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Why Sell Your Home Now

School is back in session and the holidays are right around the corner – it’s the time of year that potential home sellers start looking forward to the next selling season, instead of moving in September/October.

Are you thinking of waiting until 2022? Here are my reasons for selling now, instead of later:

1. The Shine Is Off The Frenzy.  Those who are pulling back on their enthusiasm:

JBREC – Two of three buyer categories are down slightly (above chart).

CoreLogic – they only predicted a gain of +9.1% in San Diego pricing over next 12 months, which is way less than the +23.7% since last July. Don’t be surprised if +9% becomes the new +3% of predictions – it’s a lot higher than the previous safe bets without being double-digit.

Zillow Offers – backtracking 5% on price commitments made 2-3 weeks ago.

Navy Fed – suspended the issuing of home-equity loans ‘temporarily’.

Refi appraisals – heard of several appraisals coming in low as market softness creeps into their minds.

2. Interest rates – They have nowhere to go but up, and it’s just a matter of when. Once they start, home buyers will want something in return from sellers.

3. Boomer liquidations – There probably won’t be a mass exodus, but all you need is 2-3 on your street.

4. Fewer Fix-Ups – The current inventory is so thin, sellers are getting away with murder now. If there was an index that measured how close sellers got to selling ‘as-is’, we’d be setting records today.

5. Safe – You know what you can get today, and let’s admit – it’s a lot higher than it used to be. Cashing out now instead of risking any of the above getting worse in 2022 is the safe bet. How much are you hoping to hold out for next year? Another 2% or 3%?

When is the best time to sell? When everyone else isn’t!

Prop 19 Setting Seniors Free

Prop 19 was sold by the California Association of Realtors as a solution to the low-inventory environment. The intent was to free up seniors over 55 to move anywhere within the state of California, and take their old property-tax basis with them.

The C.A.R. said it was all we needed to create more inventory!

While we don’t have any direct results yet, but with inventory about 10% behind last year’s covid-impacted count, and 21% behind the 2019 count of total listings between Jan 1 and July 30th, it’s safe to say that Prop 19 hasn’t had achieved its goal yet.

Or maybe I just need to do more!

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Do seniors just need more information on transferring their current property-tax basis?

If so, here’s your taxpayer advocate:

As Rob Dawg duly noted, seniors may need to stay in California so they can take their low property-tax basis with them to make it worth moving.

Where can you move within California? Here are some ideas:

Julian is close by, and you can get this 2,808sf one-story for $825,000:

https://www.zillow.com/homedetails/5009-Pine-Ridge-Ave-Julian-CA-92036/16757715_zpid/

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How about Idyllwild? It’s only a two-hour drive and you can buy a 2,713sf single-story for $579,000:

https://www.zillow.com/homedetails/53680-Toll-Gate-Rd-Idyllwild-CA-92549/18047261_zpid/

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How about Placerville? The elevation is only 1,867 ft. and population is around 12,000.

You can buy this 2,094sf single level for $650,000:

https://www.zillow.com/homedetails/1635-Pheasant-Run-Dr-Placerville-CA-95667/18591209_zpid/

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Ok, ok, you want to stay coastal. How about Cambria? Pick up this 1,875sf one-story for $875,000:

https://www.zillow.com/homedetails/3144-Wood-Dr-Cambria-CA-93428/15410632_zpid/

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We hope to build a referral network with agents in every town, and in the meantime, Donna is excellent at vetting realtors for you. Let us know where you want to move, and we’ll set you up with a top agent!

Retiree Tax-Free Moving Plan

Here’s a two-year moving plan for those long-timers who:

  1. Have substantial equity in their home, but
  2. Don’t want to pay any capital-gains tax, and
  3. Want to move out of town – but not sure where, exactly.

This is an adventurous experience, and good for those who are retired and want/need to travel around looking for a new home while seeing more of the world.

Step 1: Rent your house for a year.

Step 2: Go visit/live in your favorite towns. Spend a month in 12 towns, or four months in three towns, etc.  This will ensure that you get a good feel for these destinations before buying a home there.

Step 3: Sell your rental house here, and buy a home in your new favorite town via a 1031 exchange.

Your CPA will recommend renting the new home for a year too, so you’ll be a vagabond for 24 months or longer.  But you’ve wanted to do more traveling – here’s your chance before setting down for the duration!

