The Hot Real Estate Market: It’s Not Just Here, It’s Everywhere

My wife and I just returned from a 5-day whirlwind trip from SoCal to Chicago.  Now that IMG_3220we’re vax’d and hopefully on our way back to a post pandemic normalcy, we took it upon ourselves to go somewhere.  We chose The Windy City.  It’s a great town with lots of museums, history, music and my favorite, architecture.  There were few crowds as the opening there isn’t nearly as vibrant as it is in California, yet still enough was open to make the trip worthwhile.  On our journey we marveled at the incredible skyscrapers Chicago is known for.  We also hopped on the “L” and went to the suburb IMG_3218of Oak Park.  Why Oak Park you ask?  Well for starters, my mom’s from there.  It’s also the home of early Frank Lloyd Wright and the birthplace of his Prairie Style architecture. It also shares the name of a local unincorporated hamlet here in Ventura County (Contact Tim Here).  Once there of course, we explored the local real estate market.  I had to know, was the housing situation in Oak Park, IL the same as Oak Park, CA.  That is, low inventory and not much for sale.  As Tama and I walked the neighborhood surrounding Wright’s home studio, we admired his early work but couldn’t help and notice there weren’t many for sale signs.  Could that be true?  Is the market as tight there as it is back home?  So, I did what I do, and I looked at the numbers.

Being that I am completely unfamiliar with Illinois real estate, the first thing I did was go to Zillow and see how many homes there were for sale in Oak Park, IL to determine if my cursory perception was correct.  Well imagine my surprise when I found 70 homes for sale.  Wow, says I!  That’s a lot more than I thought I’d find.  In fact, it sounded like so many that I almost tossed this article all together.  But then just out of curiosity I decided to look up the number of solds in the past 6 months.  I mean 70 home is a lot if you’re selling say, 15 homes a month right?    Remember that the National Association of Realtors considers a balanced market as 6 months inventory.  In other words, if it takes 6 months to sell all available properties, the market favors neither buyer nor seller.  Less than 6 is a seller’s market while longer than 6 a buyer’s.  Now, I have no idea how many homes sell in a month IMG_3217in Oak Park, IL because I have no idea how big it is – I just didn’t see many for sale, but 70 available looked like a lot on the Zillow map (View Our Listings Here).  Would you believe if I told you that in the past 6 months Oak Park, IL has recorded over 720 sales!  Whaaaat?  Yes, Oak Park. IL with it’s 70 homes for sale, has been selling 121 a month.  Not 15 not 70, 121!  That my friends means that this little suburb of Chicago has about half a month’s worth of inventory.  What the…?  That’s as tight as little Oak Park, CA which has 9 homes for sale and sells 18 a month!

Real estate pundits and prognosticators have been saying for months now that something has to give; that the market is too crazy with demand far exceeding the available supply of homes for sale. That if prices continue like this, naturally we are headed for a repeat of 2008-2012: A disaster; a major crash; a huge correction.  If you accept this premise, it’s easy to understand how one might come to this this conclusion, a conclusion that leaves you saying I’m not buying now.  Instead, I’m going to sit tight and wait for the correction and then I’m jumping in.  After all, how can prices go up 10% in 6 months?  It’s unsustainable.  Difficult to argue with that logic, and yet…

In California, we are used to seeing high prices and occasional crazy annual appreciation.  I mean you don’t get to a median price of over $800,000 if you don’t have long periods of home price appreciation.  The thing is, it’s not just happening here.  Phoenix is the hottest market in the country with over 19% YOY appreciation according to Case Shiller.  What’s so housing-market-on-the-rise-580-1striking about that is that the last time I checked, Arizona was not a slow growth state nor a place that has few areas of flat buildable land.  On the contrary, you can build til the cows come home and still not dent the available desert to build on.  But if there’s a crash coming, why are areas with ample future homes, leading the nation in appreciation?  Doesn’t it stand to reason they would lag the land challenged areas of SoCal?  And why is an old early 20th Century town like Oak Park IL, going so crazy?  According to multiple reports, the white-hot market is not just on fire here in Southern California or Oak Park, IL or Phoenix, AZ, rather as my research suggests, it’s hot everywhere.  If that’s true, what’s this all mean then and when will it end?

