Going Going Gone...Sold!!

 As we have moved through the shut down, movement out of the state and cities single family homes have remained in a "seller's market".  It did not matter if prices were cut homes sold quickly indicating a seller's market.  That condition did not only exist in Silicon Valley it existed throughout the United States.

As we progressed through the summer, "The Zillow Market Reports" had low to negative forecasted market values.  Those reports were focused on zip code areas.  The zip codes price values indicated the future price movement based upon current sales.

Those prices values are now seeing price increases over the former forecasts.

1. 94061 one year forecast +3.5%, 2. 94061 + 3.2%, 3. 94020 +6.0% (fires be damned: price and quality of life are the winners), 4. 94062 +2.9%, 5. 94027 + 1.7%, 6. 95125  +2.1%

As a result here are the sales in San Mateo and Santa Clara County as of September 26th. RESULTS.

Sine the beginning of the year home prices in California have rise 34%.  VIEW

It is my belief we will continue to see demand for residential single family homes continuing.  Low interest rates into 2023 will continue to support low mortgage rates.  Affordability to new home will continue to support the demand for homes

 REFERRAL OF THE MONTH

I would strongly recommend Mr McKae for your estate realtor. Gary McKae not only has experience but also nice ,patient and providing good guidance. Everyone can sell your house but find someone good and fit for the jobs as personality and experience you can count on Mr Gary McKae as your estate realtor. GIAO PHI NGUYEN.

SINCE LISTING ON EXP REALTY OF CALIFORNIA IN MID JUNE 24 INTERESTED BUYERS, MULTIPLE COUNTER OFFERS AND SOLD IN LESS THAN 30 DAYS!

Bring me you listing eXp Realty is growing dramatically of 35,000 strong.  An icloud realtor that is the new "Amazon? of real estate brokerage firms

Interest agent go to: garymckae.exprealty.careers

LUXURY REAL ESTATE MAREKT AND CENSUS REPORT ON INCOME

 I have watched with amazement on how vibrant the real estate market has been in the Luxury level.  (That level being everything over $1 million.)  So when the recent issue of the September 2020 Luxury Market Report came across my desk from the Institute for Luxury Home Marketing I took it up with abandon!   In hopes that I could get some idea of why and where we are going in the Luxury Real Estate Market for myself and my clients.  As you click on the hyper link previously you will note that the entire United State has a commonality of performance, Sales price less than List price but short days on the market.  The Days on the Market indicating a "Seller's Market"!  Irrespective on a sale less than the list buyers were active to jump on price cuts to obtain the house they desired.  The first part of the Report will explain the difference between "buyer's market", "seller's market" and "balanced market".  Then comes the premise of the report,

 "One year later, and not only have we seen a major swing in demand for these larger properties (luxury homes over $1 million), but also a significant change in the preferences and lifestyle requirements of the affluent.  Covid-19 has had a major impact on everyone's lives, not just from restrictions in the way we travel, socialize and work, to where and the types of homes in which we live"

This is the Millennial Shift!  Large properties, mega mansions, private estates and luxury ranches have declined.  The demand shift was not a price shift.  It was a shift from lifestyle, inclusive communities, concierge services, wellness facilities, housekeeping and SPA facilities, and walking and proximity to nightlife.  Covid-19 has had an impact on not only our lives and potential health risks, but from restrictions in the way we travel, socialize and work, to the type of homes in which we live.

The shift is to indoor and outdoor spaces, home offices, and private wellness amenities; such as, homes with gyms, swimming pools, yoga studios and recreation rooms.

The market does indicate one most important item, the millennials are PRICE CONSCIOUS!  it also indicates that patience is in vogue and with most real estate sources the entire US is only looking at a slight increase in value.  It is the shift in market place that will see the largest increase while the previously dominant areas wl witness sight price cuts.

What you should find interesting is that the new listings versus sold has the same affect all over the US from Menlo Park to Park City Utah.  More listings, less sold with minimal days on the market.

This Report should give to those who get my newsletter food for thought.

Now the most interesting addition to this letter is a Census Bureau Report Tuesday September 15th that median income in 2019 grew a whopping 6.8%! The lock downs will erase some of these gains temporarily.  It is noteworthy in that the increase in lower-income workers and minorities benefited from faster growth and a tighter labor market before the pandemic.  This allowed many, or some, to buy their first home and to those that sold trigger a domino effect to buy a bigger better home and the the seller of such a lead up the line as the dominoes fell.  From local real estate prices that meant our market prospered so that in 2019 the U.S. median income rose by $4,379 to $68,709.  In dollar amounts this is 50% more than the Obama years when our real estate market was relatively flat.  In 2019 we saw the increase in buyers replicate the increase in earnings. Incomes among Hispanics grew by 7.1%, Blacks 7.9%, Asians 10.6%, Foreign Born workers 8.5% versus the Whites at 5.7%.  Our buyers reflected that change from Redwood City to Palo Alto to Los Altos.  Buyers were diversited by race and culture.  To the Foreign Born recently arrived whose predecessor saw a 8.5% increase, the newly arrived saw a substantial increase from his foreign experience that allowed the buyer to step up in price and location.

America grows irrespective of political party, president or media choice.  We grow because America is opportunity.  As the Stock Market came back from the March low to new highs so will we see our real estate prosper.  Be ready for change.  Look at more construction as the older homes are torn down and the newer homes will model the new choices of interior amenities.  

