bought or sold a home out in the wild, you’ve probably managed your transaction through an agent. And with the average sale to closing time starting at 4 weeks, the process can be pretty tedious and lengthy. The experience can make you feel like a number — it has for folks on our team who’ve been in the same boat. That’s not a great feeling when you’re talking about a transaction in the hundreds of thousands of dollars.

A new take on real estate

We’re trying a different angle. We want you to love the homebuying experience, start to finish. So we’ve built a data-driven platform that makes it easy to thoroughly and quickly research homes, get to know neighborhoods, and make offers quickly — without a traditional realtor. With new listings being added every day, and an average closing time of 10 days, you’ll be able to get a move on easily without all the usual rigamarole of traditional real estate. And we’re here for you every step of the way, so you can feel connected and in control throughout the whole transaction. Plus, buyers even get 1% back on their purchase price at closing, while sellers can save 50% on commissions — not too shabby, eh?

Let’s stay in touch

We’re just getting started, and we’ll be using this blog to keep you posted on what we’re up to. Stay tuned for the latest improvements to our marketplace, featured homes, stories from our local community, and more. And we want your feedback and ideas — so please, don’t be shy. Click those comment and share buttons, and let’s keep the conversation going!

Visit us at www.places.me

Saturday Stats: San Jose Metro is the Most Expensive in the US

For single-family homes, San Jose is the most expensive metro in the nation. The media selling price for a single-family home has increased by 8.9% this year to a mind-numbing $980,000.

San Francisco was second on the list with a median sale price of $841,600, which is up 9% over last year. Keep in mind these are metro areas, not just the city itself. Oakland and Fremont are bringing down the median for San Francisco, just as Palo Alto and Mountain View and increasing the median for San Jose.

Source: SocketSite

Rent Controls in San Jose

I usually try to avoid doing very controversial or polarizing posts, but in this case I can't resist. A couple weeks ago there was an article posting in the Silicon Valley Business Journal about rent controls. San Jose District 3 (Downtown San Jose) Councilman Raul Peralez is proposing to strengthen rent controls in San Jose, specifically by cutting maximum rent increases to 4% and extending rent control to all buildings constructed before 1995 (right now only buildings built before 1979 are rent controlled and the maximum increase is 8% a year). It sounds good on paper, right?

As an econ major, I can't stress how terrible this idea is. Rent controls do not make escalating rent problems better, they make them worse. Sometimes far worse.

Long story short, rent control is a manipulation of the market where demand exceeds supply (see image below). This isn't a guess or assumption, it's a science. With rent controls, there will be fewer rental options available and a greater amount of demand for those remaining units. The stronger the controls, the greater this effect. If you have ever wondered why 50-100 people are all applying for one rent-controlled apartment in SF, this is it.

You may think that if you are already in an apartment, that this will not effect you in a negative way. That couldn't be further from the truth. The stronger the gap between the market and the current rental price, the more likely your landlord will be doing everything possible to get you out of the building. Likely this will include include minimizing maintenance, refusing to do any improvements, trying to convert multi-family rentals to condos, and a variety of other items that I won't even go into. As soon as your are out of the apartment, you will be hit with far higher rents for lower quality units that more people are competing to get (again, SF). Many people will resort to "black market" apartments or tenement housing. Some will become homeless.

The damage does not end there. Rent controls will reduce the market value of all apartments affected. That means lower property taxes for the City of San Jose, and less revenue for services--including the already strapped SJPD and SJFD departments. Landlords will have less incentive to maintain their properties (in fact the opposite when trying to kick people out), leading to substandard housing and blight in both urban and suburban areas.

Thankfully, it seems like Mayor Sam Liccardo does not share the same sentiment on rent control as Raul Peralez. It's a very difficult topic to stand up to, because most voters will not understand economics and the topic of rent control is completely counter-intuitive. Sorry for the soapbox moment, but I really believe this will cause substantial damage to the rental market as can be seen in every single city around the world with strict rent controls (especially SF and New York).