To really hit the jackpot, go to an area that is cheap enough that you can buy two – one for a rental too.

Multi-Gen Demand

The new NAR report on the characteristics of homebuyers was released today.

Let’s note how many homes were bought to accommodate kids moving back home – or who never left.  Past generations never had to worry about kids moving out when everybody could afford a home.

As the prices go sky high, more kids will be faced with either having to move far away if they want/need to buy an affordable home, or live with their parents for the duration – yikes!

One more variable to add to the Reasons-To-Move theories, and help explain why demand is exploding!

Top Markets in 2021

Zillow Survey Predicts Austin will be the Nation’s Hottest Housing Market, Leading a Sunbelt Surge
More affordable metros are replacing expensive coastal areas as top drivers of home value growth
— A panel of economists and real estate experts expect Austin to outperform the national market by the largest margin, followed by Phoenix, Nashville, Tampa and Denver
— Expensive coastal markets New York, San Francisco and Los Angeles are most likely to underperform, though Zillow expects growth in every market
— Key tailwinds include an improved economic outlook underpinned by progress on coronavirus vaccines, while affordability and available supply are potential drags

SEATTLE, Jan. 19, 2021 /PRNewswire/ — Austin will be America’s hottest housing market in 2021, leading a list of mostly Sun Belt cities expected to continue heating up faster than the nation’s large coastal markets, according to a new Zillow® survey of experts.

The booming Texas destination heads a lineup of sunny and relatively affordable metro areas — PhoenixNashvilleTampa and Denver — that are most likely to outperform the nation in home value growth, according to a panel of economists and real estate experts recently surveyed by Zillow.

The Zillow Home Price Expectations Survey, sponsored by Zillow and conducted quarterly by Pulsenomics LLC, asks a large panel of economists, investment strategists and real estate experts for their predictions about the U.S. housing market. The Q4 survey also asked about their expectations for 2021 home value growth in 20 large markets compared to the nation.

An overwhelming 84% of those surveyed said Austin values would out-perform the national average, compared to just 9% who believe it would fare worse. Phoenix came in second with 69%, followed by Nashville (67%), Tampa (60%), and Denver (56%). Page views on Zillow for-sale listings in Austin by out-of-town searchers were up 87% in November compared to 2019. 

The top-five metros are all affordable options compared to expensive coastal areas that have led home appreciation ranks in recent years, providing relative value for Millennials looking to take advantage of low mortgage rates to buy their first home. The top five are also, for the most part, sunny locales. Four of the five counties holding the largest cities in these MSAs all rank in the top-third of counties in the contiguous U.S. for average daily sunlight, according to NASA data analysed in The Washington Post. Davidson County, home to Nashville, ranked just below the midline.

“The pandemic has not upended the housing market so much as accelerated trends we saw coming into 2020,” said Zillow senior economist Jeff Tucker. “These Sun Belt destinations are migration magnets thanks to relatively affordable, family-sized homes, booming economies and sunny weather. Record-low mortgage rates and the increased demand for living space, coupled with a surge of Millennials buying their first homes, will keep the pressure on home prices there for the foreseeable future.”

An improved economic outlook thanks to COVID-19 vaccine roll-outs and better treatments was pegged as the most likely tailwind for the housing market in 2021, followed by sustained strength in first-time home buying among Millennials. It proved a powerful demand driver in 2020 and is expected to persist for years to come.

Link to Zillow Article

‘End of Forbearance To Be A Non-Event’

Health, unemployment, stairs, taxes, finances, politics…….selling your home is becoming the answer for everything!

More than 2.5 million American homeowners have stopped paying their mortgages, taking advantage of penalty-free forbearance periods offered by lenders.

What happens when the free pass fades away next year?

Not much, and certainly nothing approaching the flood of foreclosures that defined the Great Recession, according to the emerging consensus among economists. While some homeowners are sure to feel the pain of forced sales, housing experts increasingly expect the end of forbearance to be a non-event for the gravity-defying housing market.

That’s largely because home prices have risen sharply during the coronavirus pandemic. As a result, homeowners who find themselves unable to pay their mortgages when their forbearance periods end likely will be able to sell for a profit, rather than going into foreclosure.