They say you never hear the one that gets ya, but I have to tell you, I see no end in sight.  IMG_3210Scary right?  I just looked at neighboring Simi Valley with a population of over 100,000 and there are only 66 homes available.  A low number for sure, but when you consider that there are 262 in contract… wow.  That’s 78% of all available homes, under contract.  Neighboring Moorpark, 20 available and 63 under contract, that’s 76%… Ventura 65% are sold.  Calabasas where the median priced home is pushing $1.4 it’s still a whopping 56%.  The market is sizzling across all communities, cities and states and across all price ranges.  Even NYC and SF are on fire and everyone sang the funeral march for those in the big city.

As muddled as this picture isn’t, one thing is absolutely crystal clear, the market is hot everywhere and that suggests this “bubble” ain’t bursting anytime soon.

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Setting Expectations

Thanks for tuning in!  Today, we are talking about setting expectations in today’s real estate market world. 

The real estate market today is insane, and shows no signs of stopping anytime soon.  So much so, that we have to re-evaluate how we conduct real estate transactions and get you the deal on your home. 

Here’s my take on the situation, and what it may mean for you.  If you enjoyed this podcast, then we would love to hear your feedback, and if you’re in the market, let us know so we can help!

Posted in contingencies, County Line, Economics, Home Buying, Market Conditions, Market Conditions, podcast, Real Estate, Real Estate Correction, Seller Advice, Thousand Oaks | Tagged , , , , , , , , , , , , , , , , | Leave a comment

Bidding Wars: How Long Can This Continue?

Realtors across the country are reporting the same thing: There’s no inventory and sale prices are regularly going over the asking price.  Inman, a real estate news service, recently published an in-depth discussion on the low inventory and crazy bidding wars and cited examples from Raleigh to Oakland, from Austin to Jacksonville and everywhere in between (Contact Tim here).  The reasons for this are many and if you follow my blog, you know I’ve been speaking to the need for housing for a long time.  The situation is acute but still, many oppose new development.  It’s a bit of a case of haves and have nots.

Just last night I commented on the @Nextdoor App where a discussion regarding a proposed development plan near me in Newbury Park, Ca was taking place.  As you can imagine this being in California and all, you’d expect an anti-development slant and there was.  As a point of clarification, I am what you’d call a practical environmentalist.  Protecting Bear Ears and The ANWR etc., I’m all for it and I’ll even give you money to protect it.  But I also recognize we need to house our people.  Just visit Los Angeles or San Francisco and you’ll see how badly we need housing with tent cities commonplace.  Anyway, I chimed in expressing my thoughts that we desperately needed new construction.  Suffice to say, my comments were not particularly well received although, there were a few likes from folks including an executive with @Caruso Affiliated, thanks for that @RickLemmo.  One person actually said they wanted things to go back to how it was 30 years ago.  My initial reaction was, “Me too, I’d love to be in my 20’s again.  Oh, what I would do differently given the chance…”  Alas this is what the movies are for, living in fantasy, a break from reality.  For those who’ve not read my blog or listened to my podcasts allow me to recap what is going on with our housing supply and demand.

Any discussion of today’s housing market and inventory shortage must begin with the financial crisis and the Great Recession.  Created by irresponsible lending practices and Wall Street greed, non-qualified buyers purchased available homes creating artificially driven demand and correspondingly unsupported price appreciation. When those unqualified borrowers could no longer afford the home they’d purchased, they went into default and as we all saw, an epic value collapse ensued.  With thousands of distressed properties flooding the marketplace, builders did what any manufacturer would when faced with a flood of cheaper competition, they pivoted and slowed production.  Then as their land became worth less than what they’d paid, they too let their property go back to the bank.  Consolidation took place with many home builders being acquired by others during this time, while some simply closed their doors.

When the builders did finally come up for air, they found they faced many new obstacles.  A large segment of the workforce had left construction completely when the jobs dried up, so there was a shortage of qualified tradespeople to build their homes.  They found a shortage of available buildable lots so building never achieved prior to recession levels.  Then the pandemic hit bringing shortages of the commodities needed to build a home which has driven up the price of new construction by an industry estimated $24,000 per every new home built in 2021.  This has resulted in a further slow-down in new home construction since the increased costs are not easily passed to the consumer.  As a result, we have both fewer newly built homes for sale than normal but have also not made up for the lost units from years of limited building due to the Great Recession.  This has conspired to make the supply of available homes for sale lower than ever.

