Chic vs. Geek: What causes low inventory?

This week, we explain the variety of factors at play in a hot and competitive housing market.

CHIC (PEARL)

Low Interest Rates

Low interest rates are great for homebuyers, but they also make it easier for homeowners to keep their current homes and buy another, rather than selling. Over the last decade, an estimated 7 million properties have been taken off the market by homeowners and businesses investing in rentals. This is evident in the success of rental companies like Airbnb and VRBO.

Aging in Place

More and more Baby Boomers who bought low decades ago are choosing to stay in their homes and “age in place” – especially in the uncertain age of COVID. With prices soaring across California and the nation, where would they move?

Coming of Age

Meanwhile, the largest generation in history, Millennials, is about to hit the median age of a first-time homebuyer. That means an even greater strain on an already limited inventory and a fiercely competitive market into the foreseeable future.

GEEK (KEVIN)

We’re Not Building Enough

Ever since the housing bubble burst 12 years ago, homebuilders have slowed their pace and become more risk averse. According to Census data, an average of 1.5 million homes have been built each year in America since 1959. However, over the past decade, the pace has slowed to just 900,000 homes a year. Limited production, coupled with enticingly low interest rates and a generation of first-time homebuyers all combine to exacerbate the crisis.

Housing Policy

The CARES Act foreclosure moratorium has kept financially distressed homeowners from selling, but foreclosures were already at record lows before the pandemic. In fact, according to a recent report from CoreLogic, U.S. homeowners have seen their equity increase by $1 trillion since the third quarter of 2019, an increase of 10.8% year over year. So, even with 2.5 million homeowners in the mortgage forbearance program, we shouldn’t expect a wave of foreclosures when the moratorium is lifted.

Chic vs. Geek: Healthy Home, Healthy Living

You never know what’s lurking below the surface, especially when it comes to plumbing and sewer lines in an old home!

CHIC (PEARL)

A client who recently bought a single family home got a rude awakening when they found out the plumbing connecting their house to the sewer line had been impacted by tree roots and sprung a leak. The good news was they caught the leak before it spread into their home. We connected our client with a top-notch plumbing crew to clean up the mess, but it was still an unexpected cost, and the problem could just as easily have gone unnoticed until it was too late and our client was faced with a very stinky situation.

GEEK (KEVIN)

If you’re looking at a house that’s at least 50 years old, it likely has galvanized pipes that are in need of an upgrade. This is something that could easily evade an inspection, and if the plumbing hasn’t been used for a few months, there could be a backup brewing. In a competitive Bay Area market, it’s hard to expect a seller to invest in an expensive upgrade. That’s why it’s a good idea for a homebuyer to put some money aside in your budget to do the upgrade yourself after you acquire the property.

Chic vs. Geek: (Practical) New Year's Resolutions

Everybody wants to lose weight or travel to distant places or finally finish those DIY projects around the house, but who has time for all that?

CHIC (PEARL)

I’m going simple with my resolutions for 2022. First, I’m going to drink a cup of water as soon as I wake up to get started on my daily hydration and give my gut a wash before the day begins. I’m also going to train myself to sit up straight when I’m working on my computer. I have a tendency to hunch over, and it’s not good for my back. Speaking of which, I’m also going to stretch every morning to work out all the kinks!

GEEK (KEVIN)

Sticking with the practical theme, I’m going to do my best to put my phone down while we’re eating dinner. Pearl and I are both guilty of this, and I’m sure a lot of you are, too! Quality time is one of the most important elements of a healthy marriage. So couples should take every opportunity to connect, even if it’s only for a few minutes each day. Just like any other resolution, once you get into the habit, it’s not that hard to keep up!

How about you? What’s your New Year’s resolution? Share it with us in an email, and we’ll send you a bag of our signature Chic ‘n’ the Geek holiday roast coffee beans!

Bora is ready for her close up!

Chic vs. Geek: On the Road - Lake Tahoe

Let it snow, let it snow, let it snow! Lake Tahoe may be one of the hottest real estate markets in the country, but right now it’s one of the coldest places on the planet. Is it worth the investment?

CHIC (PEARL)

We were dreaming of a white Christmas, so last week we escaped the Bay Area and drove to South Lake Tahoe. Needless to say, we’ve seen more snow than we ever could have dreamed, but at least we didn’t get stuck on the highway. Anyone who’s been to Tahoe knows to check the weather forecast and road conditions before you even get in the car. If you’re thinking of buying a first or second home here, it’s key to find a property that’s properly prepared for the elements.

GEEK (KEVIN)

There’s no way to plan for a polar vortex or an atmospheric river, any more than you can plan for an earthquake. But that doesn’t mean you can’t be prepared for the worst. If you’re moving to a winter wonderland like Lake Tahoe, look for a home outside of avalanche zones and close enough to town that you’re not at risk of being cut off from the world by a fallen tree or fresh snowpack. You’ll also want a place with good insulation to save on the heating bill and keep things warm and cozy!

Take it from us: Walking in snow shoes is harder than it looks!

Chic vs. Geek: Year In Review

2021 has been a truly historic year in real estate, and to prove it, we’re serving up a feast of information with a side of market stats. Dig in!

CHIC (PEARL)

Empowered by low interest rates, a record number of home buyers found their forever homes. 31% of all home buyers were first-time buyers, and 92% of agents agree low interest rates continue to boost buyer demand. According to the National Association of Realtors, the median price of a U.S. home was $356,700 in 2021, a 14.9% increase from one year prior. 53% of agents report that inventory in their market is rising modestly as of Q3, and 76% of agents say homes may get multiple offers but with fewer bids per home.

GEEK (KEVIN)

Nationwide, 95% of agents report it’s still a seller’s market, no matter where you look. 46% of agents say buyers will use savings from simplified living during the pandemic to afford homes in the current environment, while 45% of agents are seeing buyers turn to relatives or generational wealth to fund their home purchases. 37% of agents have seen buyers liquidate gains in stock market wealth to put toward a home, and 64% of agents in the Pacific region have seen a recent increase in ADUs/in-law units thanks in part to newly reduced regulations.

As we celebrate the holidays, we want to express our appreciation for you and all of our clients. From Santa Rosa to Santa Cruz, thank you for choosing us to help you find your place in the world. Please reach out for insights on your next move, and never hesitate to provide us with a referral!