One factor that will slow down the exodus is the increased difficulty of moving out of state – it’s not easy, or cheap, to buy a home outside of California any more. But fewer people leaving will mean less inventory – and could ramp up the frenzy in 2022.
The researchers used open-source data from Zillow or other providers to score the top 100 overvalued or undervalued metro areas in the nation, ranking the cities by a percent premium homebuyers are paying in today’s market based on a history of past pricing.
Here’s how the top 10 rankings landed, according to the research:
Boise, Idaho, where homes are selling at an 80.6% premium.
Austin, Texas, at a 50.7% premium.
Ogden, at a 49.7% premium.
Provo, at a 46.2% premium.
Detroit, at a 45.6% premium.
Spokane, Washington, at a 45.2% premium.
Salt Lake City, Utah, at a 42.4% premium.
Phoenix at a 42.3% premium.
Las Vegas at a 41.9% premium.
Stockton, California, at a 38.5% premium.
The typical value of homes in Boise was over $523,300 as of the end of August, up more than 46% over the past year, according to Zillow.
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!
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:
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!
I think Boise might have topped out but I’m waiting for September. Summers are usually slow here. But the last one put on the market here, a couple streets over in my Movado subdivision was listed for $949,900 (about 2,500sf). We thought it was listed too high. The guy said he was moving to NC to be w/ his grandkids. Two offers: 1. $949,900 but willing to go to $965K. 2. Offer at last minute on a Sunday after an open house? Agent said the 2nd person “just had to have it. Couldn’t wait to “get out of Walnut Creek”. So I have to wait until it closes but can’t wait to talk to them. Walnut Creek is right near Orinda, where I grew up.
There is more inventory here than before, but it still seems like pendings are fast. I’d say the frenzy of multiple offers has cooled off. There may still be multiples but the craziness seems much less.
Then about three weeks ago, she sent in this modern one-story for sale:
This 2015 Trout Architects designed home on the Mesa is built w/ midcentury passion + modern amenities. The single-level home features sunset & city-lights from abundant windows. Tongue & groove ceilings + post & beam construction create open central living spaces w/ generous bedrooms on either side. The front patio is accessible through separate sliders. Private side yard lies outside your 2nd living room. Street setback affords quiet living & indoor/outdoor spaces let you experience the frequent wildlife.
The initial pricing of $500/sf may have been somewhat aggressive by Boise standards, but you’d think one of those Californians with buckets full of money would have gladly paid it for a six-year old turnkey-ready one-story with designer flair.
But no takers in the first two weeks on the market, so they lowered the price by $71,000 on August 4th.
It’s still unsold.
A few thoughts:
When you see newer one-story homes not selling, then the frenzy deserves to be questioned.
Now that the frenzy is moderating everywhere, it might take you 1-2 years to find the right home.
More buyers being patient means a slower, more deliberate market.
Future pricing will be determined by the seller’s motivation, not bidding wars.
The sellers’ motivation hasn’t mattered in the covid era. Even those lowly-motivated sellers who priced their home way too high still got swept up in the frenzy. But not any more, and it starts in the higher-end markets where the inventory is full and the action more balanced.
Hat tip to Rob Dawg who sent in this article that suggests Salinas ranks higher than San Diego and Ventura! I cannot find the 60 metro areas on the luxury list they talk about here so not sure about the overall rankings.
Coastal California has seen a surge of interest as buyers continue to expand out from urban hubs in Silicon Valley, San Francisco and Los Angeles.
Four Golden State beach spots jumped into the top 10 on the luxury segment of the second Wall Street Journal/realtor.com Emerging Housing Markets Index, released Tuesday.
They include Santa Maria and Santa Barbara, California, in the No. 1 spot; San Luis Obispo, Paso Robles and Arroyo Grande, California, at No. 5; and Oxnard, Thousand Oaks and Ventura, California, taking the ninth slot on the ranking, the data showed. Salinas, whose greater metro area includes the highly affluent Monterey area, also made the top 10, ranking No. 8 on the index.
These regions, all north of Los Angeles, offer space for affluent families to continue working and schooling from home without having to entirely pull up roots from California.
“In general, there’s a trend toward areas with less density,” Danielle Hale, chief economist for realtor.com, told Mansion Global. “Buyers are looking for places that are less crowded, where they can spread out and have privacy.”
The index, based on June housing data, uses a slate of indicators to assess the prosperity of emerging housing markets. Those include growth in housing supply and demand; median listing prices; unemployment; wages; a cost of living measure; small businesses; amenities and the share of foreign-born residents—who contribute to the vitality and diversity of the area. In its second edition, local real estate taxes have also been considered.
The 60 metropolitan areas reviewed within the luxury segment of the Emerging Housing Markets Index are ranked based on housing data for the top 1% of each market and the weighted sum of those metrics to determine which have the hottest high-end markets.
California has a mix of densities, from big cities to small towns, Ms. Hale continued, which gives affluent buyers options when they are looking for a new residence. That bodes well for markets in what have traditionally been second-home destinations, such as Santa Barbara’s extremely affluent Montecito and Malibu, but also attractive under-the-radar coastal locales like Oxnard.