With little new construction, all eyes turn towards used homes and the resale market.  One obvious source of preexisting homes is long time homeowners moving into assisted care or downsizing to one-stories.  However seniors, not eager to go into assisted facilities in the time of Covid and unable to find one stories to purchase and move to, are electing instead to “Age in place.”  This is further constricting supply.  Moreover, where once people moved every 5-7 years, now according to NAR, people are staying longer only moving every 11-12 years.  Finally, there’s the issue that at the tail end of the Great Recession, banks like B of A dumped their bad paper and collected supply of foreclosed homes, by selling to @Blackstone and @AmericanHomes4Rent.  These would normally be homes for sale today, but instead are corporately owned rentals. Not only are these homes not for sale, they are largely restricted from sale by FTC rules governing REITs.  Ironically, besides being unavailable to purchase, they are also fully occupied with renters!  Which begs the question, even if we could sell, where would all those tenants go?  Fewer used homes + fewer new homes = lower supply.

OK, so supply is tight we get it, but why is demand so bloody high?  Here we need to jump into demographics.  Several things have conspired to make this situation so acute.  First are the Millennials.  They are the biggest generation ever, even bigger than the Baby Boomers.  They are just now starting to form households and at a much later age than previous generations.  Not only are there lots of Millennial buyers but they also have money.  Many have been working for 15-18 years now so they aren’t buying your typical first-time buyer starter home.  They are instead, competing with the move up buyer for the same limited supply of property. And if they don’t have enough of their own money don’t worry, they’re getting help from parents and grandparents who are, according to Bloomberg, sitting on more than $66 Trillion in assets.

Then there’s low interest rates.  Interest rates are still well below historical averages and would be buyers want to take advantage of these super low rates.  For those who may not remember 1981, as a reminder, the Prime rate was at 21%.  Today Prime stands at 3.25%.  Also don’t forget there’s the reality, that people have to live somewhere and with the shortage of housing for sale, comes an equally short number of rentals.  As a result, rents are very high and these low rates are pushing renters into the purchase market at unprecedented levels.   This means more buyers yet again for the already scant supply.  Finally, there’s the pandemic which has done several things to complicate the situation further.

The Pandemic has made people realize that a home is more than a roof over your head.  It’s been the school, the office and the vacation spot everyone’s going to (View Listings Here).  This has elevated the need for space.  It has also shown us that we don’t need to always live within a commuting distance of the office.  Instead, the remote workplace has freed people up to move further out but this demand in turn has put pressure on supplies in areas where supply was never an issue.  Add this all together, dramatic under building, restricted availability of homes, people just not selling because they can’t find a place to move, coupled with a huge generation of new buyers, plus all the would be move up buyers, historically low interest rates and a new emphasis placed on a home serving multiple needs and you get the 2021 housing shortage, a shortage of epic proportions.  When will it end?  Not for anytime soon I’m afraid.   I predict we won’t see a measurable drop off in demand until we get to 5% interest rates.  And when will that happen?  If you believe the Fed, not until 2022.  That means we are in for continued and unprecedented price appreciation because sometime in 2022 is a long time from now.

Posted in County Line, Demographics, Economics, home builders, Home Buying, Home Selling, Market Conditions, Market Conditions, Real Estate, Real Estate Correction, Recession, Seller Advice, Thousand Oaks, Tim Freund | Tagged , , , , , , , , , , , , , | Leave a comment

Escalation Clause: What Is It And Is It A Good Strategy?

Perhaps you’re a buyer and you’ve never heard of an escalation clause.  Or maybe you’re a young Realtor and you’ve never come across one before.  An escalation clause is a term in an offer where the buyer agrees to increase their offer by a set amount over and above the actual highest offer. It’s a way to help a buyer out bid the competition in a multiple offer situation.  It’s pretty crafty if you’ve never seen or used one before.  An escalation clause goes something like this:  Here is my full price offer for $700,000 and we agree to pay $2,000 over the next highest offer.  In this scenario, if a competing buyer wrote at full price, you would escalate your offer to $702,000.  If a competitor wrote at $710,000, our buyer would pay $2,000 over the $710,000, thus their final offer would be $712,000.   Pretty clever.  If you’re a buyer, this strategy is designed to help you win the bid (View Tim’s listings here).  It’s an obvious win-win right?  The buyer gets to win the house and the seller gets more money.  If that’s so then, why doesn’t everyone do it and why do I decline/counter, offers with escalation clauses on my listings?  Before I tackle why I decline offers with escalation clauses, let me explain how multiple offers are working in this market.

