Inflation, Taxes Rising Real Estate Prices

 It has been a month of watching real estate prices move up in dramatic fashion and forecasters commenting on the top and or commenting it will continue to rise and go higher.  Interest rates are slowly rising and the cost of gas increasing at every fill.  My wife is constantly complaining after her Friday shopping at the cost of bread and milk. 

Real Estate does not have the full attention either!  Stock keep on hitting new highs with the same diverse commentary as real estate prices.  Berkshire Hathaway common stock has hit a price that the quotation service cannot record it any longer; unless the stock is split.  Warren says "no"!

The new administration's spending habit has gotten to a point that what has been spent has to be funded.  What has been heralded as  "Tax the Rich" has turned out to be a double edged sword for real estate, home owners and everyday real estate investors, called "Mom and Pop" enterprises.  The "American Families Plan", per Market Watch, will hit the middle-class home sellers who sell a home in an expensive market and have more than $1 million of Capital gains.  That should include all the Baby-Boomers who own property in Silicon Valley for the past 30-40 years.  The Capital Gain Tax Rate proposal is to move from 20% to 39.6%.  

The next slap at real estate is the elimination of the "step up" of cost when inherited.  This "step up" allows real estate to increase in original purchase value to the market value at death to the heir.  

As an example, my friend says he bought his home in the Farm Estate Estates area of Redwood City soon after he was married for $35,000.  Value today probably about $1.8 million.  My friend's children say "don't sell it Dad, we will inherit it without paying taxes. We can rent it out and pay no capital gain tax, have a step up in basis to shelter our rental income with depreciation."  So much for family tax planning under the proposed tax plan! 

Not only will the property be taxed at the difference between cost and market less exemptions at 39.6% the children will have to sell to pay taxes or pray Dad has enough in savings to pay the taxes.   

My friend's children will be disappointed.  They will inherit a house worth $1.8 million less $35000, less $500,000 exemption and let's say another $180000 if they sell for various expenses and be left with a federal tax of $380,000, not considering state taxes.  If they don't sell the $180,000 will be added to the total taxable gain....OUCH!!

I don't think my friend rich.  He is a retired auto mechanic.  No college education and worked hard to create his own auto repair shop, sell it and retire.

Think about the farmers.  I come from Wisconsin.  I had cousins who owned dairy farms they inherited from their parents and their parents from their parent and so on.  Once they die the tax man comes.  They barely make it, but keep it as a family tradition.  It is hard to see them as soak the rich.

The next slap, or kick them while they are down, will eliminate the "1031 exchange".

"1031" is a very old tax act that allows the seller of income property to sell and transfer the cost basis into a new property without creating a capital gain.  Yes, there are some rules that must be followed, a trustee, usually a title company, to hold the proceeds from the sale and distribute them for the purchase.

This is a proposal, nothing is firm. Congress needs to approve before it becomes law.

INFLATION! Well this is another "hot button".  Members of the Federal Reserve Board, the people to raise and lower interest rates, see inflation higher this year.  Treasury Secretary, Janet Yellen, saw inflation higher until she abruptly changed her mind after a public announcement of her thoughts.  UMMM, interesting, very interesting.

Steel has moved up 44%, sugar + 17.7%, lumber +20%, oil + 37.7%, copper 28.7% all look like inflation as prices have moved up.  Gasoline prices have moved up, water has increased, PGE bills have increased, milk is up, bread is up.  Looks like inflation to me.  I suggest you look at the calculations the FED uses for their inflation index.  Oil for one is not included.  In fact, there are a number of commodities not included.  Political deck stacking?

INTEREST RATES is another "hot button" because interest rates are used to stop inflation.  The Federal Reserve Chairman, Jerome Powell, says he sees inflation as not a threat and will not increase interest rates, using their proprietary formula as stated above.  While Mr. Powell will not raise the FED rates, the market rates on 10-year treasury bond have moved from less than 1% to a 1.75%high this year.  The market sees inflation with higher rates on bonds, and rising interest rates will affect everything from mortgages to credit cards.  Mortgage rates on jumbo loans in February were 2.87% today they are 3.25% with strict credit terms.  That indicates interest rates will rise because inflation is rising and the Federal Reserve will be forced to raise interest rates.  Rising rates will lead to the debt that the Government raises to pay for the $Trillions of budget increases.  The deficit to increase because the cost to borrow, interest rates, will rise and taxes to pay for the increase will increase.

