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Leaving California

The headline for this article is California Loses Hundreds of Thousands of Residents in 2020:

Link to Article

But it sounded far-fetched to me, so I checked the actual press release:

We didn’t lose ‘hundreds of thousands’, which would be at least 200,000 by definition.

We did add 156,600 net new babies – more people to inherit homes later!

The population of San Diego is what matters to us. Further down in the press release they said that the San Diego gain ‘depended mainly on natural increase as the source of population growth’. It means older people are leaving, and they are being replaced by the kids!

Link to CA Press Release

Strongest Housing Markets

We’ve had sellers move to five of these towns this year!

Housing markets are showing resilience against the pandemic, but some are thriving more than others and are expected to continue to perform strongly in the years ahead.

Coinciding with the National Association of REALTORS®’ virtual Real Estate Forecast Summit on Thursday, NAR released a list of the top metros expected to have the strongest housing markets over the next three to five years. Researchers factored in domestic migration, housing affordability for new residents, consistent job growth relative to the national average, population age structure, attractiveness for retirees, and home price appreciation.

The following 10 markets were identified by NAR (listed in alphabetical order):

  • Atlanta-Sandy Springs-Alpharetta, Ga.
  • Boise City, Idaho
  • Charleston-North Charleston, S.C.
  • Dallas-Fort Worth-Arlington, Texas
  • Des Moines-West Des Moines, Iowa
  • Indianapolis-Carmel-Anderson, Ind.
  • Madison, Wis.
  • Phoenix-Mesa-Chandler, Ariz.
  • Provo-Orem, Utah
  • Spokane-Spokane Valley, Wash.

These housing markets likely will carry momentum from 2020 into “2021 and beyond because of strong in-migration of new residents, faster local job market recoveries, and environments conducive to work-from-home arrangements and other factors,” says NAR Chief Economist Lawrence Yun. For example, movers from pricey coastal regions may be drawn to cheaper destinations as companies increase work-from-home policies and make commuting less of an issue.

The trend is already becoming apparent in markets like Phoenix and Dallas, which have attracted the largest number of movers from the West Coast, the report shows.

“Expect these 10 markets to perform strongly, with potential buyers finding conditions particularly favorable to purchase a home,” says NAR President Charlie Oppler. “Overall, residential real estate will continue to be an important driver of our nation’s economic recovery, and the activity in these markets will help lead the way.”

Buyer Demand to Continue

Two weeks from today, the year 2020 will come to an end.

We are heading into 2021 with a strong surge of buyer interest. In spite of the current active inventory being far less than it was in 2019, there are more than twice as many people looking at homes today.

It has to carry over to next year! Hopefully there will be something to buy.

Still Hot!

The house across the street and a couple of doors down from my pending listing in La Costa Oaks went on the market today.  I emailed the listing agent to tell her that we had 25 showings during the first weekend, and our sales price – which is higher than her list price. She appreciated the tip.

She got back to me later – she has TEN showings today!

Christmas is next week. I hope we get the day off!

https://www.compass.com/listing/7177-sitio-corazon-carlsbad-ca-92009/673459356473067393/

Frenzy or ?

Long-time broker Jeff Hyland promoting his new high-end search portal

While the Real Estate Frenzy of 2021 appears to be on its way, there are reasons why it could be muted, or not happen at all.  Here are a few:

Lack of Inventory: Our recent history of fewer homes for sale is likely to continue.  It’s not getting easier to move – and most will say it’s harder than ever to sell your home and buy another one around here (you need to leave town to really make it worth it). If would-be sellers get discouraged and decide to pack it in instead, the frenzy will get whipped up but not sustain without a continued flow of product. A real frenzy needs momentum, which will be more detectible if we have 10% to 20% more homes come on the market like I predict.

Rates Go Up: It’s unlikely the Fed will do much, if anything, for the next 1-2 years.  But al we need is for rates to get back up into the mid-3s and buyers are going to cool off quickly. They already don’t like these prices, and they will insist that any rise in rates should be accompanied by lower prices – and they will at least pause for days or weeks to see what happens.

List Prices Go Nuts: The most-likely deterrent to a frenzy will be the jubilant over-confidence of sellers who aren’t happy enough to have picked up ANOTHER 5% to 10% appreciation in 2020 – and insist on packing another big lick on top of that.

Cocky Agents: I had one on Sunday refuse to show her listing after two days on market – she already had enough offers.  I guess we need to understand that some agents can’t handle a full load, but it’s the surly attitude that comes with it that wears people out.  It is a confidence that prevails throughout the industry, and when buyers tire of it, will agents notice in time?  Doubtful.

Buyer Exhaustion: There will come a point where some buyers will give up.

Craziest Buyers Already Bought: Just because we had a frenzy in 2020, doesn’t mean it will continue. It’s always different players every year.

Vacations Resume: Those who value a great vacation probably skipped one this year, so they will make up for it this summer.

As the threat of Covid-19 diminishes, so do the reasons for moving: For those who were moving to improve their pandemic environment, will they still need to move once the pandemic goes away?

The potential 2021 home sellers would be smart to get a jump on it and sell in February or March, just in case the frenzy turns into a glut.  You might leave a couple of bucks on the table if the market around you evolves perfectly and nobody else lists their home for sale. But if a few neighbors try to get out right when you do, the competition could turn into a price war (it’s a fine line).

Get Good Help!

Culdesac Tempe

It makes sense to build communities in the desert and run them off solar. In the video, she says they want to build one for 100,000 people!

Phoenix, that featureless and ever-spreading tundra of concrete, has been called “the world’s least sustainable city.” It has been characterized as a “sprawling, suburbanite wasteland” and “a monument to man’s arrogance.” The Onion has darkly predicted that by 2050, “most of Earth’s landmass” will be swallowed by the encroaching Phoenix exurbs. The Walk Score index ranks the place as the second-worst big city in America for pedestrians, and traversing it has been described as “a slog through a desert, plus the occasional McDonald’s.”

The Phoenix metropolitan area is, in other words, the last place you would expect a real estate developer to spend $170 million creating what it calls the first-ever car-free neighborhood built from scratch in the United States.

The development, Culdesac Tempe, is a 17-acre lot just across the Salt River from Phoenix.

Currently a mess of dust and heavy equipment, the site will eventually feature 761 apartments, 16,000 square feet of retail, 1,000 residents — and exactly zero places for them to park. The people who live there will be contractually forbidden to park a car on site or on nearby streets, part of a deal the development company struck with the government to assuage fears of clogged parking in surrounding neighborhoods.

Culdesac Tempe is a proving ground for a start-up also called Culdesac, which was founded in San Francisco and moved to Tempe during the pandemic. Started in 2018 by two native Arizonans, the company announced the project last year to a mixture of curiosity and doubt. Urbanists cheered it as a bold and important step toward a future with fewer cars, while suburban developers said the concept could never work on a large scale.

https://www.nytimes.com/2020/10/31/business/culdesac-tempe-phoenix-sprawl.html

From their website:

We’re undergoing the first major shift in transportation since the interstate highway system. Private car ownership is giving ground to transportation that is on-demand, shared, and (on average) more environmentally friendly. That 1-mile trip to get ice cream is increasingly happening on shared bikes, electric scooters, or on foot. Lyft Shared and Uber Pool make daily trips more affordable. And there is a renewed interest in public transit investment, including the expansion of the light rail in Phoenix.

People have responded by making different personal choices. In 1983, 46% of 16-year-olds had licenses. Today, it’s just 24%.  Fewer cars, less roadway, far less parking. New possibilities for how we live.

https://culdesac.com/

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