With inventory at historic lows, sellers are commonly receiving multiple offers on their property.  This is because there are far more qualified buyers than available properties listed for sale.  As an example, I just listed a home in Ventura for $599,900.  I had to use a digital scheduler to manage the showings which I set up for every 20 minutes.  I had 24 showings on Saturday and another 20 on Sunday.  I then put it on hold and sat back and waited for the offers to come in.  At last count I have 16; I’ll be presenting them today.   In this scenario the most common response from a seller in this situation is a counteroffer called “Best and Final.”  This essentially turns the sale into a blind auction (Search for homes here).  Buyers hate them, because any buyer would rather a seller just come back and say, “give me this price and these terms and it’s yours.”  However, because we are seeing so many multiple offers, it’s become the standard to counter best and final and then a seller chooses.

You can see that in this environment having an escalation clause gives you as a buyer, an advantage because you will always have the highest price.  Of course, if there’s no cap you could find yourself spending way more than you bargained for.  When I’ve used this technique, I’ve often capped it by writing in an “up to” dollar amount to limit my client’s liability.  For many this trick is working, so why won’t I allow an escalation clause on my listings?

An agent just asked me this yesterday on my Ventura listing.  I told him I don’t allow them for 3 reasons.  First, it’s not fair.  If a buyer responds with their best and final, they expect that their competitors will do the same.  But the guy who wrote with the escalation clause did not have to since he built in a way to jump over everyone else.  Second, what if everyone writes with an escalation clause?  How would I and the seller deal with that?  We would have to go back and ask each one to rewrite and that’s ridiculous.  Finally, an escalation clause doesn’t necessarily get the seller the highest price.  Think about it.   If a buyer places a $2,000 escalation clause on and the highest offer for our $700,000 asking price home is $710,000, the seller would get $712,000.  But if that buyer with the escalation clause has to come up with an actual number to win, maybe they choose to “buy the home” and writes a $725,00 or higher offer.  This gets the seller the possible highest price.  I mean that’s sort of the whole point to a blind auction (Contact Tim here).  It’s also why buyers hate “best and final” because they very well may end up bidding against themselves and have no way to know it.  As you can see that while an escalation clause can be a good ploy for a buyer when they’re the only one doing it, it isn’t fair, doesn’t always fly and almost always works to the disadvantage of the seller.

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“Should I Buy a Home in This Market?”

Hello everyone!

Thanks for tuning in to another episode of my podcast!  This time, I am here to offer my advice to you if you’re looking to buy a home in this RED HOT market.  Buying a home in this market can be incredibly difficult due to the competitive nature we are currently in, but still incredibly rewarding to get into something to call your own.

If you like the podcast, feel free to subscribe so you don’t miss any others, and check out our past episodes as well!

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Market Update – February 19th, 2021

It’s a crazy real estate market.  There, I said it.  How can you tell you ask?  Allow me to elaborate.  The first thing is that in many of the markets I work, there are fewer than 2 weeks inventory.  This is especially acute in the sub $750,000 range.   But even in the higher price points those number don’t go Crop3much above a month’s worth of inventory.  That said, I am seeing more homes come on the market which is seasonally consistent with historical trends.  It is the hot spring market after all.  This is also the first week over week that inventory actually went up in 2021.  Here in the Conejo Valley the number of available homes listed for sale went up 8% this week.  But that means it went up by a whopping 14 homes across all price ranges. What’s this all mean you ask?  It’s a seller’s market and it’s changing the way agents search property, sellers price property and buyers write offers on properties.

First, let’s start with agents.  (Search homes here)  In the past, I would set a parameter of price and area.  This of course is unchanged.  But then I would sort and start scrolling through in order of price.  This is where I have changed.  I now sort by days on market first and I start with zero days and stop at 3-5 or I may go out a week.  There are a couple of reasons for this.  First, this market is so hot that I want to get shack1me emails out to my clients right away on anything new.  Second, if it hasn’t sold in 5 days, there’s something wrong with it.  Now I want to pause on this to let that sink in.  Something wrong with it.  OK, so I don’t really think there is anything wrong with it per se, but it’s likely mispriced for what it is.  Funny thing about why a home doesn’t sell.  If you find an objection with a home you just need to put the phrase “At that price” at the end of the objection.  For example, the yard is too small… at that price.  If it were $100K less would you say the same thing?  Probably not.  The condition is awful… at that price.  I don’t like the location… at that price.  See how that works?  Now in this market, since it’s so hot, if a home has gotten an offer, there’s a reason and that reason goes away with “At that price.”