MOVING OUT OF THE BAY AREA:  It has not changed for corporations leaving the Bay Area.  Here is a summary courtesy of SFGATE:

1. HPE, which had 5,992 employees in the Bay Area at the time of the announcement in 2020, isn't closing its San Jose campus, but will be moving its headquarters to Houston
2. Redwood City-based multinational tech company Oracle, with 18,121 employees in the Bay Area at time of the announcement, is also moving to Texas.
3. Although Uber has so far not officially made an announcement regarding its Mission Bay campus, the San Francisco Business Times reported that the ride-hailing company has "softly" marketed its lease on about 300,000 square feet of its more than 1 million-square-foot, four-building headquarters near Chase Center. Uber hasn't officially moved into the offices yet, making the As reported by the San Francisco Business Times, Airbnb listed 78,565 square feet of office space in SOMA on the market. The move comes on the heels of the announcement that Airbnb would be establishing a technology hub closer to the East Coast. The announcement says the company is looking for a city whose leaders will commit to "promote economic empowerment for its citizens" — perhaps a critique of the Bay Area's high cost of living — as well as other factors such as a "diverse technical talent pool" and an environment that people want to make their long-term homes for "hundreds of technical and non-technical roles over time."  news even more dramatic for its employees.
4. Digital Realty, a data center company with 1,500 employees worldwide, announced in January that they'll be moving to Austin, citing "central location, affordable cost of living, highly educated workforce and supportive business climate." The company already had about 20% of its workforce and 30 data centers in Texas, and at time of publication, have 97 employees on LinkedIn listed as working in San Francisco.
5. Although it's a stretch to say that Salesforce is relocating out of the Bay Area, one could say that its new headquarters is the cloud. The company announced in February that it would make its pandemic-related remote work policy permanent and has canceled a lease at a forthcoming downtown office in San Francisco. It has also subleased a portion of the offices at 350 Mission St., leaving Salesforce Tower as a divisive and underused monument.
6. Recommendation-based website Yelp, which was parodied in late 2020 with a SOMA billboard, has put most of its S.F. headquarters up for lease. Yelp told SFGATE the following regarding the decision: "We plan to continue to maintain our presence in the locations where we currently have offices, including our headquarters in San Francisco."
7. Another ubiquitous San Francisco tech company (and constant presence in the intro skyline on HBO's "Silicon Valley") has put its prominent SOMA headquarters up for lease. The 1355 Market St. offices listed 104,850 square feet up for lease following the announcement of a permanent work-from-home option for employees.
8. Design-minded social media site Pinterest has announced the cancellation of the construction of a high profile expansion of its San Francisco offices. Abandoning the 490,000-square-foot expansion was a costly decision for the company as the project had a $89.5 million termination fee.
9.  Sf.citi also lists several other prominent companies who've downsized their Bay Area locations, including Wish, Stripe, Paypal, Brex, Optimizely and Credit Karma. See their full list here.

16.3 million square feet of office space is vacant in San Francisco.  16.3 million square feet equals 10 Sales Force Towers.  63% of the Tech Companies in San Francisco have already downsized or plan on doing so.  The Silicon Valley Venture Capital deal count in 2021 is expected to fall to 20%, a first in history!

With the exodus goes jobs. Silicon Valley has some potential problems.   This is good reason I have more buyers looking out of the area to the Sacramento area.

Spring Season Starts with a Stumble

 This week has started with 5 transactions falling through, 4 listings back on the market, and 11 price cuts, 73 new listings, 9 contingent and 58 pending, with 57 sold.

"Going Back Home" is the swan call of the renters moving.  "Working from home and having every room rented to cover costs is not why we came to the Bay Area."  