Source: SVBJ

Saturday Stats: Rents Are Still Sky-High in San Jose

While there was some talk last year about rents starting to stabilize, the numbers in Zillow's latest studies show otherwise. In fact, there was a painful 13.4% increase in rents year-over-year from January 2014 to January 2015. Here are some other tidbits regarding the San Jose rental market:

• In San Jose, the median rent is $3,179 and rent is expected to increase 11.79 percent annually. 
• San Jose renters pay 39.4 percent of their income on rent each month, assuming the median San Jose income. 
• San Jose permitted just 294 new units for every 1,000 new residents from 2012 to 2013, according to Zillow.
• The Breakeven Horizon shows renters should consider buying in San Jose if they plan to live there for 2.7 or more years. 

For more info, head over to the Zillow article entitled: The Rent is Still Too Damn High -- And Getting Higher

Donner Lofts Affordable Housing Community Breaks Ground

MidPen Housing recently broke ground on a 102-unit housing complex at 156 E. St. John Street. The six-story project is on the former site of the Donner-Houghton estate, which was the home of a Donner Party survivor. Unfortunately, the home was destroyed in a 2007 fire.

The apartment complex includes 2,500 SQFT of retail on the ground floor as well as a community gathering space, computer lab, and exercise facilities. In order to lease an apartment, you cannot earn more than $37,700 as the units are designed for low-income workers and formerly homeless people in the Downtown area. The total cost of the project will be $30.8 million and it is expected to be completed by Summer 2016.

Source: SVBJ

More Apartments Planned for SoFA!

SoFA is on fire lately when it comes to new projects. Just as construction for The Pierce is getting into full swing, Core Development Co. is proposing a 105-unit apartment project on 598 S. First Street right across the street. This is an important corner at the intersection of South First and Reed Streets and is currently being occupied by an Enterprise Rent-a-Car (will be relocated).

The building will be either five or six stories--five based on the source link and six based on the rendering--and include 2,170 SQFT of retail on the ground floor. The site of the project is only 2/3 of an acre, making the project quite dense for a building this size. This will be a very nice expansion of the SoFA district, which is quickly becoming the next big hotspot Downtown after San Pedro Square.

Source: SVBJ

Citation Homes Bought Toys R Us Site For Mixed-use Project

Santa Clara-based Citation Homes recently purchased a parcel at 751 S. Winchester Boulevard in San Jose. The only thing on the lot today is a Toys R Us, which will eventually be razed to make way for a mixed-use project that is still in the early planning stages. There aren't many details, but one of the things we know for sure is that the new project will contain both retail and housing.

However, don't expect shovels in the ground anytime soon. Toys R Us has a lease that runs at least until early 2016 and could likely be extended even further. For more info, hit the source link below.

Source: SVBJ

Construction Starting on LINQ at Berryessa

The first market-rate apartments near the Berryessa BART station are about to break ground! Called LINQ at Berryessa, the project will have 230-units and is sitting on land that used to be zoned as industrial. Two affordable projects have already been built in the area and another 140-unit market-rate project is going to be built a kitty corner from LINQ.

In addition to being a short walk away from BART, LINQ will also have 12,000 SQFT of retail space which will likely be used for restaurants. For more info, hit the source link below.

Source: SVBJ

Saturday Stats: San Jose is the Most Expensive Metro in the US

You would think that New York or San Francisco would be the most expensive metros in the US, but we win the prize (if this is a prize at all). US home prices have grown an average of 4.4% year over year, but in San Jose they have increased a whopping 11.3% from the first to second quarter alone. The current median sale price stands at $899,500 for a single-family home in our metro.

San Francisco came in as the 2nd most expensive metro, followed by Anaheim/Santana Ana, Honolulu, and San Diego.

Source: SocketSite

Saturday Stats: San Jose is the Most Expensive Metro

In the first quarter of 2014, median single-family home sales hit $808,000 in the San Jose metro. This is enough to rank it as the most expensive metro in the US by the National Association of Realtors.

The San Francisco metro (which also includes Oakland) ranked as the second most expensive metro with a median home price of $679,800. To put these medium home sale prices in context, the median for the 170 largest metros combined was only $191,600.

Source: SocketSite

Orchard Park Coming to North San Jose

The New Home Co. is building a 239 home community in North San Jose called Orchard Park. The development will consist of a variety of townhomes, flats, and courts (homes surrounding courtyards) ranging from 1,600 to 2,150 SQFT. You can pretty much forget any new single family homes going up anywhere North of Downtown, all of the new housing is going to be much higher density from now on.

