Volume 2, Issue 4 Nicholas French, Broker Associate, CRS

December 1, 2007

Quarterly Review
Inside this issue: Happy Holidays
I wanted to take this opportunity to thank all of my clients, family and friends for being such a
Happy Holidays 1
positive and inspiring part of my life. The holidays are typically the time when individuals re-
flect on the previous year, experiences and ways to improve the coming twelve months. I spend
a good deal of time reflecting while running in the evening focusing on how I can improve my-
Write Down Your Goals 1
self in all aspects of my life including business and health. I must admit that I haven’t run lately;
I guess the cold weather is enough of a deterrent, but that hasn’t stopped me from reflecting. I
try to show my appreciation through my actions each day and recognize this as another opportu-
Comic 1
nity to share my gratitude.
You help me grow both personally and professionally through your friendship, mentorship, and
Who Is Catton Proper- 2 of course your referrals. Thank you for trusting me with your family and friends. I am looking
ties? forward to the new year with all the challenges and experiences. I wish your family my very
best for wonderful year of happiness and good health.
Earthquake Insurance – 2
The Value Proposition
Write Down Your Goals
Home Values Drop - 3
We all know that the new year brings dreams of resolutions and goals that typically last a matter
Price per Foot of months. Most of you know that I am religious at writing down goals. Every year I consider
my short, mid and long term goals, enter them into my blackberry and look at them often
Client Testimonial - 3
throughout the year to check progress. I have found this process to be a very effective way at
Mark & Julie Galbraith reaching my goals. A few tips on goal writing: 1) set realistic goals, 2) write them down, 2) short
term goals (3-6 months) are important because you feel satisfaction relatively quickly. The oth-
Property Taxes 3
ers are medium (1-2 years) and long (5-10 years) term goals, 3) Mix it up - have personal, busi-
ness and maybe a vacation goal. By reviewing your goals you will verify being on track and feel
a sense of accomplishment and satisfaction when completed.
Money Saving Tip 4

Current Neighborhood 4
Statistics

Nicholas French
Broker Associate, CRS

4906 El Camino Real #2

Los Altos, CA 94022
650 773 8000 (cell)
650 961 2338 (office)
650 961 5238 (fax)
nfrench@cattonproperties.com
Quarterly Review
Page 2

Who is Catton Earthquake Insurance - The Value Proposition

Properties? Do you have the bottled water, first-aid kit, and other survival supplies ready? As a Bay Area
native it was part of the lifestyle to have an emergency plan in case of the big earthquake. I can
recall hearing stories about the 1906 San Francisco Great Earthquake from my late-grandfather
Catton Properties, discussing the aftermath and how so many families were displaced and the infamous fire-break
pronounced CAT- at Van Ness. I am sure most people agree that it is not a question of if we will have a large earth-
TON, is named quake, but when. Recently a few people have asked me about my views on earthquake insurance
after my family with and the value proposition. I am not an Insurance Agent or an expert in the field by any means,
roots in Los Altos but think that this topic warrants a cost-benefit analysis, so that each family can decide the value
since the 1920’s. independently.
Formerly from San
The two main options for obtaining this type of policy is to purchase a private company insur-
Francisco, my ance program or go into the pot of the California Earthquake Authority. There is a fine line be-
family moved to tween the two. When you call your favorite Insurance Agent and think you are buying their pol-
Los Altos as a icy you may actually be paying into a government program where claims are regulated and paid-
country escape out on a statewide basis. The premiums and coverage can vary dramatically so it is important to
from the city during know the product you are purchasing. The government program is statewide; therefore, similar
the summer months to the post office, some properties are being subsidized by others through standardized pricing.
and later becoming A low risk property may have a higher premium because it is making up for the riskier prop-
home to several erty’s subsidy. However, if you are in a high-risk area your premium may be cheaper. The inde-
generations. I pendent companies pricing schedule should be based more on risk and payout. I think that the
premiums are just smoke for the true costs of earthquake insurance.
chose Catton
Properties when I The main cost associated with the policy is the deductible. This is where it gets fun. Again, the
moved my real actual cost of the premium is fairly nominal, but is an amount that will in most cases never get
estate business back to the individual. In this example the annual premium should range from $1300-1800.
from Palo Alto in This premium is a sizeable profit for a policy that will most likely never pay out. This is impor-
2005 in part as tant because unlike automobile insurance that pays out frequently the earthquake insurance has a
respect to my higher probability of not paying out, so the profit, I mean premiums, compound annually while
family. My late lining the corporate pockets. My sample property is as follows:
grandfather was City: Los Altos, 94022
proud to have the
name in town. I Size: 2,000 square feet
have been very
Type: Ranch home
pleased with my
office move as I Age: 45 years
have become quite
active in the Los Replacement Cost: $500,000
Altos community on Deductible: 15% (there is also a 10% option)
a business and
personal level. Unlike our hazard insurance deductible that may be $1,000 or even $2,500, the deductible for
Catton Properties is earthquake insurance is a percentage of the replacement cost. Yes, you heard me correctly, a
becoming a known percentage of the total replacement cost. If you have earthquake damage in the amount of
business in town $50,000 there is no reason to file a claim because you haven’t reached your deductible amount.
In this case you may be hoping for severe damage. But in the case of severe community dam-
and I am
age, will other government authorities and programs take effect similar to hurricane Katrina?
encouraged about The main costs of earthquake insurance are not realized until a disaster, so the next reasonable
continuing this question is whether the insurance agency will exist at all after such a disaster. It is important to
course. point out the lengthy list of those circumstances and items that do not warrant the policy, how
the policy is paid out and whether a company will be viable at all. We can all do our part to be
prepared and analyze the financial security or burden individually. This article is intended to be
a starting point for your family. It is important to way the costs and benefits of such a program
and how it fits into your family’s situation.
 Volume 2, Issue 4
Page 3