Within the next several months we will witness the results of unpaid rent and unpaid mortgages.  I do not have much faith in a solution. The subsidy programs are already finding it difficult to pay landlords.  Landlords who have been unable to finance the deficits will need to consider their losses, eat them or sell!

eXp Realty is training agents for the possible oncoming foreclosure action and bank sale of REO, (real estate owned).  Becoming "certified" is a return to 2007-2011 when we had the last foreclosure boom.  Short sales and foreclosure sales were once the main source of buying properties from speculators to cost conscious buyers.  

In addition to the REO training, eXp is training agents in "Relocation".  After the Financial Crisis, Silicon Valley became a migration center for corporate employees.  I could count on 4 or more assignments in a year of executives moving to the Bay Area.  From the training program under way it has more of the semblance of movements out of the Bay Area.

Where is the main relocation? A new poll says Nevada.  Another poll has Hawaii, Virgina, Colorado and Nevada in the top 4 well above California.  I lived in Honolulu for 13 years and agree with the Top Location of Hawaii.   So is my wife thinking....are we too old to surf?Another poll has Hawaii, Virgina, Colorado and Nevada in the top 4 well above California

But what about moving within California?  The Top 20 for SFGATE in the US have Vallejo, Yuba City, Santa Cruz, Stockton and Eureka in the Top 20.  I can understand the demand.  The most expensive is Santa Cruz of $1,222,000 to Modesto of $499,000 with the others mentioned in the Modesto price range.

If you are looking for something within the state and close to the Bay, look at El Dorado Hills, Loomis and Granite Bay.  I just closed on a  6 bedroom, 5 bath recent construction home on 2.5 acres in Loomis for a little over $2 million.  2 to 2.5 hours from Menlo Park keeps the tether rope not too long.  Then it is a 2-3 hour drive to Tahoe.  The best of all worlds with the Folsom Conservation area for water sports and hiking...horse back riding is a definite YES!  The small town feel is so refreshing!  Take ride and tour the area.  Then call me, my team has just added an agent to represent my clients in the area.

April Review of Real Estate Market

There seems to be an over abundance of real estate news from hot markets to cold markets to falling rents and pre-foreclosure risks.  Rather than using the Media reports. I have decided to go to the source.  The Multiple Listing Service has reports for every week and month going back in time.  The MLS has reports that give a view of the markets by price range and an analysis of what buyers and sellers are most interested in.  So let's go forward

The "Five Counties New vs Sold" is the first stop on our travel through the real estate marketplace. From March 2020 to March 2021 there were 26,974 "new listing" and 21,891 "sales".  On average it took 22 days to sell.  The average price was $1,022,661.  The total sales for the "Five County Area" was $22,375,718,789.  That was up from $16,239,021,898.

In San Mateo County the Days on the Market (DOM) for March were 18  The price to list was 107%. The average sales price for San Mateo County was $2,311,630 versus $2,294,675 in February.  The total sales for March was $973,196,236.  That was up from February of $658,571,772.

In Santa Clara County the DOM was 16 with sales to list of 108.8%.  The average Sales price was $1,909,259 versus $1,802,292 in February.  The total Sales Volume was $1,853,890,494.  That was up from February of $1,081,383,326.

In San Francisco County the DOM was 23 and the Sale to List price was 112.3%.  The average Sales Price for March was $2,240,548 versus February of $2,258,735.  Total Sales for MArch 2021 was $584,782,967.

In Alameda County the DOM was 13 and Sales to List Price was 113.7%.  The Average Sales Price was $1,253,350 versus February of $1,197,1129.  The Total Sales Volume for March was $1,227,029,432 up from February of $764,965,508.

#5,  Contra Costa County had DOM of 14 and Sales to List Price of 108.5%.  The Average Sales Price for March was $1,145,240 versus February of $1,050,648.  The total Sales Volume for Contra Costa County was $1,172,726,253.

Clearly it was a Strong Month of March in the 5-County Bay Area; irrespective of, what the Media wrote!

Now let's look at the two counties that in state movement occured.  Placer County for Granite Bay and Loomis and El Dorado for El Dorado Hills.

Placer County DOM was 18 and Sales to List was 102.9%.  The Average Sales Price for Placer County was $690,420 versus $669,960 for February.  The Sales Volume for March was $364,736,339 versus $237,835,703.