“The top markets in the mainstream ranking tend to be not necessarily vacation-oriented spots,” Ms. Hale said of the overall, non-luxury rankings, of which Billings, Montana, came in No. 1 this time around. “That’s not true for luxury.”
The influx from more dense areas like Los Angeles is certainly evident in Santa Barbara, according to Billy Rose, co-founder and vice-chairman of The Agency.
“There are bidding wars on nearly every property,” he said. “Homes are being resold not very long after they were purchased for high premiums and agents are peddling pocket listings more than ever.”
If you are thinking about moving out-of-state, here’s another data point to consider:
This year, Uncle Sam took his cut of the past year’s earnings on May 17, slightly later than usual due to the COVID-19 pandemic. Many taxpayers are undoubtedly wondering how this year’s Tax Day will affect their finances, as a lot of people are struggling financially as a result of the pandemic.
Since the tax code is so complicated and has rules based on individual household characteristics, it’s hard for the average person to tell how they will be impacted.
One simple ratio known as the “tax burden” helps cut through the confusion. Unlike tax rates, which vary widely based on an individual’s circumstances, tax burden measures the proportion of total personal income that residents pay toward state and local taxes. And it isn’t uniform across the U.S., either.
To determine the residents with the biggest tax burdens, WalletHub compared the 50 states across the three tax types of state tax burdens — property taxes, individual income taxes and sales and excise taxes — as a share of total personal income in the state.
People are curious about where today’s buyers are coming from, and while results may vary for each individual neighborhood, we might be able to get a general sense from data like this.
Not everyone who is looking is an actual home buyer, and not everyone uses this search portal.
But this data backs up the latest idea that people tend to want to stay close to home. Almost three-quarters of those looking at San Diego real estate are local folks, and more than half of the rest are from L.A.
San Diegans are looking at these destinations also – this is interactive is you’d like to explore further:
My guess was that we’d have 10% MORE listings this year, as a result of there being a few more reasons to move – covid letting up, Prop 19, forbearance expiration, etc. Instead, we have covid hanging around, Prop 19 has been a dud, and forbearances have been extended through the year.
With 19% FEWER listings (so far), the impact shifts to pricing, and we see rapidly-rising home prices instead. We need more people leaving, and fewer people coming, to balance it out – and price will fix that too!
Hat tip to CP for sending this in this report from CPL:
Recent news reports, preliminary data, and anecdotes suggest the COVID-19 pandemic is either causing or accelerating an exodus from California. The extent of any such exodus, and whether it proves to be temporary or permanent, is not yet clear — at least not in data sources traditionally used to quantify residential mobility.
The stakes are high: significant population shifts could affect the size and composition of regional labor markets as well as rent and home values. Some fear that mass departures by the state’s wealthy could reduce local and state tax revenues, potentially affecting the services governments are able to provide for years to come.
A move is defined as having a different ZIP code in the next quarter. The data universe for this analysis is individuals in the UC-CCP with credit history; this population is older, more financially advantaged, and less diverse than the population of all adults in California.who had a different zip code on their credit report.
Jim the Realtor is legit - I interviewed three brokers; he said list price should be $100,000 higher than the other two brokers; listed it with him and had all cash (no financing) offer in two days, five day contingency period, closing in two weeks - and it closed at his recommended list price. I could not recommend anyone more than I recommend Jim the Realtor.
When we moved to San Diego in 2005 we rented a big house on Mt. Soledad (La Jolla) with 180 degree ocean views for the same payment as a mortgage on a dump in Chula Vista. Clearly something was wrong. Yet, the media was full of the usual happy-talk nonsense, so I was glad to find Jim's blog. I've followed his honest assessments and data since.
We decided to sell and move to AZ at Thanksgiving. Dec. 1st we met with Jim to sell our home. We closed today (29 days later). Jim orchestrated a feeding frenzy -- we had 25 showings in 2-1/2 days, multiple offers, and sold for well over asking price. I'd say he earned his commission! We have owned and sold homes in 5 different States always using experienced, productive, full-time realtors. Jim outshines them all.
You don't decide to sell and close 29 days later over Christmas (with COVID lockdown) without some miracles. Donna was amazing at performing lots of those miracles and ensuring that everything was done right and on time. They are a terrific team with a very responsive and professional network.
Where do we begin..2020 has been a year for everyone. When COVID hit and shut down both my husband and my businesses, we were left with a mortgage and very little income coming in. We were stressed, scared and felt stuck. We made the hard decision to sell our home and move out of state. We contacted the Klinges' and spent a good hour going over what we hoped we could accomplish. Jim and Donna came over with comps in hand and suggestions on improvements to get our house ready for the market. It was overwhelming to think about, but Donna was there and one step ahead in every scenario. Basically we just approved what they suggested and Donna handled literally everything. We placed our house on the market and within the first day we had multiple offers well above asking price! We couldn't believe it. We were overjoyed! Jim countered the offers to weed through them, and everyone came back with way more. It was amazing, and we are ?? sure it was because of the staging and repairs the Klinges suggested we do.