Orchard Park is a master planned community that will feature both a new 1-acre park and a 2-acre river path which will be an extension of the San Jose Coyote Creek Trail. There will also be a community center with a bocce ball court, community room, and dining areas. The project will be close to the new Berryessa BART Station and just two miles away from SJC.

They should have a sales office with model homes near the intersection of Old Oakland Road and East Brokaw Road up soon. Prices will start at $700,000 and I have a feeling they will go pretty quickly.

Sources: Commercial Property Executive, SVBJ

Skyline Condos

Housing prices in Silicon Valley are astronomical, but there are still a few good deals in town. Skyline was converted from a rental building to condos not long ago, and their one-bedrooms start at $370k. They also have special financing available that lets buyers own a home for just 3% down.

What I like about this location is that it is a stonesthrow away from both Downtown San Jose and Willow Glen, and it is right on both the Caltrain line and Light Rail. I heard that there can be some noise from the trains for some of the units, but besides that it looks like a great place to live at a surprisingly low price. The amenities include open floor plans, granite kitchen countertops, an outdoor kitchen/BBQ, and a swimming pool that they are adding by summer.

Speaking of the pool, they are doing a groundbreaking party & BBQ on April 5th, from 11am to 12:45pm. You can find out more info about this event over here. To learn more about the condos themselves, visit www.skylinesanjose.com.

Affordable Housing Project Opening in East San Jose

Mayfair Court features 93 units of affordable housing across a 1.44-acre site at 65 McCreery Avenue. It has a surprising amount of amenities for this kind of project as you can see below. The total cost is going to be $23 million and it will include 56 two bedroom units that will rent from $663-1,129 and 37 three bedroom units that will go for $763-$1,301. Rents are based on family income, and you need to make less than $50,650 a year to even qualify. Needless to say the waiting list is already completely full.

UNIT AMENITIES
Sleek interior finishes with floor to ceiling windows
Modern kitchens with energy efficient appliances and espresso cabinetry
Private patios and balconies
Energy efficiencies, including dual pane windows
Central heat and air conditioning
Spacious master suites with plush carpeting
Ceiling fans
Designer tile flooring
Wheelchair accessible

COMMUNITY AMENITIES
Gated Community
Fitness center with cardio equipment
Covered gated parking
Public Wi-Fi area
Fully furnished clubhouse
Computer center
On-site laundry facilities
Children’s playground area
Beautifully landscaped courtyard
Walking distance to shopping and restaurants
Easy access to public transportation
On-site maintenance
Recycling initiatives
Non-smoking community

Source: SVBJ

Saturday Stats: #1 Apartment Boom Town

SpareFoot ranked the top apartment boom towns in the US, and San Jose took the pole position on the list with San Francisco coming in 8th. The analysis looked at the total apartments per person, population growth, the percentage of people spending more than 35% of their income on rent (lower numbers are better), per-capita personal income growth, per-capita GDP growth, and growth in per-capita construction permits for new apartments. The article is an interesting read (especially on how Detroit made the list) and you can access it here.

The Way to San Jose
Here is SpareFoot’s ranking of America’s Top 15 Apartment Boom Towns, in descending order.

1. San Jose, CA
2. Austin, TX
3. Houston, TX
4. Grand Rapids, MI
5. Nashville, TN
6. Dayton, OH
7. Portland, OR
8. San Francisco, CA
9. Dallas-Fort Worth, TX
10. Oklahoma City, OK
11. Seattle, WA
12. Minneapolis-St. Paul, MN
13. San Antonio, TX
14. Des Moines, IA
15. Detroit, MI

San Jose’s continued job growth, along with its shortage of affordable entry-level homes, encourages younger workers to look for apartments, said Matthew Mahood, president and CEO of the San Jose Silicon Valley Chamber of Commerce.

“The apartment housing market has responded to this increased demand and has built and will continue to build new projects. In fact, there are two high-rise projects being built simultaneously in downtown San Jose that will provide for nearly 700 for-rent units in the next two years,” Mahood said.

Source: The SpareFoot Blog

Saturday Stats: San Jose Metro is the #1 Area to Flip a House

Flipping a house involves buying a property, renovating it, and reselling it. It is a key measure of housing market activity. According to 24/7 Wall St., San Jose is killing it when it comes to flipping homes. In fact, they ranked the region as the #1 place in the county to flip a home. The average gross profit flippers nabbed in San Jose is $166,287. The average selling price of the renovated homes came in at $704,762... which is the highest among all areas in the study. Check out the full list of cities (metros actually) below.