 El Dorado county DOM was 21 and Sales to List Price was 102.5%.  The Average Price of a Home in El Dorado County was $712,672 versus $622,644 in February.  The total Sale Volume was $180,306,082 in March versus $120,170,304 in February.

The Bay Area real Estate Market is STRONG.  Prices are rising, Days on the Market are short and Price to List is over 100%.  The migration out of the Bay could be attributed to the counties mentioned by the Media as immigration cities.  They too have rising sales prices, short days on the market and sales to list of over 100%.

I am reminded of an old Wall Street saying...The Market Crawls a Wall of Worry. Buy high and sell higher.

Gary McKae

Covid Economy Falters Bay Area Luxury Home Sales Boom

While rents collapsed, rent went unpaid and landlords fought to keep above water an exodus evolved from the Bay Area; but within Silicon Valley, Luxury Homes escalated in numbers sold and in median prices.

Quite an aberration.  In San Mateo County the number of Luxury Home Sales went from 564 in 2020 to 679.  In Santa Clara the number of Luxury Homes sold went from 1465 in 2020 to 1498 in 2021.  

For 2021 Luxury Median Priced homes popped from $1.45 million to $2.90 million and Santa Clara from, $1.33 million to $2.66 million.

(Thank you Louis Hansen of the Mercury News)

The rush from San Francisco was  evident as Woodside, Portola Valley with their 1 acre minimum parcels provided space and safety. 

*News Break states that East Palo Alto is among the Cities where home values are falling the most.  Between January 2020 to January 2021 the typical American Single Family home appreciated by 9.1%.  In East Palo Alto it declined 2.6% with a change in population, only to be beat by San Francisco down 3%.   Both cities represent the Worker Bees of Silicon Valley.  San Francisco with the diverse Silicon Valley market and East Palo Alto the proximity to the Facebook Campus.  With Facebook bringing back only 10% of their work force and the Facebook decision to work mobility the need to live near campus is diminished.  East Palo Alto is not a Luxury Home Market, just an average first-time home buyer market with the Facebook campus nearby.

No place is easier to leave than Silicon Valley.  7 out of 10 workers were born out of state.  It is estimated that 13% of the workers in Silicon Valley are mobile, rent and have no children or spouse.  San Jose has 46% of the mobile market, the epicenter of Silicon Valley.  The average income of the mobile worker is $118,000 and the average salary to the non-mobile worker is $48,000!  Who is going to move?  It is obvious.

Why then the strong Luxury Market?  Start ups being brought public and purchased.  The creation of the fund or investment tool know as a SPAC, special purpose acquisition company, has created newly found wealth to all the risk takers willing to work for a start up for low income and stock.  The large cash distributions and distribution of restricted stock with substantial jumps in income have put the Luxury Market as a clear target.  

7 out of 10 are not from California so therefor 3 of 10 are!  Those 3 will look to stay close to home and seek a town that represents a step up form the rental they were once crowed into.  Some move out of the Bay Area, but within a few hours drive to network with new startup opportunities and or go to the new employer's meetings when called.

This 3 of 10 do not want a fixer upper, needs work or dated home and property.  In comes a newer breed of investors.  Flippers moved over as the new set were contractors and real estate agents who were able to buy the dated properties, tear them down and build a new current and up to date home in Woodside, Palo Alto and Menlo Park and Farm Hill and Emerald Hills in the Redwood City area.  What once was a $1.4 million fixer becomes a $4.5 million Luxury Property.

What will be the demand this Spring?  Location, Location, Location may be the Realtor's slogan, but this spring the buyers are interested in Space, Space, Space.  All adding to gyms, home offices, dining rooms, sun rooms, sauna's, wine cellars, steam showers; even garages for the collection of new and classic cars; maybe, even an elevator to get groceries and parents to the upper floors.

To counter the growth on value we have seen is the States plan to create a wealth tax.  See the linked exclusive from McKae Properties. Link

Rising Interest Rates and Rising Stock Market Do Not Compute!

 Do we need a "wake up call"?  Since the beginning of the year to present, interest rates on 10-year US Government Bonds have risen 3/4%, give or take a few basis points or so (100 basis point equal 1 % point). 

