Earthquake Insurance

Earthquake damaged house in Santa Cruz after the Loma Prieta quake in 1989 (San Andreas fault) - earthquake insurance would help to pay for rebuilding here

Earthquake damaged house in Santa Cruz after the Loma Prieta quake in 1989 (San Andreas fault)

Do you need earthquake insurance?  If you live in Los Gatos, Saratoga, San Jose, or anywhere in Silicon Valley, you are probably aware that it is very likely that we’ll experience a violent quake within the next 30 years.  The San Francisco Bay Area is woven with a number of different faults, some very active, others quiet for thousands of years: San Andreas, Hayward, Calaveras, San Gregorio, Greenville, Silver Creek, Monta Vista – Shannon, and many more.  It is not hard to imagine one of them letting off some serious pressure.

What are the odds of a very severe earthquake in the Bay Area?

I looked up the stats on the USGS site, and there’s a 72% chance of an earthquake of 6.7 on the Richter Scale or more between now and 2043.  The most likely area is the Hayward fault (33%), followed by the San Andreas (22%), per this USGS report: that same report, page 1, it says there’s a 98% chance of a 6.0 quake somewhere in the Bay Area between now and 2043.   So it’s wise to take it seriously (this is reminding me to update my emergency supplies!) Click the image below to go to the pdf referenced above.

San Francisco Bay Area Earthquake Faults and Probability of Major Quake by 2043

San Francisco Bay Area Earthquake Faults and Probability of Major Quake by 2043

What does earthquake insurance cost?

Your premium for earthquake insurance varies based on many factors, including the age of the home, whether or not it is bolted to the foundation, the size of the structure, the exact location, etc.  For instance, if you buy a house in the Santa Cruz Mountains which sits directly on top of the San Andreas Fault, or in Fremont along the Hayward Fault, you would expect to pay more than if you were many miles away from either of these areas.  Further, the amount of your deductible will impact the cost, too – the lower your deductible, the higher your premium.
Also, it should be noted that earthquake insurance covers the structure and may not include the contents of the home.  The point of it is to make sure you can rebuild or repair after a major temblor.    There are separate policies or riders for possessions, but primarily for the essentials, not the frills.  Things such as fine Belleek china (which we lost in the 1989 Loma Prieta shaking) will not be covered.
Most people who obtain this type of insurance will get it from the State of California (even if it’s offered via their regular insurance agent).


Here’s a great resource for info from the California Dept of Insurance:
There’s a link on the page above that goes to the actual CA state insurance site, and there you’ll find a calculator for the cost of premiums from the California Earthquake Authority. [The CEA site says “CEA is a not-for-profit. We are privately funded, and publicly managed by a governing board. We are not tied to the state budget. We are financially strong, with a total claim-paying capacity exceeding $12 billion. Our participating insurance companies sell and service our policies (Homeowners, Mobilehome owners, Condo unit owners, and Renters) on our behalf.]  This is pretty cool as it allows you to change the deductible to as low as 5% and to increase or decrease things like “loss of use” coverage.
For most people, this type of insurance is very costly, perhaps running $2,000 to $3,000 per month with a large deductible and no possessions covered.  Prior to the Loma Prieta (1989) and Northridge (1994) quakes, this type of insurance was more affordable and was more commonly bought by home owners.  Today, the reverse is true.  Statewide, only about 10% of home owners opt to purchase this coverage.

More resources on earthquake insurance

Consumer Reports article from 2014: Should you buy earthquake insurance, is it worth it?

MarketWatch article from 2014, updated June 2016: Despite quakes, most California homeowners don’t have earthquake insurance

What is a cripple wall? (on this site)

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San Mateo County listings of homes for sale on the MLS

Foster City, California Real Estate

Hillsborough, California Real Estate

Menlo Park, California Real Estate

Burlingame, California Real Estate

Can you buy a Silicon Valley home with ten percent down?

House Key:  Can you buy a home with just ten percent down?Silicon Valley Realtors have been seeing a “shifting market” for about a year now, at least in many segments of the real estate market. What does that mean for home buyers and home sellers? One major difference is the amount of cash, or the percentage of cash down, needed to compete in the bidding wars of recent years. Ten percent down purchase offers may become viable again.

Quick reviewL the years of bidding wars – high amounts of cash down, few or no contingencies

Since 2012, we have seen an incredible run up in Silicon Valley home prices, particularly in the hotbed areas of Palo Alto, Mountain View, Cupertino, Sunnyvale, and nearby areas. For each property that went for sale, there were multiple offers – at least most of the time! With some of the extreme cases, homes were selling with more than a dozen offers, sometimes more than two dozen, and selling “all cash, no loans” and also with no contingencies. Sometimes, buyers were lucky and there were no cash offers to compete with. In those cases, the strongest offers (large down payment and few or no contingencies) would simply go to a buyer with the largest down payment and the smallest number of contingencies for things like loan, appraisal and inspection. Much of the time, it would be 30% or more down and no contingencies. (You can check the market stats going back to 2002 at my Silicon Valley Real Estate Report.)