“If they have equity, they can always sell off the house and pay the mortgage,” says Ralph DeFranco, global chief economist at mortgage insurance company Arch Capital Services. “It’s not a great outcome, but it’s less terrible than letting the bank take it and sell it.”

Link to Article

Who Is Moving Where?

Ryan was nice enough to provide the latest data (2019) from the U.S. Census Bureau on where Californians are moving, and where our new residents are coming from – at least before the pandemic.

The big winners on a net basis:

More Californians moved there:

Texas:  +45,172

Arizona: +31,486

Nevada: +20,889

Oregon: +20,662

Washington: +14,909

Colorado: +14,265

Florida: +5,936

N. Carolina: +4,160

More People Moved Here

New York: +13,235

Illinois: +9,085

Virginia: +7,512

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Will Prop 19 Increase Inventory?

The U-T asked their twelve real estate experts about the effects of Prop 19:

Q: Will Prop. 19 substantially increase home inventory in California?

Of the local experts, 11 out of 12 said NO, and the justification for the one YES answer could have been just as easily been reasons to say NO.  Gary’s answer above was the best and most-accurate. See the rest here:

Link to Article

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Political Exodus

Anyone surprised to hear there are agents soliciting consumers based on their political beliefs?

At first, Stephanie Morris was nervous about leaving Modesto. She’d lived in the Central Valley her whole life, but her family couldn’t keep paying $850-a-month for her sons to share a living room while she, her husband and the baby slept in their apartment’s only bedroom.

The anxiety faded by the time her family pulled out in a U-Haul bound for Salt Lake City on a smoky September night. Morris, 31, had still never been to Utah — her husband liked it when he worked there as a truck driver — but she had discovered a whole world of people planning similar escapes online. They posted faraway landscapes on Pinterest, smiling family photos on Instagram and memes about leaving “Commiefornia” in Facebook groups like “Conservatives Leaving California.”

“I have to keep reminding myself that I’m not moving out of California to a third-world country,” Morris said. “I’m leaving a third-world country to join America.”

Unaffordable housing. High taxes. A Democratic stranglehold on state politics. The concerns driving transplants like Morris out of the country’s richest state during the COVID-19 era are not new. What is changing quickly is how disillusioned California residents are coming together by the tens of thousands on Facebook, YouTube and elsewhere online, fueling a cottage industry of real estate agents, mortgage lenders and political advocates stoking social division to compete for a piece of the muchdiscussed California Exodus.

Facebook groups like “Life After California” are full of stories about $4,000 U-Haul bills and home bidding wars in Texas, but it’s too early to tell if more people are leaving during the pandemic. People move for all kinds of reasons — a new job, to be near family, to buy their first house — and while many online moving groups target conservatives, a parallel migration of more liberal transplants has also scrambled the politics of some red states.

Early polls show that up to 40% of Bay Area tech workers will consider leaving if remote work continues. Recent tax proposals have also triggered familiar warnings about wealthy residents fleeing the state.

Even before COVID-19, California’s population growth had slowed considerably. Since 2015, the state has lost at least 100,000 more people than it gained each year from other U.S. states, including growing numbers of working class and Black residents. But California is still a top U.S. destination for people moving from other countries, plus affluent transplants from other states. From July 2018 to July 2019, California saw a net loss of 197,594 people to other states.

Scott Shepard has watched these forces collide from his new home in Coeur d’Alene, Idaho. The California-bred realtor started relocation website ExitCalifornia.org and a namesake Facebook page early last year, when he saw a business opportunity in the endless stories of friends and neighbors moving out of state. Now, during the pandemic, the site is so busy he doesn’t have to pay for online ads.

“It’s starting to kind of take on a life of its own,” Shepard said. “I would be straight and say that it is primarily political. Then it really does come down to the cost and taxes.”

The anti-California Dream

Exit California is emblematic of a growing number of online relocation companies marketed heavily on social media. They target prospective transplants who skew white, right and over age 30, though renters post alongside members in the market for million-dollar houses. Between photos of tidy brick facades, crystal-clear pools and recommended moving truck routes, the Facebook pages revolve around ominous articles about Black Lives Matter protests, crime, immigration and, of late, pandemic shutdowns.

