If you’ve been reading my newsletters, you were not surprised when the media finally picked up the story that our market has slowed. I’ve been writing and talking about evidence pointing toward a slowdown since mid-2018, but most people didn’t catch on until several quarters later or even into 2019.
The market is different. I think very few people would try to argue our market is the same as a year ago. Prices are down, urgency has waned, days-on-market are up and political tension and tariffs have escalated. Ironically, with all these issues, interest rates are still ridiculously attractive.
Thank you GENTRY MAGAZINE for the inclusion in the $50 Million Circle for Realtors, especially since there are thousands in our area! So proud to be recognized for tirelessly working and doing a great job for my clients.
What motivates someone to buy a home? Life changes such as marriage, children, job transfer, an investment decision, or simply the desire for a quality-of-life improvement. Whatever the driving factor to purchase in our region one thing is for certain, it is expensive. As one could imagine, I’ve yet to have someone say to me they were buying a home because it is inexpensive.
My last year of eligibility! Thank you GENTRY MAGAZINE for the inclusion in the 10 Under 40 for Realtors, especially since there are thousands in our area! So proud to be recognized for tirelessly working and doing a great job for my clients.
September was a significant month to determine whether our real estate market would be considered a seasonal trend or transitioning market [June 2018 Newsletter]. The typical traction I see following the summer slowdown did not happenthis year, so the lack of market-momentum and confidence has shifted the overall conversation to pontificating the causes of the slowdown and how deep it will go.
It’s been quite a summer for real estate. The seasonal slowing we consistently see play out makes both buyers and sellers step back and question the market condition. We know summer is an uncertain market, so it should be no surprise that we experienced a noticeable decrease to buyer urgency, aggressive offers and the “must-get it at all cost” attitude.
I'm sponsoring the PAMP Family Day (wonderful event, more about it below) and will be hosting a kids' succulent planting station! Be sure to stop by my tent with your kids so they can help make your home a little brighter, and have fun while doing so. Each child will get the opportunity to scoop dirt, choose their succulents and plant them in an adorable little white pot. The PAMP (Parents' Club of Menlo Park and Palo Alto) is holding their annual Family Day on July 29th in Mitchell Park. It's free for all members and includes food and lots of fun activities including a live children's band, petting zoo, face painting and more.
I’m beyond thrilled to be named the recommended Realtor professional in PAMP’s “Guide to Entering the Local Real Estate Market - Top Tips for Families!” PAMP (The Parents' Club of Palo Alto and Menlo Park) is the largest parent organization on the Peninsula and a fantastic place for families to connect! This month, I'm also the resident “Expert” in their “Ask the Expert” series. Through Facebook, PAMP members can post real estate questions and I'll be answering them. If you have children and you live in this area, I strongly encourage you to join this wonderful community!
Has the market cooled? As different as the market may be over the past several weeks, it still has signs of our summer seasonal trend, though what most interests me is whether the inertia and fear may transition the market into a flat or downward trajectory.
Until recently, buying or selling a home typically involved newspaper ads, weekend open houses, and physically driving around to gain insight about properties and neighborhoods. Cars didn’t yet have navigation systems and smart phones with Google Maps didn’t exist. Getting lost was sometimes part of the adventure.
Technology is known for disrupting industries, so it should be no surprise that new technologies have been entering the real estate industry over the past 15 years. What started off as a rather clunky attempt to get into the real estate space has now become a juggernaut in the day-to-day real estate conversation with companies like Zillow and Redfin. The deep pockets of these tech companies have dramatically increased their marketing exposure evident by the many TV ad spots during the recent Winter Olympic Games.
Who would have thought that a highly turbulent and divisive Trump Administration where no major legislation was passed (pending tax reform) with constant shakeup and uncertainty within the leadership and some of the worst global tensions in decades, still enabled Wall Street markets to shoot up 20-30% and digital currencies up eleven-fold.
2017 started off slow with plenty of uncertainty to go around. Homes were sitting on the market longer and accurate pricing was very important. It seemed that the trend would continue through the year, but then the stock market started increasing at a rocket’s pace and our local real estate market followed suit. By May, a new euphoria set in with new money being cashed in to buy homes and an unexpected confidence. Local prices are now well above any historical standard and anxious homebuyers are doing anything they can to purchase a prized Silicon Valley property.