 SO WHAT? Well the current yield of the 10-year T-bond is the rate mortgages are based upon.  Rising rates also are one of the measurements that banks and mortgage lenders use to determine their willingness to make loans either for their portfolio or to sell in the open market.  Once mortgage originators find an unwillingness to buy mortgages, interest rates must rise to make the buyers willing to take on the potential of higher rates.  The Federal Reserve has been the buyer of last resort that has kept interest rates down.  The FED has failed to stop the dramatic rise in rates. The FED has not accelerated its buying of mortgages in the after market.  Pension funds and investment companies who are the normal sources of buyers of mortgages have been reluctant to buy mortgages.  This is especially the case in Jumbo Mortgages a dominant type of mortgages in the Bay Area.  

In the past 30 days, home buyers have been frustrated with Pre-qualification letters and stated rates changing.  Buyers are being forced to look at lower lending limits and higher interest rates.  This  has had the effect of forcing the buyers to either raise their cash deposit or down size their buying appetite in a new home, or lowering the offering price on their new home under loan contingency clauses in purchase offers.

Lower offering prices translate into lower prices for future listings.  That seems to be a non event in our area.

Why?  Thank the Initial Public Offer Market and the creation of SPAC, Special Purpose Acquisition Companies.  The SPAC can buy private companies eliminating the IPO and creating a new set of mega wealthy employees.  As with the IPO's the new wealth has been translated into greater wealth in the after market shares have taken prices to levels that the new companies out price the market value of companies that are seasoned and related to the same industry of the new company.

The rush into going public has made many Techies rich.  There has never been a case that the new wealth has not stopped the desire for a "Trophy Home".  That desire has created a new source of buyers.  Contractors and real estate agents today have gotten into the game of finding fixer-upper and dated homes in areas like Menlo Park, Palo Alto, Los Altos and related high end markets to knock them down and reoffer the new homes at $4-5 million where once a $1.7-2 million home once stood.  

This time, the newly wealthy techie is not going on a buying splurge to the degree their predecessors did.  They have adapted. 

Suburban homes and schooling have become their goals for their newly found wealth.  Mobile workforces have given a new living destination and living standards.

CANARY IN THE COAL MINE:  during the time of the industrial revolution when the United States and Europe where in the throes of expansion and growth, coal was the source of energy.  Coal mines were below ground, generally, and light was generated by kerosene lamps, or a related power source.  As they dug deeper the gases underground were both toxic and flammable, but initially undetectable to the human nose.  The danger was the gases were unnoticed until it was too late and death and an explosion occurred.  To solve the potential danger a canary was placed in a cage.  The "Early Warning System" of the mid 19th Century and forward.  When the Canary Died Get Out!!

Today's Canary in the Coal mine is rising interest rates and rising equity prices, which include home prices.  Homes are the unique item.  Home are like stock markets in rotation  Recently the major change in equities have been from growth stocks and tech stocks to basic industries.  A big shift will occur on Monday March 15 when index fund changes are forecasted to remove growth and replace them with basic industries.  So too is the shift from tightly congested cities and urban areas to small town and suburban communities where homes are larger, lots are larger communities safer and schools are better and the homes are cheaper.  The rising interest rates which will put a damper on buying the Menlo Park, Atherton. Los Altos or Palo Alto home will find buyers moving to El Dorado Hills, Loomis, Granite Bay and other Greater Sacramento area communities that are substantially lower priced with greater sized homes and lots with equal or better schools.  

The rising rates have been created by the perception that the end of the Pandemic and the the return us back to normal, pre pandemic times.  

The ability to work from home has changed the needs and desires of families. 

Rising rates have also affected by the government funding of multi trillion dollar budget items to help Americans cope and get out of the Pandemic fed economic crisis.  The budget from this funding comes from US Government Bond sales.  More bonds sold, higher interest rates.  Higher interest rates mean inflation, all which add to an affordability issue in homes.  Affordability that has only become more stressful and has been in existence for decades in the Bay Area.

Taxes will fund the spending and repay the extra debt load.  Whether it is property taxes, income taxes or sales taxes, the movement of populations made more flexible with a mobile workforce will accelerate the socio-economic movement of populations.  This will especially be the case in the Bay Area.

