How Multiple Offers Affect Sale Price

sebfreyBlog, Charts and Statistics, Commentary, North Monterey County Real Estate, Santa Cruz Real Estate, Sellers, Silicon Valley Real Estate

It’s that time of year again! Early in the year, inventory is low – but there’s no shortage of eager buyers looking to purchase a home. While an imbalance of supply versus demand is not uncommon in the greater San Francisco Bay Area, it’s especially acute early in 2020. New inventory is trickling onto the market, and it will continue to ramp up as we get into spring. But at the moment, there’s nowhere near enough new inventory to meet demand. Sellers with well-priced homes across the region are being rewarded with multiple offers from prospective purchasers. That is of course a wonderful situation for a seller – but it’s more like a nightmare for buyers. Many of these buyers will have been looking for months, even years, before they finally put an offer in on a property…only to find out that the seller has a number of competing offers to choose from. A buyer never knows how a seller will respond in a multiple offer situation. Will they accept just one offer from the “best” buyer? Will they make counter offers to specific buyers? Will they ask all buyers to respond with their “highest and best” offer, knowing that there are multiple offers on the table? What’s more, a seller can make different counter offers to different buyers, with different prices and terms. I’m helping clients manage a few multiple-offer situations at the moment, as listing agent and as buyer’s agent. Working with buyers in a multiple offer situation is especially fraught, because of course, … Read More

California Real Estate Forecast for 2020

sebfreyBlog, Local, Santa Cruz Real Estate, Silicon Valley Real Estate, Video

As you may have heard, I recently became a Broker Associate with Compass in Los Gatos (the former Alain Pinel REALTORS). There are a lot of benefits to working with a large, upscale brokerage – one of them being that you can get access to valuable information before the competition. Yesterday, our office had the first meeting of the year and it featured a feature presentation by Jordan Levine, the Deputy Chief Economist for the California Association of REALTORS. I have also seen many presentations by Jordan’s boss, Leslie Appleton-Young, and I even had her as a guest on an episode of the Bay to Bay Podcast. Jordan, by the way, is also a podcaster as he is the co-host of California Association of REALTORS Housing Matters podcast. Video of California Real Estate Forecast for 2020 The presentation was about 40 minutes long, as there was a lot to digest in there. The bottom line is that the 2020 real estate market is expected to look a lot like the 2019 real estate market: tight inventory, low interest rates, poor affordability, but with slightly more sales at somewhat higher prices (statewide, but the greater Bay Area should be an exception). Key Points for California’s 2020 Real Estate Forecast Housing prices may be up, but actual mortgage payments are down Lowest Unemployment in 50 Years Prices at the very high end softening, lower priced homes rising in price. Higher-end homes taking longer to sell U.S. 2020 GDP Projected @ 1.6% (down from 2.2% in 2019) U.S. Inflation … Read More

Why I Moved to Compass

sebfreyBlog, Commentary

On November 1, 2019 I joined Compass as a Broker Associate. This is only the third brokerage I have been affiliated with in nearly 17 years in business. I was with my first broker for ten years to the day, before I opened up my own brokerage in early 2013. For almost seven years, I operated as a Broker/Owner, Captain of my ship, with complete freedom to run my business as I see fit. So why did I trade in my autonomy and throw my lot in with Compass? To answer that, I’ll begin by explaining what Compass is. Compass is a real estate start-up company based in New York City. They’ve actually been around for seven years or so at this point, but they have really grown in the last couple of years, fueled by massive investments from a number of blue chip firms and private investors. You can see a list here. Compass has a goal of achieving 20% market share in the top 20 U.S. markets by the end of 2020. As I understand it, they’re very nearly there already. Locally, they purchased a few high-performing northern California brokerages in 2018 and 2019 – Pacific Union International, Paragon, Alain Pinel Realtors, and Central Coast Realty Group. Their current agent count nationwide tops 12,000 with about 250 offices coast to coast and over 2,000 employees on staff. Compass is not a franchise. Every Compass office is 100% owned by the company. They have a number of “organic” offices throughout the greater Bay Area in … Read More

Talking AB1482 on the Radio

sebfreyAudio, North Monterey County Real Estate, Santa Cruz Real Estate, Silicon Valley Real Estate

On October 18, 2019 I appeared on KSCO Radio in Santa Cruz as a guest on the Mike Young Radio Hour. Mike is a REALTOR I have known virtually my entire career in real estate. He has a weekly radio show and he usually has another Santa Cruz REALTOR, Dennis Casey, as his wingman. For the October 18 2019 airing, I was invited on as a guest to discuss the recently-enacted California AB1482 legislation, which establishes rent control state wide in California. We touched on a few other topics of interest to followers of Santa Cruz and California real estate as well – so if you want to learn more about AB1482 and rent control, please listen to the audio of the radio show below.