Prospective movers who click through to the website can pick a state — Arizona, Idaho, Tennessee, Texas — and see financial incentives to use selected realtors, mortgage lenders or other service providers. Beyond the mechanics of buying a house, the online groups are a platform for places to pitch fed-up Californians who don’t know where to start.

“There’s a fair percentage of them that don’t know where they wanna go,” said Scott Fuller, an Arizona transplant and real estate investor who started LeavingTheBayArea.com and LeavingSoCal.com three years ago. “They just know they want to go somewhere else.”

That’s not surprising to Bill Bishop, author of “The Big Sort: Why the Clustering of Like-Minded America Is Tearing Us Apart.” He’s studied how over the past several decades, neighborhoods across the country have become increasingly politically homogeneous. Where people choose to live has become “a stage,” he said, to flaunt their values as old anchors like a one-company career fade into a blur of unstable jobs, anxiety and dwindling time with family and friends.

“What they’re doing is selling a way of life that then corresponds to political choice,” Bishop said. “It’s kind of pathetic, actually, but what the hell?”

Playing politics

It’s not just real estate agents using social media to reach jaded Californians. Sometimes, the California Exodus content is bankrolled by people in high places.

Take the YouTube video “Fleeing California,” which has racked up 2 million views since it was posted in March. It starts with sweeping L.A. views of palm trees and Spanish-tile roofs, then fades to a grainy montage of sidewalk tent cities and a person being pushed in front of an oncoming truck. A moment later, in Texas, viewers see happy kids getting off a school bus and a golden retriever bounding down a jungle gym while Republican Sen. Ted Cruz talks in the background.

The video was made by PragerU, a conservative digital media nonprofit that produces other titles like “Make Men Masculine Again” and “Dangerous People Are Teaching Your Kids.” The California video was commissioned by a donor, producer Will Witt said: Texas ranching and oil scion Windi Grimes, a board director of the Texas Public Policy Foundation and member of Trumpettes USA, a women’s group formed in Beverly Hills five years ago to boost President Trump as the country’s “savior.”

How many people are persuaded to pack up and move by similar videos, social media content or Joe Rogan’s recent podcasts on moving to Texas could help shuffle the country’s electoral map at a pivotal moment. Some of California’s last Republican strongholds, like Orange County, are seeing their residents decamp for other states — a net loss of nearly 25,000 people last year alone — along with notoriously liberal urban areas like L.A., which posted a net loss of more than 97,800 people.

The anti-California political spectacle playing out online has become a hobby for 30-year-old Texas country singer Charley Austin, who started the “Conservatives Leaving California” Facebook group last year. Some members post memes warning newcomers “Don’t California My Texas.” But Austin, who says he has campaigned for Trump, sees an opportunity to keep the state red as cities like Austin (“the San Francisco of Texas,” he said) go farther left.

“There’s nothing really we can do to stop people moving here,” Austin said. “The best thing you can do is help people that move here get acclimated to the state.”

More stories here:

https://calmatters.org/economy/2020/09/anti-california-dream-moving-industry/

2021 Moving Survey Results

The results are in!

We reached 1,692 people, of which 89 participated in the survey, which is about right.

Let’s go through each question.

Q1. Most of the participants (2/3) already live in San Diego County.  The question was passive in nature, but it was interesting that 10 out of 86 people have thought about moving here!

Q2. No surprise that 2/3s aren’t moving, but stunning that the next highest category was those who are selling and leaving California!  Of those who are moving, 37% are leaving the state!

Q3. (No chart) Their results chart was poorly formatted, but 10 out of 70 rated their likelihood of moving as an 8,9 or 10.

Q4. Of those who plan to move, 27% are jumping right on it in the first quarter of 2021!

Q5. Covid-19 only caused 5 people to change their plans about moving?

It’s still 7% of those surveyed, which is enough to change the outcome, especially if we had that much more inventory to sell. The tipping point is probably more like 15% to 20% additional inventory to sell – then buyers might take a step back to see where this is going.

Q6. A bit of a shocker here: Getting My Price was the least concern!  It may look easy, but getting your price in 2021 will require skill and some luck. Finding the Next Home is by far the biggest concern, and if we have more inventory it could grease the wheels a bit.

Q7. Those who aren’t moving would have selected the #4 answer, but glad to see the majority believe in good help!

Others left warm thoughts appreciating the blog and the effort. It’s my pleasure – thanks for participating!

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