There was once a saying of "Go West Young Man", will now be "Go East Bay Area Resident".  Now the question is, who will go east?  The renters will go.  Looking at the weekend real estate section of the San Jose Mercury News there is a section where all California Counties are measured in population size, education, income and renters versus owners.  San Mateo and Santa Clara Counties are pretty equal in renters versus owners . Some 48% rent to 52% own.  A renter can buy in Loomis California a 5-6 bedroom 7000 SF house on 3 or so acres, swimming pool and solar system for $2,200,000.  The monthly payment is $7,660 with a 30 year 3.25% loan no points, 20% down.  Just about the same rent as a substantially smaller home and lot size of a 4 bedroom Menlo Park home.

2020 MADE HISTORY IN MORE WAYS THAN ONE!

 2020 was indisputably a year for the real estate history books!  The onset of the global pandemic in a year of stops and starts.  It led to a shift in how we conduct our personal and professional lives.  The navigation through the pandemic witnessed a social and cultural movement that restructured societies, how we conduct business, adjusted to online learning and experienced a shift from large urban centers to rural small communities.

The housing market went from cold to hot as the average price of existing home rose on a U.S. average.  It was not necessarily the once hot cities and urban hot spots that dominated.  The resiliency of the real estate industry was one of the biggest surprises of the year.  The large scale shift to working from home created a shift from homes close to work to locations that did not require commuting.  Families sought out more spacious properties to achieve a better work-life balance.  

The home migration created a hot market outside of the once hot urban cities and towns that were once in proximity to work and transportation.  

eXp Realty is a good example.  I now get up every morning go to the Elks Club at 7 AM and work out on weights one day and bike on the other.  I am home to have coffee, check my emails and texts, attend conference calls to eXp World, our private web service, read the newspaper all without changing from my workout outfit.  Sometimes I work on offers, contact sellers and buyers while I review the paper and my popular news websites.  Oh yes, how is EXPI doing? Up again!  It pays to be a shareholder in the broker I have my license with. 

Then it is into the shower, shave, brush my teeth take my meds and back to the desk.  Of course once I pass the 1 pm timeline a quick bowl of yogurt and coffee. eXp has offered so much to adapt to the new way of living and working with their private website and service.  A Zoom call from our regional people to give the current update on our current market.  A great time to get an overview of where people are moving to and get an insight to helping buyers looking for affordability and the new life style.

As an example the knowledge of the movement of buyers out of the Bay Area is not a new issue that the media has discovered.  It has been going on since the pandemic started in January 2020 when the first Tech company said "work from home"!  Whether it is the conservative leaving liberal Facebook, or the founders of Silicon Valley moving their headquarters from Redwood City, Palo Alto or elsewhere in the Bay Area.  With the regional movement rents are plummeting and the crisis could get worse say Gabrielle Cannon of Yahoo News.

Texas and Mississippi lift ALL their COVID restrictions: Both states to end their mask mandates and allow businesses to fully reopen

With this happening how will the markets adjust?  Will California ever get off the restrictions as other states reopen, or will this just accelerate the movement to an open society out of California.

Talking about an Open Society, I have been showing properties in Granite Bay and Loomis to Bay Area Buyers.  The gyms have opened and have been open while we have been shut down.  

Here are some of the opportunities in Loomis and Granite Bay, just 2 hours away.

GRANITE BAY:

9049 STOCKHORSE LANE

"Majestic Estate in the heart of Granite Bay inside it's own private gate on 2.4 Acres. This Entertainer's dream is over 6,500 Sq.Ft that includes the house and the guest house. It has 5 car garages/ 2 RV parking garages 32' wide by 50' deep, two Boat parking garages. The main house is 5,302 Sq.Ft that has at the main floor a remodeled master suite, 3 Kids Bedrooms and In-law suite that has a family room and a separate Kitchen. on the second floor entertainment room with pool table and movie theater. The Gourmet kitchen is on the main floor and it has top of the line appliances. So many features in this house including sunroom, Wine cellar, Pool, Spa, outdoor kitchen/bbq with large bar seating, Basketball court, Soccer field, Kids Playground and owned 20KW Solar System. The separate guest house is 1,200 Sq.Ft of living space with 2 offices,bedroom, full bathroom, family room with bar and GYM. No HOA.walking distance to Award winning Granite Bay school. 5 minutes drive to the lake." SOLD $2,595,000