TOP 10 BEST CITIES TO FLIP A HOUSE

1.) San Jose-Sunnyvale-Santa Clara, CA
2.) San Francisco-Oakland-Fremont, CA
3.) Oxnard-Thousand Oaks-Ventura, CA
4.) Ocean City, NJ
5.) Los Angeles-Long Beach-Santa Ana, CA
6.) San Diego-Carlsbad-San Marcos, CA
7.) Santa Rosa-Petaluma, CA
8.) Salinas, CA
9.) Seattle-Tacoma-Bellevue, WA
10.) Vallejo-Fairfield, CA

Source: 24/7 Wall St., Hat-tip to Barclay Livker

Saturday Stats: San Jose is the Healthiest Housing Market in the US

According to Zillow, San Jose has the healthiest housing market in the country. Right behind us is San Francisco, followed by Los Angeles in 3rd place and San Diego in 4th. Sacramento came in 10th place, meaning five of the top 10 housing markets are currently in California.

This should help reduce the number of homeowners that are underwater with their mortgage and overall foreclosures, but continued housing appreciation will also make it more difficult for people to afford to live here.

Source: NBC News, Hat tip to Barclay Livker

City Ventures Building 550 Homes at Former IBM Site

Quite a few developments are in the queue for the area where 101 and 85 meet in South San Jose (where there was once an IBM Disk Drive facility). City Ventures will be one of the first to break ground and will turn 14 acres near Cottle and Monterey roads in 550 homes, 400 of which will be rentals (4-story building wrapped around a parking garage). The 150 for-sale units will all feature solar panels and will be prewired for electric cars in the garages. The project is also near the Blossom Hill Caltrain station, giving residents easy access to anything on the Caltrain corridor.

Lennar is also planning to build 840 units on 40 acres. St. Anton Partners is building a 275-unit apartment complex, and Hunter Properties is already under construction with a large retail project in the area. When all is said and done, the area will have almost 3,000 housing units and 320,000 SQFT of retail space.

Source: SVBJ

City Ventures Homes in Morgan Hill

Saturday Stats: Median Home Prices for Ultra-Rich and Everyone Else

Redfin published an article last month claiming that the richest 1% of American are faring better after the housing crash than the rest of the 99%. The median for the top 1% of homes is only 4% below the 2007 peak, while the lower 99% is still 23% behind the overall peak. However, what is more interesting to me is the charts below. In the 20 or so markets evaluated, San Jose came up with the 3rd highest median price for homes in the top 1%, below Los Angeles and San Francisco. On the flip-side, if you look at the bottom 99%, the San Jose area has the highest median price for homes, topping even San Francisco.

What does this mean? At the very least, in terms of housing we are slightly less unequal than other metros between the uber-wealthy and everyone else. Also we have the most expensive real estate in the report for those that are not extremely rich. Nothing really surprising, but interesting nonetheless.

Source: Redfin

Misora @ Santana Row

I received a whole stack of photos from Santana Row's latest residential project, called Misora. This is located right behind California Cafe and Lark Creek Blue and consists of Studios, 1-2 Bedroom Flats, 1-2 Bedroom Lofts, and Townhomes. The amenities and location are as good as it gets, and prices range from the high $2k/mo range all the way up to $10k/mo. The photos below are courtesy of Imagetel Photography.

Japantown "Corp Yard" Project Moves Forward!

An epic $180 million project is moving forward in Japantown. The quick details: 600 residential apartments in six-story buildings with underground parking, ground floor retail and live/work units, a park with cherry orchards, a public stage/pavilion, and a creative center for the arts. You can check out the design for the creative center in the very last image... I hope that becomes the final design because it looks incredible! That building will house San Jose Taiko, CreaTV, Arts Council of Silicon Valley, and other San Jose nonprofits. I'm not sure what more you could possibly ask for in a Japantown project.

You have to click the images below to really see the detail from the scans. The architecture is "modern Japan" with elegant simplicity, wood elements, shifted forms, and framed views. Needless to say, this will be one of the most unique and visually striking developments in the Bay Area. I really hope this comes to fruition and encourages even more projects of this caliber in San Jose.

Sources: Jonathan Bush (thanks for the scans!), SVBJ