Home Values Drop - Price per Foot Property Taxes

As we have discussed in the past few newsletters it is no surprise that a good majority of the na-
tion is suffering from price drops, high inventory and historic foreclosure rates. There is a clear
correlation between the appreciation and areas that are struggling; those that went up the greatest It is that time of
in the least amount of time are generally coming down the hardest. The recent Monthly Housing
Market Report by New York based Radar Logic Inc shows the most dramatic decline among 25 year; if you
Metro areas on a monthly index comparing the September 30th previous 28-day period . haven’t already
paid your 1st
Why is this important? While many areas are struggling to stay above water our area continues installment of your
to be a market leader and show amazing resilience. This supports the historic data which indi-
cates that certain areas generally have less impact than others during market corrections. Keep in property taxes
mind this is only one report focusing on a specific data set, but it is one of many that consistently they are due by
result in similar findings. We are not addressing whether or not our area will drop in price, but December 10th at
that we appear robust when compared to areas such as Sacramento, San Diego and Las Vegas. midnight. If your
This is vital data when considering whether to make that long term investment in a property or bill has a previous
properties. With rent rates on the rise you will want to watch the market closely and look for owner’s name do
buying opportunities. Data such as this should help you in that decision process. It is far from a not fret, you pay
call of the market collapsing, but rather a transition in the marketplace. This is where that good that bill. If you did
location and floor plan go a long way. Even in the hot areas such as Saratoga and Los Altos,
not receive a bill
over-priced homes in bad locations with poor floor plans aren’t selling as there were six to ten
months ago. This is a positive sign. However, those well-priced homes that show well are still from the County
flying off the shelves. Assessor in the
mail you do not
The real estate market is fluid making it important to analyzing and watch the changes and at
some point make that move. I used to hear the saying “paralysis by analysis” when referring to
get a free pass -
real estate, meaning if you analyze the data indefinitely you will miss opportunities. All of the visit the County
data will not help unless you take the leap. I will work to continually bring valuable data to your website for a copy
through my newsletters. If you have a specific topic you would like me to address please do not (I will be emailing
hesitate to let me know. Happy investing! links to our three
closest counties).
Monthly Housing Market Report If you mail the
Metro Area $/SF % Change Metro Area $/SF % Change payment just
Sacramento, CA $201.24 -14.8% Washington, DC $227.83 -3.2% make sure you
San Diego, CA $296.48 -12.2% Boston, MA $227.77 -3.2%
postmark by the
Las Vegas, NV $162.78 -11.0% Chicago, lL $180.00 -3.2%
Tampa, FL $127.81 -10.1% Atlanta, GA $98.50 -2.9% 10th. If you have
Jacksonville, FL* $119.32 -9.9% Philadelphia, PA $159.37 2.9% any questions
Miami, FL $184.98 -9.5% Cleveland, OH $92.26 -2.8% about your tax bill
Detroit, MI $106.78 -6.7% San Francisco, CA $419.49 -2.8% or a supplemental
Milwaukee, WI $117.22 5.6% Denver, CO $142.60 -2.6%
Los Angeles, CA $367.53 -5.5% Phoenix, AZ $148.18 -2.5%
payment please
Charlotte, NC $98.49 5.2% Columbus, OH $96.27 -1.3% feel free to give
Seattle, WA $226.18 4.8% Minneapolis, MN $154.58 -0.6% me a call or you
St. Louis, MQ $108.43 -4.4% San Jose, CA $463.14 0.2% can call the
New York, NY $296.43 3.3% County directly.
Source: http://www.car.org