Regarding Sellers, the above is notable because when setting a price you have to ask, are you better off pricing it a little under and hope you get multiple buyers competing or a little higher to test the marketplace? If you choose the latter, that’s perfectly fine and in fact many times this is the exact course I recommend.  Understanding this is one way where a great agent differentiates themselves from the masses. (Contact Tim here)  But if you are a seller getting ready to price your home, you have to ask yourself this question: If I come in too high, how much am I going to have to reduce to get multiple parties interested enough to come and look or look a second time?  If I were typing this on my phone I’d put the emoji with all the teeth showing because in California, at $10,000 or $20,000 price reduction don’t mean nuthin’!  If you haven’t sold in 45 days, no one is racing to your door for a $10K cut, well that is if you’re over $500,000 asking anyways…  Not only that, go back and reread how agents are sorting listings.  Again, this is a crazy market, but a seller can still blow it.

As for buyers, you guys know how brutal it is out there.  My buyer just lost out on an offer in the Rancho Park area of West Los Angeles.  And yes, I do work the City incase you were asking… Anyway, the charming 1927 Spanish Bungalow was expanded to 1,700 square feet, had a Wolf range and the carriage house (garage – but only wide enough and long enough for a Model T or horse and buggy) which in this case was  finished with high tongue and groove ceilings and HVAC, was listed for $1,595,000.  We were one of 110 showings and 40 offers.  We offered $1.7M, $105K over ask.  The sellers actually only countered the top 9 of which 5 were all cash.  The counter by the way, also BiddingWardemanded a 15 day close and no, repeat no contingencies.  Not loan, appraisal or most importantly, as is – no investigation contingency.  In other words, once your earnest money is in escrow, it’s subject to forfeiture.  Nuts, right?  So, what does that mean if you’re a buyer?  The answer is if you see a home and really like it, don’t get hung up on the asking price.  It is not the same thing as the selling price.  Asking if designed to get multiple offers, will get multiple offers and the price will go higher.  Therefore, you need to look at any home in the context of other similar, alternative homes you could buy at the same time and if there aren’t any, or you’ve lost out on some already, you have to step up and give it your best shot.  My counsel to my Westside buyers was that I thought the home was going to go for $1.8 (it’s actually is in escrow for closer to $1.9 BTW) and that whatever their upper, upper limit was for that property – and it was an amazing never-move kind of property and location – go in with that.  So buyers, do not assume you will get a counter if there are multiples in play. Sellers who receive a lot of offers, while excited, are exhausted too.  They want the process over just as bad as all the buyers.  This means they’ll pick the smallest number to counter they think they can to get the best price and terms.  Sorry for the tough love but that’s how it is right now and for the foreseeable future.

Oh, what about appraisals you ask?  Simply put, it’s a problem so you need to be prepared that you might have to come up with additional cash.  I will say this about appraisal, first they are backwards looking so in every appreciating market since the dawn of time (Think caveman here: Baku: “Grog.  I give you 5 brontosaurs femurs and a wooly mammoth tusk for your cave.”  Grog: “What?  Baku, you a crazy man.  That last year price.  Cave worth 2X that today!  This a hot market!”)  (See Tim’s latest cave listing here)  Yesterday’s closed sales data doesn’t support today’s rapidly rising home values.  caves-in-oregon-1080x675But also, the appraisal isn’t telling you what the home is worth.  Value according the National Association of Realtors is defined as follows: “A home is worth what a willing buyer and willing seller agree on without the presence of duress.”  You offered, they agreed, that is now market value by definition.  In fact, even though you’re paying for the appraisal, it’s not for your benefit at all.  The appraisal is for the bank’s benefit so that when they go to sell the loan, they can substantiate the loan to value ratio with an accompanying appraisal.  Don’t get hung up on what one appraiser says, especially when if it does come in low, you’ll want to say to the guy or gal appraiser, “Oh yeah?  Find me one for that and I’ll buy it!”

If you like what you read here, please reach out and let me help you sell YOUR cave for top dollar.

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First Time Homebuyers Episode 9: Closing & the Final Stretch

The final episode of our First Time Buyer’s podcast!  Thank you guys for sticking around with us.  In this final episode, we finish up the buying process with the closing, and the final stretch of getting everything done.

Sit back, relax, and enjoy the podcast! We would love to hear your feedback! You can reach us on Facebook, Twitter, LinkedIn, or Instagram.

If this podcast seems like it’s the right fit for you, and you’d like me to assist you in this process and make it painless and easy, give me a call (805-427-3008) or send me an email (Tim@1000OaksRealEstate.com).

