fbpx

Out-of-State Price Premiums

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.

Link to Full Article

Priced Out?

Our local home prices have been rapidly escalating over the last year.  First, we ran out of NSDCC houses for sale under $1,000,000, and today there are only 6 for sale priced under $1,100,000!

What are the alternatives for those buyers who want to spend less?

  1.  Buy a house further out.
  2.  Buy a condo/townhouse.
  3.  Get bigger gift from parents or grandparents.
  4.  Keep playing the lottery!

Here’s an example of going just a tad further out. This house is located on the border of Carlsbad, and while it did have ten offers and got bid up $80,000 over list, it closed for $830,000:

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!

~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~

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/

~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~

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/

~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~

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/

~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~

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/

~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~

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!

Boise Frenzy Report

Susie filed this frenzy report on July 8th:

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:

https://www.realtor.com/realestateandhomes-detail/2922-E-Starview-Dr_Boise_ID_83712_M19130-37790

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:

  1. When you see newer one-story homes not selling, then the frenzy deserves to be questioned.
  2. Now that the frenzy is moderating everywhere, it might take you 1-2 years to find the right home.
  3. More buyers being patient means a slower, more deliberate market.
  4. 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.

Emerging Markets

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.”

https://www.realtor.com/research/july-2021-wsj-rdc-emerging-housing-markets-index/

Tax Burden by State

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.

Source: WalletHub

https://wallethub.com/edu/states-with-highest-lowest-tax-burden/20494

San Diego Incoming & Outgoing

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:

Charting the California Exodus

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.

This policy brief uses the University of California Consumer Credit Panel (UC-CCP), a new dataset containing residential locations for all Californians with credit history, to track domestic residential moves at a quarterly frequency through the end of 2020.

 

For the full report of every county in California, click here:

https://www.capolicylab.org/calexodus-are-people-leaving-california/

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.

Pin It on Pinterest