Silicon Valley real estate history repeating itself

For those new to the area, this isn’t the only time when we’ve had a crazy red hot market. We saw this just before the great recession, we saw it in 2000, and we saw it in the mid to late 1980s, and before, too. In fact, it seems to happen about every 10 years. It’s a pattern: economy good, inventory low, qualified buyers fighting to buy a limited supply of Silicon Valley real estate, prices escalate, clauses get increasingly insane (no contingencies, huge down or all cash).

Hard as it can be to imagine, that became the norm. Especially for the nicest homes in the premium areas with shorter commutes and great schools. If anyone asked “Can you buy a Silicon Valley home with ten percent down?”, the answer was a resounding “no” – very very unlikely.

For that reason, in recent years, it has been challenging for home buyers to purchase with less than about 25% down (because with multiple offers, even the gold standard 20% wasn’t enough). The market has been softening a bit, though. Most homes are still selling fast by national standards, but the days on market have been increasing and the sale price to list price has been decreasing. Some homes don’t sell until they’ve had a price reduction. And then they sell with just one offer. We are seeing the return of contingencies.

Smaller down payments will come with a slower, quieter market that is more balanced. A 20% down offer will no longer be viewed badly at all. Read more ›

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What is a cripple wall?

What is a cripple wall? The wall between the foundation and the first floor is a cripple wall.What is a cripple wall? If you are buying or selling real estate in Silicon Valley, you most likely have seen a seller questionnaire asking if the house has a cripple wall, and if so, has it been reinforced.  Most people have no idea what it is, let alone if they have one that’s been improved.

What is a cripple wall?

A cripple wall is a wooden wall between the foundation and the first floor of a wood frame house.  This wooden wall is usually less than a full story high and runs between the foundation and the first floor.  Often it looks like it’s half the height of a regular wall, and it is part of a basement. (Again, there are not many basements in Silicon Valley, so  it’s not a common sight in most neighborhoods. Although many homes have a crawl space, these do not usually have cripple walls if they are on a level lot.)

Put another way, a cripple wall is found when there is a distance of several feet  between the foundation and the first floor.  When you visit those lovely Victorian homes in which you walk up about 6 or 10 steps to get to the front door, and sometimes there are windows peering out from a basement – there’s a cripple wall.  It is the wall between the foundation and the first floor. In the photo, you see basement windows resting on or near the foundation. Above them is the first floor.  This older house has a cripple wall.

Cripple walls are also found on sloped hillside homes. With an inclined lot, part of the first floor may be directly on the foundation, but perhaps not all of it.  Part of the house may have a cripple wall in that case.

Most of the time, cripple walls are found in older, possibly historic homes.  Los Gatos has a number of historic districts and houses that qualify as historic. Part of it was badly hit in the 1989 quake.

What is the risk with a cripple wall?

In California, we have periodic earthquakes, and unreinforced cripple walls can be the weakest part of the structure when a quake hits.  If the walls aren’t strengthened, they can buckle and collapse. The taller the cripple wall is, the more at risk it seems to be for collapsing during a temblor.

Jim and I were living in Santa Cruz and just about to close on the purchase of our first home in the Cambrian area when we experienced the Loma Prieta earthquake.  Our Neary’s Lagoon neighborhood was very badly hit, with many older houses extensively damaged or destroyed. Many had cripple walls that were apparently not reinforced, or not sufficiently reinforced for earthquake safety. (Luckily, our rental townhome stayed structurally sound, though everything inside moved violently.)  The photo below was taken by my better half of a house about a block from where we lived.  Before this happened, they may not have been able to answer our question of the day, “what is a cripple wall?”  But I am sure that in the hours and days after the quake, they found out how dangerous it was to have an unreinforced one.

House with cripple walls destroyed in Loma Prieta earthquake of 1989

Older Santa Cruz house with cripple walls destroyed in Loma Prieta earthquake of 1989

Here’s a helpful video, which I think lays out the risk of danger much better.

How to improve the safety of cripple walls

The goal is to strengthen the cripple wall, usually making a shear wall so that the short wooden wall won’t buckle and give way. Here are a couple of resources that should be helpful for anyone wanting to improve safety with a cripple wall.

FEMA has a guide regarding reinforcement of cripple walls (it is a pdf)
Earthquake Strengthening of Cripple Walls in Wood-Frame Dwellings

And one more helpful video from the same contractor. (I don’t know him but he has a great set of vidos on YouTube.)

Related: Earthquake Insurance

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Los Gatos videos

Mary Pope-Handy YouTube Channel & Los Gatos videos

Mary Pope-Handy YouTube Channel

On my YouTube Channel, you’ll find a Los Gatos videos and number of real estate and neighborhood films for Saratoga, San Jose, Silicon Valley, and California. There are some of me on camera, offering some real estate advice to home buyers and sellers.