5900 OAK CREEK PLACE

"Luxury and Serenity describes this one of a kind Mediterranean style villa on 3.5 ac in the heart of Granite Bay. Features 7,463 sqft, 6 bdrm-suites, 8 bth, a Chef's kitchen with cathedral ceilings, big prep-island, breakfast nook, premium appliances. Most rooms with large windows, high ceilings, and Tuscan-milled wood finishes. Hallways have arched ceilings and doorways. Private office with wall credenza, barrel ceiling. Underground wine cellar with arched ceiling. All bdrm windows with a unique view of gardens and lush grounds. The pool has a spa, outdoor kitchen, and fireplace. Four car garage with wall storage and outside parking. Landscaping with a tranquil flow, moving water, pretty flowers, imported trees, and secluded areas to step away. The large grass area is perfect for family gatherings or as a horse pasture. Upscale, Exceptional, Private. Folsom Lake and Granite Bay Golf Club close by. Adjacent 2.4-acre property may be sold. Call for details. Some images virtually staged." SOLD $2,525,000 6005 VIA ALICANTE "Welcome to the palace, the crown jewel of granite bay.Located behind it's own private gate inside prestigious Los Lagos Gated community, Over 9000 Sq.Ft Estate with Custom touches throughout the house, natural stones, cathedral ceilings, crystal chandeliers, formal living , formal dining room, high ceiling, spacious great room with wet bar, gourmet chef kitchen, top of the line appliances and large island and luxurious custom paint and blinds throughout the house. 6 bedroom 8 baths including 2 master suites, secondary in-law kitchen with top of the line appliances and custom granite counter tops and separate secondary family room downstairs. Entertainers dream backyard with multiple sitting areas, Pool & spa two built in BBQ, outside kitchen, pizza oven, firepit, playground, and so much more. Enjoy Los Lagos tennis courts and walking trails to Folsom lake from inside gated Los Lagos." SOLD $2,500,000

LOOMIS:

6265 INDIAN SPRINGS ROAD

"Paradise awaits outside this fabulous estate on over 9.5 acres in a great central Loomis location. This resort like property includes a pool with waterfall, large covered outdoor kitchen and fireplace, over 2000sf custom putting green with sand traps, basketball court, sand play ground and in-ground trampoline. Multiple year round ponds with a large stocked fishing pond and dock. Vineyard including Cabernet and Merlot vines. Large shop with pull through RV storage and hookups. The main floor of this almost 6000sf home lives like a single story, featuring 5 bedrooms, 4 baths, sauna, exercise room/home office. The lower level of the home has a large bonus room with separate in-law quarters with its own private entrance. This stunning estate is an entertainers dream. Established short term rental with great cash flow. Contact agent for profit spreadsheet."  SOLD $2,185,000

4233 FAIRWAY VIEW DRIVE

"If you're looking for a large custom home on acreage in a private gated community without a

 $2M+ price tag; HERE IT IS! Nestled inside a small gated community, this 5 bedroom, 4.5 bath, nearly 6,000 sq. ft. home is loaded with amenities of the finest custom homes but priced significantly below them. Huge gourmet kitchen with furniture style cabinets, high-end appliances & tons of counter space. Home office has a built-in 300 gallon saltwater aquarium. Game room with wet bar, mini fridge & d/w drawer. Home theatre with seating for 7. Downstairs bed & bath. Heated pool & spa with waterfall, koi pond, fire pit. 2,100 sq. ft. finished garage can hold up to 7 cars. Add some lifts and store up to 6 more. The 6+ acre lot with year round creek allows plenty of room for your animals, an additional garage or even in-law quarters. All of this in the rural community of Loomis with its renowned schools of H. Clarke Powers and Del Oro HS, yet minutes to shopping, restaurants & theatre." SOLD $1,700,000

AND FOR THOSE LOOKING FOR WOODSIDE AT ONE TENTH THE PRICE!