Client Testimonial
We were impressed with Nick right off the bat. He listened to us carefully, patiently showed us
all of our options and helped us negotiate the best deal. Now we're happily living in a home
that's perfect for our family!
Money Saving Tip
Current Neighborhood Statistics
No. of Closed % of List Avg
Did you know that as City/Area Year Qtr Sales Price Med Price Avg Price DOM
a homeowner you Cupertino 2007 Q3 106 100.57 $1,267,500.00 $1,389,440.00 31
can dispute your Cupertino 2007 Q2 139 103.58 $1,196,000.00 $1,263,864.00 23
Cupertino 2007 Q1 87 99.18 $1,150,800.00 $1,263,571.00 49
property tax
Los Altos 2007 Q3 78 104.32 $1,785,500.00 $1,897,392.00 32
increase with the
Los Altos 2007 Q2 124 102.71 $1,757,500.00 $1,911,674.00 33
county? If your Los Altos 2007 Q1 59 100.13 $1,643,000.00 $1,732,843.00 65
taxes adjust you can Los Altos Hills 2007 Q3 20 96.03 $2,448,000.00 $2,769,977.00 74
submit a claim to the Los Altos Hills 2007 Q2 37 97.96 $2,705,000.00 $3,156,780.00 91
Los Altos Hills 2007 Q1 27 94.94 $2,249,925.00 $3,191,663.00 148
assessor with
Los Gatos 2007 Q3 77 98.11 $1,470,000.00 $1,590,200.00 53
justification that your Los Gatos 2007 Q2 112 97.09 $1,399,500.00 $1,653,932.00 59
taxes should not be Los Gatos 2007 Q1 72 97.53 $1,475,750.00 $1,572,226.00 71
raised (this will not Menlo Park 2007 Q3 99 100.93 $1,207,000.00 $1,330,007.00 36

work for your Menlo Park 2007 Q2 148 102.32 $1,300,000.00 $1,454,825.00 25
Menlo Park 2007 Q1 85 100.92 $1,250,000.00 $1,522,614.00 58
supplemental tax bill
Monte Sereno 2007 Q3 9 96.62 $2,050,000.00 $2,458,055.00 46
after buying a Monte Sereno 2007 Q2 8 97.41 $1,924,975.00 $2,086,868.00 29
home). You may not Monte Sereno 2007 Q1 11 97.56 $1,850,000.00 $1,856,863.00 70
always be Mountain View 2007 Q3 76 104.40 $1,138,750.00 $1,148,440.00 24
Mountain View 2007 Q2 77 104.70 $1,098,000.00 $1,122,895.00 15
successful, but it is a
Mountain View 2007 Q1 42 104.27 $ 946,500.00 $1,019,072.00 27
worthwhile attempt
Palo Alto 2007 Q3 113 104.15 $1,638,000.00 $1,912,255.00 23
to save money.
Palo Alto 2007 Q2 162 104.52 $1,531,500.00 $1,808,937.00 27
During the process Palo Alto 2007 Q1 99 102.47 $1,500,000.00 $1,950,789.00 43
you will need Saratoga 2007 Q3 86 98.40 $1,666,500.00 $1,887,618.00 80
comparable sales; Saratoga 2007 Q2 109 98.48 $1,688,000.00 $1,867,730.00 50
Saratoga 2007 Q1 78 97.69 $1,687,500.00 $1,889,980.00 80
you can obtain these
Sunnyvale 2007 Q3 172 102.76 $ 930,000.00 $ 956,583.00 19
from various Sunnyvale 2007 Q2 205 104.49 $ 930,000.00 $ 946,384.00 21
websites or ask me. Sunnyvale 2007 Q1 129 102.58 $ 815,000.00 $ 837,896.00 38

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