Due to unforeseen dishonesty from the buyers lender, we hit a big hurdle when trying to close. We had already moved out of state and were shocked when three days before closing the lender dropped a bombshell on the buyers and us. However, Jim and Donna handled it like veterans, not afraid to play hard ball and represent their clients. After a few phone calls with us, and several between Donna and the lender, they had a plan B-Z to make sure we were taken care of. In the end we closed with even more money than we ever thought possible and with very little work from us. The Klinges handled this entire "2020" worthy event with the utmost professionalism and did everything in their power to not only make this as smooth as possible for us, but we also walked away with more money from the sale of the house than we ever hoped for. After working with Jim and Donna, you don't ever use anyone else. They are hands down the best team to represent you in any scenario.
Working with Klinge Realty Group was a great experience! They are very responsive, professional and knowledgable about the real estate market! I would definitely recommend Klinge Realty Group.
Jim and Donna Klinge made the sale of our condo extraordinarily easy. They know the market and gave us sound advice backed by details and very considerable experience, reflected both in the initial pricing and subsequent negotiations. They work together as a team and are always available to talk. We had a few challenges with our property and they were able to coordinate the resolution to everything, including items that I would not think would ordinarily be their responsibility to handle. They made the whole process effortless on our part. They are folks with high integrity and we cannot recommend them highly enough.
Review for Member: Donna Klinge
I cannot believe there are no reviews of Donna yet, ugh!! She is the secret sauce of the Jim Klinge/Donna Klinge combo! I will touch on Jim here, but Donna is why I'm so totally loyal to these two (no offense to Jim :)).
I consider myself a rather savvy buyer/seller. I've bought/sold 7 times in about 15 years. On the buy side, Jim is the PERFECT combo of: completely digitally savvy (he will pull data all day long until you feel comfortable with your chosen house, area, school district, anticipated appreciation rate...anything!), he's super well respected and known in the area by other agents, an amazingly cool but strategic negotiator, is totally devoid of desperation for a sale/commission, and more.
Then once you get into contract phase, Donna literally handles every last and final detail in a concierge-like manner -- totally shielding you from the daily back and forth, noodling and annoyances of the buyer's requests. She solves it ALL; it's miraculous what that woman accomplishes over and above what is even expected in a buy/sell transaction.
On the sell side, Jim and Donna do the same, but even moreso. Donna in particular truly takes everything off your plate: she'll manage getting the house painted, the carpets replaced, she'll go on site (as she Jim both did for me when selling our rental properties) to work with the renters and make sure the house is ready to show -- freeing me to have to take time off of work to do so. They work with A+ integrity, too, so you know you are serving all parties fairly and lawfully throughout.
A home purchase/sale is the most considered you'll ever make. HIRE A SAVVY AGENT, not a friend!, and get what you need out of the transaction. Jim and Donna are our agents for life.
Jim and Donna Klinge are by far the most professional, personable and responsive realtors I have ever worked with. They provide VIP concierge level service in every area of the process of selling your home. My home was marketed so successfully that we received an offer the day after our first and only open house. Thanks to Jim's pricing and negotiating, our house is now the highest sold in our community. Jim's vast experience means he has worked with several realtors and knows the market all over north county. Donna is AMAZING in processing everything in the transaction. She scheduled trades people to work on the house in preparation for the sale as well as the repairs needed before closing. She communicated clearly every step of the way about what would be happening. She took the weight off my shoulders for the whole process. I will always use Jim and Donna for my future real estate needs and I whole heartedly recommend them to anyone buying or selling a home.
Jim and the team at Klinge Reality are without a doubt the best in the business! Not only was Jim helpful and extremely knowledgeable, he was patient and determined to help me find my first home. Jim and his team have been in the business for many years, and it shows. Jim is a wealth of knowledge and was my biggest proponent despite the temperature of the competitive market. I ended up getting the perfect property in my dream neighborhood all thanks to Jim. From the day my offer was accepted, Donna was a real lifesaver. She was extremely helpful, responsive, and knowledgeable when it came to every minute detail, and held my hand through the process. As a first time home buyer I had no idea what the process would entail, but Donna curtailed every concern I came across and made the escrow process feel seamless. Jim and Donna provided me the best home buying experience, and I am very grateful for all they did for me. It was truly a pleasure to work with Jim and Donna and I am already looking forward to the next time we work together!
Review for Member: Richard Morgan
Richard is an amazing realtor! He has high integrity and genuinely cares about his clients and their needs. Richard paid close attention to what I was seeking in a home and was very patient in our search to find it. I would highly recommend Richard and will use him for future transactions. Truly a different kind of realtor experience!
Could not be happier with my experience with Jim and his team. He helped me sell a very unique and challenging property. Throughout the entire process he was always available, honest, transparent, trustworthy, and always put my interests as a seller first. A (rare) true professional! During close of escrow Jim went above and beyond to complete the deal. It would not have been possible without his experience, fantastic team, and pure dedication. Highly recommended!
Thanks Jim and Donna Klinge!