You can also check out our listings here!

Enjoy the podcast below, and stay tuned for future episodes!

Posted in County Line, Disclosures, Home Buying, Home Selling, Market Conditions, podcast, Real Estate, Thousand Oaks, Tim Freund | Tagged , , , , , , , , , , , , , , | Leave a comment

First Time Homebuyers Episode 8: Contingencies

Welcome to yet another episode of our First Time Homebuyers podcast series!  In this episode, we talk about contingencies!  Learn what contingencies are and what they mean when they come up during your real estate transactions.

So, take a seat and enjoy the podcast! We would love to hear your feedback! You can reach us on Facebook, Twitter, LinkedIn, or Instagram.

If this podcast seems like it’s the right fit for you, and you’d like me to assist you in this process and make it painless and easy, give me a call (805-427-3008) or send me an email (Tim@1000OaksRealEstate.com).

You can also check out our listings here!

Enjoy the podcast below, and stay tuned for future episodes!

Posted in contingencies, Disclosures, Home Buying, Home Selling, Real Estate | Tagged , , , , , , , , , , , , , , | Leave a comment

California: What is to Become of Her?

The following are excerpts from a recent conversation with Lady California.

Tim Freund: “So Lady California, you’re looking a less than your usual sunny self.  What can you tell my readers about your current health?”

Lady California: To quote one of the millions who have come to and thrived in our golden state, Mark Twain, “Reports of my demise have been greatly exaggerated.”  It is true that Covid-19 is devastating our state.  No Doubt about it.  The reality is, we are like our own nation here except that we are not able to stop people from other states from coming in like a true sovereignty would. As a result, our state is a magnet to the virus’ expansion.  Furthermore, as the breadbasket, import-export hub and technological center of a nation of 330 million people, we could hardly do that to the rest of the other 49 states.  If we ever did, the damage to those states would be catastrophic.

TF: Wow, when you put it that way… since this is a real estate and economic blog, let’s talk about what’s happening to real estate in California.  (Search homes here)  I mean home-prices-rising-twitteryou must be seeing a mass exodus of residents fleeing your over-taxed, over regulated and terribly expensive place, right?”

LC: Again, this is exaggeration.  Yes, Elon Musk has said he’s making his home elsewhere and taking a fabulous native California business enterprise, in part with him.  This should not come as a great surprise given, his company’s stock price has skyrocketed and he’s seeking someplace that will tax him less than I would.  That said, don’t be surprised if you see him cruising around both ends of our state.  Our climate is far more amenable than Texas. 

TF: Well, it would seem that maybe the high state tax rate is contributing to he and others leaving the state, don’t you think?

LC: Yes, and all those tree hugging liberals, oh and don’t forget about the high homeless population.  Look, there’s a reason such incredible enterprise can foster here.  One big reason is our free and experimental thinking. 

TF: The homeless problem is pretty intolerable right?

LC: The homeless issue really comes down to local land planning and NIMBY’s trying to hold on to what they perceive is theirs.  I admit it is a dichotomy that in a place where new ideas and innovation thrive and prosper, those same elements conspire to keep things “As they were.”  It’s a little like how we do so much outside our home, yet in many towns, don’t even know our neighbors, instead choosing to stay in our own four walls.  As for our housing shortage, it’s really the lack of construction that is the true culprit. 

TF: So why do people stay then?

LC: The great weather has something to do with it, don’t you think?  But beyond that, the afore mentioned freedom of thought and the entrepreneurial spirit is a big part too.  The san-diego-heroability to think and create without the limits of preconception.  That freedom blossoms here like no other place on earth.  That’s why people want to live here and why they stay here.  People from all over the world dream of life in California and our immigrant population is one of the many catalysts of our success.  Back to your earlier question, are people are selling and leaving?  There’s always people coming and going when you are a state as large as California.  But have you noticed that when one leaves there’s someone right behind them to buy that home, plant roots, start a new company?   California is where dreams come true.  Our history is the American Dream. 

TF: But what about the high taxes?

LC: OK, so not to get too political, but since you’re bringing up taxes… if the Federal government gave California a share of the Federal tax revenue equal to our contribution, we would not have to tax our residents nearly as much.  But when you are forced to carry and subsidize over half of the nation with your tax dollars, the money to serve our own population has to come from somewhere.  It’s funny how easy some find it is to criticize California when their state is on the California dole.