4264 LAIRD ROAD

"Amazing home in the heart of Loomis! Enjoy country living yet still have the conveniences of being close to town. This property boasts 4.7 useable acres, 25x40 metal shed/shop, pond, white country fencing, and priceless views!! The home offers 4 bedrooms, 2.5 bathrooms! Formal living and dining with separate family room make this floorplan perfect for all buyers! Open kitchen offers abundant storage, granite counters, and an eat in breakfast nook. Master suite upstairs with dual closets and walk in shower. Fantastic outdoor living with mature landscape, spacious pastures perfect for animals, and plenty of space for a garden! This property provides endless opportunity! Located in the very desirable Loomis Unified School District! Truly the perfect place to call home!!"  SOLD $880,000!  NO NOT $ 8 MILLION!

On my recent Zoom area meeting I heard agents complain that they are being out bid by Bay Area Buyers and the market there is up 11% for 2020. Listed $650,000..sold $690,000 cash!  Geez, that is +30 years ago in the Bay Area.

PICK UP THE PHONE AND GIVE ME A CALL AND WE CAN MAKE A TOUR!  650-743-7249,    gary@mckaeproperties.com

Leaving the Bay Area

There is and has been a constant movement of residents from the Bay Area.  Few have realised that the movement has not been predominantly out of state.  The movement has been to areas in California that provide Affordability, Good Schools, Lower Cost of Living and larger and less expensive homes.

Rents have collapsed at spectacular rates, with San Francisco leading the race down.  To those who have rented solely for the night life and commuting to work it has ended with COVID 19.  The cramped conditions of apartments with no night life has taken the glamour out of "nightlife".  

The one and two bedroom starter homes too have become an upgraded solitary confinement quarters; irrespective of, the ability to walk around a 6000 square feet lot occupied by a 1350 square foot home with attached garage.

When those who decide to look for a larger home in a community with safety and good schools they are faced with:

A recently sold West Menlo, "elegant and artistic...modern mission inspired home"  5-bedrooms, 3 1/2 bath 3,647 square foot home on a 12,217 square foot lot. Sold $4,390,000

The simple solution is to look east and find affordability, workability 2 hours from the Bay Area.

Loomis California some 2 hours and 10 minutes away, "Stunning Saint Francis Estate with 4 Bedrooms, 3 full Bathrooms spanning over 3,000 square feet with designer hardwood floors, custom imperfect texturing, and large windows welcoming plenty of natural light. The custom kitchen great room concept features sleek black granite counters, subway tile backsplash, custom cabinets, stainless Kitchen Aid appliances, gas cooktop, built in fridge, double oven, and walk in pantry. There is a breakfast nook and bar, family room with custom built-ins, wine fridge, and cozy fireplace. The home also features a formal dining room and living room perfect for dinner parties and entertaining. All the bedrooms offer great space especially the master on-suite with fireplace and large bath with a soaking tub, large shower enclosure, quartz counters, and refinished cabinets. The 1.2 acre lot features a built-in pool, fire fixtures, fire pit, jacuzzi, and outdoor cabana kitchen." (per MLS) SOLD $1,340,000!

Then there is Granite Bay just a few miles west of Loomis there was a recently sold +Luxury and Serenity describes this one of a kind Mediterranean style villa on 3.5 ac in the heart of Granite Bay. Features 7,463 sqft, 6 bdrm-suites, 8 bth, a Chef's kitchen with cathedral ceilings, big prep-island, breakfast nook, premium appliances. Most rooms with large windows, high ceilings, and Tuscan-milled wood finishes. Hallways have arched ceilings and doorways. Private office with wall credenza, barrel ceiling. Underground wine cellar with arched ceiling. All bdrm windows with a unique view of gardens and lush grounds. The pool has a spa, outdoor kitchen, and fireplace. Four car garage with wall storage and outside parking. Landscaping with a tranquil flow, moving water, pretty flowers, imported trees, and secluded areas to step away. The large grass area is perfect for family gatherings or as a horse pasture. Upscale, Exceptional, Private. Folsom Lake and Granite Bay Golf Club close by." (Per MLS)  Sold for $2,525,000!

CALL OR TEXT 650-743-7249, OR EMAIL GARY.MCKAE@EXPREALTY FOR ACTIVE LISTINGS.