Below, get a sampling of one playlist on Los Gatos neighborhoods, parks, downtown, and more. They are in some cases “rough” as I am not a professional videographer, but they will give you a good sense of this beautiful town and the many different and unique neighborhoods & architecture found here! In other words, it’s a good intro to Los Gatos real estate, especially!

Los Gatos videos: neighborhoods, downtown, parks, and real estate info

Click on the menu icon in the upper left corner to see what’s on the playlist or to view a particular neighborhood’s video.

Please check out the channel at to learn more about Silicon Valley real estate, Saratoga CA, San Jose and the Santa Clara County area generally. You can also see some of my sold listings, but the focus is really not on my inventory, so that has not been a big priority. What else? You’ll also find videos “just for fun” on California Missions, Haunted Real Estate, and local history, “The Valley of Heart’s Delight” too.

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Homes for sale in Los Gatos

Homes for sale in Los Gatos include Cape Cod, Ranch, Craftsman, Victorian, and more architectural stylesWant to find homes for sale in Los Gatos?  Depending on your budget, wants and needs, several different home types or locations may be just right for you.

The town of Los Gatos encompasses several different school districts, county pockets, three zip codes and all kinds of neighborhoods, price ranges and housing types.

Los Gatos senior housing for sale

This charming corner of the county also offers one of the only places in Silicon Valley where there is senior housing for sale.  Virtually all of the “over 55” communities are for rent, not to purchase, in Santa Clara County (biggest exception being The Villages in San Jose’s Evergreen district).  There used to be a three senior condo communities in town, but one was converted a few years ago to remove any age restrictions.  Now the main provider of more affordable senior housing to buy in Los Gatos is the Los Gatos Commons (please click on the link to see Los Gatos Commons homes for sale). There’s also a complex for seniors on West Parr Avenue, too.

Homes for sale in Los Gatos with good schools

Los Gatos High School on Main Street

Los Gatos High School on Main Street

Luckily, all of the elementary and middle schools serving the town of Los Gatos and its many neighborhoods are excellent! All of the public schools are highly regarding for grades K – 8.  This is also true for Monte Sereno, which shares many services with Los Gatos.

The high school level is still quite good, but scores are a little lower.  The three high schools which cover the town are Los Gatos High School (Los Gatos-Saratoga Joint Union High School District), Leigh High School, and Westmont High School (Leigh and Westmont are part of the Campbell Union High School District). If you buy a home in downtown or central Los Gatos, the school of attendance will be Los Gatos High, which has the best scores.  Leigh is the school of attendance for students in the far east end of town, and Westmont for the far west end.  Many home buyers want to purchase property with a specific school or district in mind, and for that reason, the schools are a major driver of home values.

Shopping for Monte Sereno and Los Gatos homes for sale by zip codes

Los Gatos & Monte Sereno homes for sale - sold listing on Elm Park95030 is the area closest to downtown Los Gatos and all of it is in the Los Gatos School District.  95032 has a portion that is in or near downtown, but most of it is the area to the far east, north and west of downtown.  Some of it is in the Los Gatos Union School District, and some isn’t (Moreland or Union School Districts instead). 95033 is actually the Los Gatos Mountains – it has a Los Gatos mailing address but is not part of the town at all (except in spirit!), residents there do not vote in town elections, etc.  Homes for sale in Los Gatos will likely be more expensive if they are in the downtown area, both because buyers appreciate the downtown activities, but also because many want those schools.

Confusing? Yes – but if you have a targeted school in mind, just let me know. I’ll help you to find the right house or condo for your budget and needs.

Los Gatos is a fantastic place to live – it’s a scenic, vibrant community with very active community participation (lots of volunteerism), three different free musical concert series each summer, and awesome culture for a small town (a fantastic museum and big, new library, an art & wine festival each August and much more).  Our parks are exquisite and offer something for everyone – from sailing and paddle boats to playgrounds, carousel and train rides, and a fabulous network of trails for hiking, mountain biking, and horseback riding. If you’ve decided to buy a home in Los Gatos, you’ve made a good decision!

Los Gatos homes for sale – view by map – No Registration Required

Below, please browse homes for sale in Los Gatos (houses, condominiums, townhomes) and Monte Sereno (houses only) and listed on the MLS here  – search by map without registering! Zoom in to get closer view of Los Gatos homes for sale, or move map to change  neighborhoods.




More Resources for your Los Gatos Home Buying:

For more information on living in Los Gatos, please visit my Live in Los Gatos Blog

Learn about the many Los Gatos neighborhoods on the Live in Los Gatos Blog

For information on the cost of Homes for sale in Los Gatos and Silicon Valley real estate market (trends, statistics), please see my Silicon Valley Real Estate Report.

Info on the market for Los Gatos single family homes for sale and sold:  Los Gatos RE Report for houses

Info on the market for Los Gatos condos and townhomes:  Los Gatos RE Report for condos and townhomes

This information brought to you by Mary Pope-Handy, Sereno Group, Los Gatos.  I live and work in Los Gatos and am an area native (growing up in Santa Clara and Saratoga).  BRE License # 01153805.

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