While I loved to watch the Packers' & 49'ers in a local bar or celebrate St Pattys with friends, those days are gone.  The 3 bedroom 2 bath house of the 50's is out.  Look for the future and ways to choose your next home.

I hope you enjoy the Luxury Report as much as I did.

Gary

Happy Labor Day

I needed a break to review our present situation and look at the various forecasts for real estate values.  The markets I follow indicate to me acceptance of buyers at levels below what has been posted.  The cuts represent the buyers reluctance to accept the idea that prices are going higher.  The buyers do want homes in areas that require move in condition and conditions that they are looking for based upon today's buyer's attitudes.

The comments below are those from 2 weeks ago when I decided to stoop and re-evaluate.

After the remarks I will post my closing comments based upon my research.

TWO WEEKS AGO:

 With the movement out of San Francisco and New York City and if we are to believe the media, out of big cities.  Where are they going?

Redfin has a great site for those of you who like to do some research in price and market analysis redfin.com/blog/data-center.

In the San Jose Silicon Valley market center 77.8% of the searches are within the Bay Area.  22.2% elsewhere with the leader Seattle with 6.75 of searches and Portland with 4.3%, Texas a close 3rd of the searches the remainder are in lower % numbers.

That tells a most important point.  With all the complaints on home prices, the Bay Area is still the place to be.

That takes it to price, we have the weather, we have the quality of life, we have home styles that suit the new buyer and all those looking to move out of rentals to a new home.  Let's ignore the fires, smoke and pandemic as a passing event.  To business we have a highly educated population and investment funds willing to back startup and transitions to new markets into a new Silicon Valley economy.  The ability to transform is the key asset of Silicon Valley.

Cuts in home prices I regularly put on Linkedin, Twitter and Facebook.  They tell a story of 10% price cuts in communities that were once immune.  Los Altos, Palo Alto, Menlo Park. (Get yourself on my Facebook Page, McKae Properties, or Linkedin & Twitter as gmckae to get my selections)

Now it will become a period of buyer and seller battles.  

The Covid 19 restrictions keep buyers off the market, on the virtual tours.  When it comes to muli-million properties and first time buyers, they really want to know the property.  

With all that, inventory must decline, and prices decline to a level that inventory is eliminated and prices move back up.  But it is not!

As I review the cities within our area there are some notable instances.  For example Palo Alto a formerly insensitive city to price declines did a head dive in January from just over $3.2 million to under $2.6 million.  

UPDATED REMARKS:

Zillow's calculations are beginning to show an estimated increase in home values for 2021.  Redwood City in the 94061 zip code is estimated to see home prices increase 1.3%, in Woodside and parts of Redwood City in the Farm Hill and Emerald Hills area with a 94062 zip code there is an expected 2.3% increase in 2021.  On the Coast in Aptos area there is an expected 3.1% increase for 2021.  Palo Alto in the 94301  zip code a 2.7% increase is expected for 2021.

The latest issue of Realtor.com magazine notes that home prices are increasing on a national level but notes the increases are in the nation's hottest zip codes.  Sorry to tell you the Bay Area is not in the list.  This further confirms to me that the movement out of the area in Redfin of 22.2% is most likely being seen in Realtor.com searches and Zillow searches.  

I have had several buyers who were formerly or are now renters looking outside the area.  It was interesting to see where they wanted to move.  (They all have the ability to work from home)  The Big Island in Hawaii was one choice and another was Reno and surrounding area.  I put those areas in my watch list and discovered some interesting patterns.  The Big Island has seen a number of price cuts.  Most notably in property over $1 million. ( By the way, you can get some unbelievable homes on the water for over $1 million in Kona.)  The price cuts were from the County of Hawaii, the Big Island, decision to raise property taxes on all homes over $1 million.  This reason, my colleagues in the Kona area tell me, is aimed at the High End owners who come to the Big Island as vacation homes.  The other is aimed at the BNB homes that represent visitors not residents.  In Reno and surrounding area home prices are strong in the starter home area and will vary when viewing the gated communities with golf courses and or tennis and exercise clubs.  Lake Tahoe is strong and again my colleagues tell me there are a number of Bay Area buyers looking for homes in a rather limited market.  Let me say that does not included the multi-million homes on the lake and vicinity.

That puts buyers in a very good position in our area.  Prices are not going to run away.  20% of the former completion is looking elsewhere.  Sellers who believe their homes are worth more than the market will require a price cut to get them sold.  When that happens they sell. 

To me this is an even market place for buyers and sellers.  That also bodes well for the builders who can work on their calculations of cost and profitability without concerning on future price movement against them.

On virtual tours hers is what I recently read

Buyers are 49% more likely to write a contract on a listing with a 3D Virtual Tour

1 out of 2 properties with a virtual tour sell in less than 30 days REALTOR.com says listings with a virtual tour get 40% more clicks  75% off buyer prospects prefer listings with 3D tours Buyers spend 130% more time on an agent's website if they have recorded voiceover virtual tours

A good market makes me recommend buyers to act now and look for the 10% cut.  To sellers, don't let what you think what you believe your home is worth.   Or what higher price the realtors you interview with can get you.  Sellers don't let the realtor "buy" your listing with a high price.  Go with the realtor who is rational in their price for your house and can show you statistics of where the market is and where it will be in the future.   Of course, I hope that realtor is me!