Stop the Madness! Just say NO on AB 1482


The good folks at the California Association of REALTORS (C.A.R.) have sounded the alarm bell. They are urging all California REALTORS to call their state representatives and tell them to VOTE NO ON AB 1482. They have also asked that we REALTORS ask our clients to do the same. I recorded a quick episode of Seb Frey TV so you can all see just how easy it is to call your Senate and Assembly representatives. Contact Info for some Local Politicians State Senator Bill Monning: (916) 651-4017State Senator Anna Caballero: (916) 651-4012State Senator Bob Wieckowski: (916) 651-4010State Senator Jim Beall: (916) 651-4015State Senator Jerry Hill: (916) 651-4013Assemblyman Mark Stone: (916) 319-2029 Issue Background Under current law, unless a local government has enacted rent control, there is no statewide cap on rent. Additionally, current law allows landlords to end a tenancy without cause when a lease expires. That is to say, when a tenant’s lease is up, the landlord can ask them to move out, for the only reason that it’s because the contract has ended. As introduced, AB 1481 and AB 1482 – previously combined into one bill, AB 1482 – would have established a rent cap of 5% plus regional CPI, as well as “just cause” evictions after 6 months of tenancy, through 2030 on all rental properties; required relocation assistance up to 3 months when a tenant is evicted under specified conditions (that is, the landlord pays the tenant to move out); and included insufficient vacancy decontrol language. C.A.R. had negotiated with our government to soften 1482 into … Read More

2019 Mid-Year Real Estate Update for Santa Clara, Santa Cruz, and Monterey

sebfreyCharts and Statistics, Commentary, Local, North Monterey County Real Estate, Santa Cruz Real Estate, Silicon Valley Real Estate

And here we are, just past half-way through 2019! Happened so quick, I’ll bet you feel a bit of whiplash. It’s been an interesting half-year so far, especially when it comes to the Monterey and San Francisco Bay Area real estate market. For this 2019 Mid-Year Real Estate update, I took a dive through the MLS (Multiple Listing Service) to dig deep through the numbers for Santa Cruz, Santa Clara, and Monterey counties for the first six months of the year. So how is our real estate market doing, at the mid-point of 2019? One that comes through loud and clear is that just like politics, all real estate is local. The story told through these numbers is much different in all three counties.  If you want, you can skip down to the county that interests you most:  Santa Clara, Santa Cruz, or Monterey. Seb Frey Talks Real Estate Mid-2019 on Seb Frey TV Santa Clara County Santa Clara County is the heart of Silicon Valley – what happens there affects the real estate market for a large portion of northern California, and all of the San Francisco and Monterey Bay Areas.  The numbers for the first half of 2019 are markedly different than the first half of 2018.  In particular: Homes are taking almost twice as long to sell this year (93% longer) Price Per Square Foot has dropped 6.76% Average Sale Price has dropped 6.63% Median Home Price has dropped 8.95% Sale to List Price Ratio down 8% Home Sales are down 9.5% this … Read More

Silicon Valley Real Estate Prices Drop Sharply in Q1 2019

sebfreyCommentary, Local, Silicon Valley Real Estate

A couple of days ago I attended a regional meeting of local REALTOR Association leadership. We had officers and staff from around the greater San Francisco Bay Area all gathered in a room. Folks from San Francisco, Contra Costa, Alameda, San Mateo, Santa Clara, Santa Cruz, and Monterey counties all got together to talk about how we can better serve our customers. I sat next to a broker from Santa Clara county, and I asked her how the Santa Clara County Market is doing. “It’s bad,” she said. “Bad?” I asked. “How bad?” And she said home prices are down 10-12% versus a year ago. That would be pretty bad – if it were true. I hear stuff like that a lot from different agents. But then when I go and dig into the stats, I usually find there’s more to the story – or a different story altogether. So imagine my surprise when I dug into the stats and found that actually, prices were down by much more than 10-12%. Houses took about twice as long to sell in Q1 2019 vs. Q1 in 2018. And the number of sales has dropped by nearly 10%, while the number of new listings is up by almost 4%. Santa Clara County Q1 2019 Real Estate Wrap-Up Video In case you’re not a regular consumer of my social media, you may not know that I have a “TV” show called SebFrey.TV – I made a special episode where I did a wrap-up of the Santa Clara County real … Read More