TF: Ouch.  So let me try and circle back a bit here.  Regarding the housing situation, are you saying that people aren’t leaving the state en masse?

LC: That’s exactly what I’m saying.  Take the Conejo Valley right there along the LA/Ventura border where you sell as an example.  If more people were leaving, why is it that you are selling more homes than people are listing?  I mean you would know better than I, what’s happening to your inventory?

TF: You’re right about that.  We are selling more homes than are coming up for sale.  (Contact Tim here) Our inventory is less than half of what it was a year ago, yet we are selling an above average number annually.  I guess it’s like you said, as soon as one person leaves, there’s someone right there to buy their home and take their place.

LC: Ah-Ha!  So, what you’re saying is that people are lining up to buy homes even though it’s being reported that people are rushing to leave California?

TF: Yeah, I guess I am.  I suppose that’s one way to deal with population control, price people out and they leave… weird but OK…

LC: Look, the cost of living here is problematic, there’s no denying it, so we need to build more housing for people to live in.  As for the people who leave their job and start over in Texas or Idaho, they can and should if it’s the right move for them, but for most, leaving is just not desirable despite the high cost of residency here.  Were you aware that people in California live longer than any other state except Hawaii?  Why do you suppose that is?

TF: If I had to guess, a healthy lifestyle?  Healthier eating?

LC: That’s part of it.  There’s also better health care here – you’ve heard of Covered California, I presume?  But the biggest issue is the quality of life.  The ability to surf in the morning and ski before sundown.  When you are the farm of the nation, you get the best food.  Have you tried the strawberries from Oxnard recently?  This because the California farmer is the best!  They have the best soil, best air and best sun – though climate change shu-USA-California-LosAngeles-ManhattanBeach-702538294-Chones-1440x823is certainly creating a host of new problems, especially with water.  When you have lots of open space you get to go out and do things.  When you have great job creation, people find work they enjoy doing and when you have tighter regulations, your water and air isn’t as poisoned as it is elsewhere.  It used to be, but our determination to care for the planet and each other has changed that, though it’s always a work in progress.  California is leading the country in solar and electric vehicles, emission control etc.  Virtually every trend, be it environmental like conservation and preservation or physical like yoga, skateboarding or mountain biking, takes hold here first and that improves American life nationwide. 

TF: OK, I’ll buy, but what do you see going forward?

LC: Once we get the virus more managed, we will boom.  How many places can boast Universities like UCLA, CAL, UCSD or UCSB; Stanford, Cal Tech, Cal Poly and a state university and community college system that is the envy of the world?  That educational opportunities in California are the backbone of our nation’s greatest innovation.  Of course, people leave but nowhere would people rather live more than California when given the choice.  That’s why so many companies start here, build here and thrive here.

TF: Well on that note, I wish to thank you and best of luck to you and the Golden State.

LC:  Thanks for having me Tim, it’s been my pleasure.

All opinions expressed herein are of the guest and do not necessarily represent those of the author or The REC.

Posted in County Line, Disclosures, Home Buying, Home Selling, Market Conditions, Market Conditions, Real Estate, Refinancing, Remodeling, Seller Advice, Thousand Oaks | Tagged , , , , , , , , , , , , , , , , , | 1 Comment

