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
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
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
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
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
Santa Cruz City Council Defies Voters
Information in this report was provided courtesy of the Santa Cruz County Association of REALTORS. On Tuesday, January 8th 2019 – a night which will live in infamy – the Santa Cruz City Council defied voters who recently rejected control and Just Cause Evictions when they soundly rejected Measure M by 61% to 39%. They did this by passing a first reading of an “emergency” just cause evictions ordinance. Councilman Brown made the motion, Krohn seconded, and Cummings and Glover voted yes. Watkins, Meyers, and Mathews voted No. The term of the draft Just Cause Eviction Ordinance was extended to one year. A few changes to the draft ordinance were made from the dais: If the owner lives on the same property, it is exempt from JCE. Good temporary news for those with ADUs or duplexes. Partner was legally defined as registered domestic partner. However renters can still move in other family members without owner permission, beyond the number on a lease, and up to the federal occupancy limit. The relocation ordinance passed a second reading with hardly any discussion at 11:50PM. Rent increases are limited to 5% in one year and 7% over two years. Higher increases, that cause renters to move, trigger relocation fees of two months actual rent. This passed unanimously. The Council states that this is not technically rent control and that it can therefore be applied to all rental property including single-family homes and condos (and so not be in violation of Costa Hawkins, the repeat of which was rejected statewide … Read More
Why It’s Better to Sell Your Home Early in 2019
If you’re thinking of selling your home in 2019, it’s something you’ll want to do sooner rather than later. Our market is almost a year-round market; things slow down for the holidays but they pick right up again half way through January. The market, though, has softened considerably. My advice to sellers is to have their homes ready for the market by mid-February to get a jump on the spring market. By listing early in the year, you’ll beat the competition to market and you’ll probably have a much easier time selling. Best Advice for Bay Area Sellers in 2019 Sellers should very, very carefully consider their list price before listing their home for sale on the MLS. Don’t be greedy – be realistic. Your home has probably appreciated substantially over the past several years – take the money and run. Price it where you know it will get offers within 2-3 weeks; any higher than that and you’ll probably end up shooting yourself in the foot. In a softening market, you don’t do yourself any favors by testing the market with a high price. Prepping your Home for the Market Remember, it’s always the basics that give you the biggest bang for the buck, and what’s great is that they cost relatively few bucks. Empty the house at (“de-clutter, de-personalize”) so it looks as spacious, light, and airy as possible. Paint everything, whether it needs it or not. Painting makes your home look fresh and clean, and gives it that “new home smell.” Clean everything, … Read More
California 2019 Real Estate Forecast
It’s that time of year, and high-profile prognosticators are breaking out their crystal balls to come up with their California 2019 real estate forecast. For the past couple of years or so, I’ve given you a blow-by-blow video of Leslie Appleton-Young’s California market forecast (Leslie is the Chief Economist of the California Association of REALTORS, aka C.A.R.). This year, though, I’m going to skip that and instead give you just C.A.R.’s forecast highlights, and a round-up of other California real estate forecasts for 2019 as well. But let’s start with C.A.R.’s 2019 California real estate forecast…you can get it right from the California Association of REALTORS web site, from their October 11th presentation to REALTOR members. Also, I do have a copy of Leslie’s slides from the presentation she made to the Santa Clara County Association of REALTORS on November 16th, 2018 – if you want to download the slide deck as a PDF, you can do so using this link. In a nutshell, here’s what Leslie and the folks at C.A.R. are predicting for the 2019 California real estate market: A combination of high home prices and eroding affordability is expected to cut into housing demand and contribute to a weaker housing market in 2019, and 2018 home sales will register lower for the first time in four years… In essence, the message from C.A.R. is that the California real estate market in 2019 can be characterized as changing “from great to good.” I’ll break out a few key predictions for you. California Association of REALTORS … Read More
The Endowment Effect in Real Estate
The endowment effect is a human tendency to value something more when we own it. Last year, economist Richard Thaler even won the Nobel Prize for his work regarding this behavior. But how does the endowment effect in real estate manifest itself? First, let’s give a simple example of how the endowment effect works. Let’s say a group of people is asked how much a coffee mug is worth. They may respond with something like “around $2.” However, if they’re asked how much each member’s own coffee mug is worth, they will almost invariably respond with a higher value, like perhaps $8. It’s a striking phenomenon, and it’s observable in primates as well as humans. Simply put, there’s a strong tendency for us to overvalue things we already own. It could be something simple like a coffee mug, but it also applies to our real estate. Homeowners often think their homes are worth more than they actually are. For a long time, I’d figured this was primarily because of a strong emotional attachment to the property. After all, it’s only natural: most homeowners have created lots of memories over many years in these homes, and so of course they value the property more highly than “the next guy.” Sociologists, however, explain that this works on a much deeper level than simple emotional attachment: fear, or specifically, fear of loss (and no, fear is not an emotion). That fear of loss drives us to overvalue things we own, and according to the Endowment Effect, this is the … Read More
The World’s Greatest Realtor 2018 Award Winner
Sebastian “Seb” Frey is the The World’s Greatest Realtor 2018 Award Winner! This prestigious award was granted to him by one of his clients upon the successful sale of their family home in San Jose, California. Closing gifts are common in the Santa Clara county real estate market, but it is unusual for a client to buy the agent a gift – usually, it’s the other way around. So why did this homeowner go through the trouble and expense of getting a custom made closing gift for their Realtor? The World’s Greatest Realtor Case Study Cathy grew up in a quiet, tidy neighborhood of San Jose. Homes in the neighborhood consisted of single level ranch homes built in the 1950’s – most were around 1150 square feet or so, and the typical lot size was about 6,000 square feet. Her parents were the second owner of the home. Mom had died over a decade ago, and dad had just recently died. The home was being lived in by her brother Steve, who was on title. A third sibling, another sister, was on title as well. Steve had been living in the home for most of his life – and had a lifetime’s worth of items stored in the house. Actually, he had several lifetimes worth of stuff stored there. To be honest, the home was packed. Many rooms had boxes and bags of items, stacked from floor to ceiling. There were storage sheds in the back yard – crammed full of junk. The garage was likewise completely … Read More