Senator Scott Wiener Talks SB50

sebfreyHousing, Live Events

California State Senator Scott Wiener visited Santa Cruz on April 5, 2019 to give a talk about Senate Bill 50 (SB50). SB50 seeks to increase the amount of new housing construction in California by up-zoning residential property located near mass transit or “job-rich” areas. This law would override local planning and zoning ordinances, which have worked to keep density low in most areas of the state. We have recorded Senator Wiener’s remarks and transcribed them if you’d prefer to read them. See also: Vox article about SB50, Curbed LA article, Livable California on SB50 Senator Scott Wiener SB50 Presentation Video Senator Scott Wiener SB50 Presentation Transcription Good evening, and thank you for having me today. I really appreciate the invitation, it’s really great to be back in Santa Cruz. People sometimes say when they see me in different parts of the state, “Are you running for office statewide?” And the answer is no, absolutely not. I love representing San Francisco and San Mateo County, but I think it’s incredibly important when you’re, at a state level, making policy for the state, to be present and to talk to people in different parts of the state and to try to understand what’s going on around the state. We have a lot of commonality in California, a lot of common problems, but it’s just good to really talk to the community, so thank you for having me. I also just want to say thank you for sending two fantastic representatives to the legislature, in Bill Monning and Mark … Read More

Selling a Home in 2019 vs. 2020

sebfreyCommentary, Local, North Monterey County Real Estate, Santa Cruz Real Estate, Silicon Valley Real Estate

One of the most popular pages on my website in 2018 was an article where I addressed the perennial question, “Is it better to sell my home this year, or next?”  In that posting, I opined that the preponderance of evidence is that 2018 was shaping up to be a pretty good year for home sellers.  Today many sellers are wondering about selling a home in 2019 vs. 2020. In last year’s article, I said that given a choice, it would be better for homeowners to sell in 2018 rather than rolling the dice on 2019, as the economic forecast for 2019 was cloudy. Now that we’ve flipped the page into 2019, I can say it looks like the jury is in on this one:  2018 was the peak year for this real estate market cycle.  The question before us today is, I think:  will 2019 prove to be a good-but-not-great year for sellers – or will it be the year the market falls off a cliff, again? Why The Real Estate Market Has Gone Soft After much thought and analysis, it seems to me that the softening of appreciation in home prices is due to the market finally reaching the limit of affordability.  In Santa Cruz county, only 12% of households can “afford” a median-priced home (with a 20% down payment).  In Santa Clara county that number is 16%.  In Monterey county, it’s 19%. It looks like what we’re seeing today simply comes down to the fact that buyers simply can’t afford to pay more … Read More

2019 REALTOR Installation Speech

sebfreyBlog, Video

Thank you for braving yet another ferocious northern California rainstorm to be with us today at our 2019 Installation.  I’ve been fortunate to get to attend a couple other installations lately – in Monterey, and San Benito and they were great opportunities to get to meet and connect and re-connect with colleagues from our adjoining communities.  I’d like to thank all the brokers, agents, and staff who’ve traveled here from Santa Clara AOR, Silicon Valley AOR, MontereyAOR, and San Benito  AOR.  I hope that everyone here has had the opportunity to meet someone new and learn something about what’s going on in our adjoining marketplaces.  I’d also like to extend a very special thanks in particular to Jeanne Radsick, CAR president-Elect for 2019, who came all the way from Bakersfield to be with us today – thanks Jeanne! After a long, hard fought and divisive campaign to become your 2019 President, I think we all need to come together to fight the biggest threat to our industry. What’s that?  In a word, it’s apathy. And I’m not saying you all gathered here are apathetic – because today, you showed up.  And a lot of you show up for many of our meetings.  You are involved. And you not only show up for our meetings – you show up at county supervisor meetings, city council meetings, planning commission meetings, RTC meetings.  You write your representatives and urge your clients to do so as well.  You know that good things don’t just happen.  They happen because people who care … Read More