The American Home 2021: Trend Towards Home Improvement Continues

Everyone agrees that amongst some of the biggest surprises brought on by the Covid-19 Pandemic, is the trend towards home improvement.  The obvious need for a home school, home office or two in many cases and the need for at home entertainment in light of the lockdowns, cannot be understated.  I drive my neighborhood and see painter’s vans, contractor’s trucks and huge dumpsters everywhere.  I hear construction in many of the neighborhoods I sell.  It is clear, that the home needs to be more functional and versatile than ever.  Since home improvement is not going away anytime soon, I thought I’d run through a few of the interesting things I’ve discovered and even some I’ve implemented in my own home. It’s not novel to say that the kitchen is the most important room in the house.  However, the trend towards open and great room floorplan design/re-modification, does create an issue with the messy kitchen, especially when multiple people are working from home.  One solution making its way onto the scene is what De Giulio Kitchen Design of Chicago has named, the Layered Kitchen.  The concept is that you have the “show” Bernalda_COP_Kitchen_Thumbnailkitchen and the “prep” kitchen.  The former being the center island often with stools for casual dining or working on a laptop, that is open to the family room for all to see.  Clean and open.  The latter is described as a prep kitchen, but this doesn’t have to be a second full sized kitchen rather, a back area or sectioned off partial room.  It can even part of an adjacent laundry.  This back “layer” would have a disposal sink, maybe a second dishwasher and a small workspace for cutting and chopping.  Your blender and food processor and maybe even coffee station can be part of this “second kitchen” as well.  Again, this doesn’t have to be a huge space, rather one that is just large enough to get the prep work done, but small enough that it’s out of sight and can be closed off.  It is not intended to take a ton of space from some other part of the house.  Many of our Asian communities have adopted a similar idea for cooking with a wok.  We find the “wok kitchen” listed as an exciting upgrade feature in many high-end homes in places like San Marino and Arcadia (Search for homes here).  Often, all it consists of is a place with a single burner gas range and a wok-holding grill and of course a super powerful vent hood. Another interesting remodeling trend is the granny flat or ADU (Accessory Dwelling Unit).  I have written about these before, but in an article I read by designer Barbara Ballinger, she suggests people are putting a shed in the back and not just for storage (which is a huge problem with so many studying and working out of the home) but rather, as an office or play room as well as a visitors’ sleeping quarters.  Now before you start imagining some chainsaw horror flick or grandpa’s tin shed filled with lawn sprout_exterior01tools and spiders and smelling of gasoline, check out this Boulder Colorado company called Studio Shed.  These guys are doing some amazing things.  Like a number of companies out there, they are offering prefabricated ADU’s but they are also offering prefabricated sheds.  These “sheds” start at 8’x10’ and can go as large as 10’x18’.  You can get them with prewired electric, windows, doors including walls of glass and French doors. I mean, these things are cool!  Some are even designed to be music studios, an amenity very dear and close to my heart.  (Read about Tim here) I priced one out at 10’x12’ or the size of a typical bedroom, added electric, French doors with dark aluminum and a wall of glass, with cedar shake siding (so we’re talking tricked out by their standards) and the total was $24,248!  Now of course this doesn’t include permits if required nor does it include the footings, deck or pad that the shed needs to be mounted to, but still, that’s amazing and it looks so cool! It’s important to know that you don’t have to spend a fortune to make really nice and inspirational improvements to your home.  Paint is always a good idea and guess what?  Color is making a comeback!  Whether that’s color of cabinets or walls, bold is back.  Houzz reports in their Kitchen Remodeling Trends of 2021, that while white cabinets still remain most popular, there’s a move afoot to have the lower cabinets have color, while the uppers remain white.  Hardware is another place to make improvements too.  If you have a tract home, maybe it’s time to change the door hardware from the 1990’s brass to something different.  One modest change if you don’t want to replace all the hardware, is to use gold hardware on cabinet pulls and bars.  If you are looking for a little inspiration on color, the British paint colorists at Farrow and Ball have put out a host of paint colors inspired by The Natural History Museum in London.  With “colours” like Skimmed Milk White, Lake Red, Imperial Purple and Scotch Blue, you see that color is back! Finally, let me share a couple of little things we’ve done to our home since the pandemic started.  Like most of you, we found ourselves cooking a lot more since the pandemic started.  Having professional quality cooking tools seemed like a necessary item so we bought some All Clad D5 pots and pans from William Sonoma.  They look beautiful but they took up a lot of room.  To solve our space demand issue, we hung a cool pot rack we’d purchased from Amazon, from the ceiling.  (I did it myself I’ll have you know) 2021 Pot RackSince the All Clad is not only functional but beautiful, our kitchen took on an entirely new look and this, frankly, made cooking in the kitchen an inspirational experience.  Lastly, now that winter is upon us, we finally bought a gas fireplace insert in a kit with blue colored glass.  ($400 from our local fireplace store.)  What a change!  Instead of using real wood as we’ve been doing for years though sparingly due to the mess, I now have instant contemporary ambience in my family room!  Not to mention a great way to warm the space on a cold winter day while I work from home.  OK, it hasn’t been cold in Southern California so far this season, but the glass does look cool and I do rather enjoy working in front of the fire.  And while these subtle improvements may seem like little things, often times little tweaks are all a home needs to become more functional, homier and perhaps just a little prettier.  And after all, when it comes time to sell, I can assure you, pretty sells.  (Contact Tim here) Done something interesting to your home?  Let me know!
Posted in Curb Appeal & Cleaning, home builders, Home Buying, Home Selling, Real Estate, Remodeling, Seller Advice, Tim Freund | Tagged , , , , , , , , , , , , , , , , , , | Leave a comment