Summer 2017 ended up being a typical summer – slower open houses, fewer motivated buyers, albeit enough to absorb current inventory levels, and isolated pockets of price adjustments (increase and decrease). The listing price continued to be a crucial piece of marketing a property as it dictated the kind of activity level generated. Poor preparation to homes equated to fewer dollars in the seller’s pocket. We did not see a significant change to average prices and buyers were left wondering what the market was going to do in the coming quarters. There were a few pocket neighborhoods that experienced a bump to prices, but those locations started lower than comparable competing locations. Inventory was lower than previous summers, which influenced buyers’ fear on what to expect through year-end and into 2018. Though we may not know where the market is going, we know some facts about the current climate that should be considered when deciding whether to buy or sell real estate today:
It’s every child’s favorite time of year – summertime! It’s one of my favorite times of year in real estate because year after year uncertainty kicks in and we see a market that changes before our eyes, if only for a handful of months. In the past week, multiple real estate professionals contacted me to discuss observations of a slowing trend in their neighborhood. This is not a surprise, as with every summer cycle we see specific trends irrespective of compounding variables such as the current political climate and global uncertainties. Are we experiencing the typical adjustment to the market or is something greater brewing? It is too early to gauge, but I think it is a timely conversation to discuss what you can expect in the coming months and those factors that should get special attention.
What market cycle are we in and how does that impact my buying/selling decision? It’s a great question, but the answer is more complicated: Which cycle are you referring to? And what action do you plan to take based on the response? You may hear that summer is the best time to sell your property, but are you aware that many bay area residents travel internationally during the summer months and your best buyers may be out of town? How about knowing the right time to buy? There are many variables to consider that will impact timing for your purchase. I argue we constantly have two independent cycle forces in play – Seasonal forces and Climate-driven forces. I will address each, their respective nuances, and ways to maximize your goals within the cycles.
2016 in Review: I am sure you agree – this has been a year of surprises. The Chicago Cubs won the World Series for the first time since 1908, Britain approved the Brexit and will leave the EU, and the U.S. Presidential Election shocked the world (except for Peter Theil). Additionally, the Fed did not raise the interest rate in 2016, as anticipated.
Would you believe that rental prices have flattened and are lowering in some areas? If you ask ten people almost all of them will say, “The rental market is hot,” but if you are looking for a rental or have one to lease, you may have a different perspective.
This is not something I expected to see this year – with the strong bay area job market and confidence flying high with all-time peaks in the stock market. I expected the rental market to continue a strong run at least through 2016.
Summer is quickly approaching. As we bid farewell to the spring market, we must remember that it has provided a gauge of the market momentum that is likely to continue through summer. As 2016 progresses, it has been interesting to watch the small nuances and changes that affect the daily climate: anecdotal stories of buyer and seller motivation, sale price fluctuations and an overall paradigm shift in thinking. How do you adjust your strategy in a changing climate? Should you buy/sell now, or wait? How long until the market settles?
The real estate market is dynamic: it goes up, it goes down and sometimes it is flat. Regardless of its state, Buyers and Sellers can expect the best scenario by being smart – constantly evaluating the current conditions and understanding external variables that may impact the market now and into the coming quarters.
There will be Sellers and Buyers in any market, so how are we going to be the best Seller or best Buyer? I work closely with my clients to bring them the most up-to-date information on the market, preparing them better than the competition and allowing us to be the best negotiator when it’s offer time. Below I highlight and discuss the top missed opportunities to get the most out of the market – for both Sellers and Buyers. These are overlooked points I constantly see and things I make sure don’t happen to my clients.
We have seen a remarkable rise in net worth over the last several years recognized by increased portfolios and property values. Since January 2010, the S&P 500 has nearly doubled, the DJIA is up over 70%, and many local communities’ home values have increased over 60%. Our valley has experienced a remarkable transformation from the valley of silicon and chips to mobile technology and cloud computing. Heavy investor funding: from venture capital to private and conventional money, has fueled our innovation hubs and our portfolios. This bullish market is largely thanks to our friends at the Federal Reserve.
California released the highly-anticipated student performance scores from the California Assessment of Student Performance and Progress (CAASPP), also known as “common core,” this fall. Since the previous scoring system, STAR, ended in late 2013, many have been anxiously awaiting the new methodology and how it would impact student performance: will it be a better indicator of student success or create a larger divide among the star students and the students lacking the tools to be successful? These are the first results under the new testing process, so needless to say many districts, teachers and students are learning how to adapt.
Many forecasters are predicting that our rain levels this winter due to the El Niño weather pattern could be the strongest on record. I remember the last big El Niño winter, 1997-98, when record storms pummeled the state. Highway 101 was completely flooded, homes along the coast slid into the ocean, and there were severe flooding in the flats and mudslides in the mountains. And to top it all off, wherever there was standing water, structural property damage and mold issues occurred.
This summer was busy for global economy: the Greek bailout, China’s devaluation of currency, global market indexes on a roller coaster, tanking oil prices, and more Fed uncertainty about interest rates. What impact do these have on our local real estate market?
Locally, you may have noticed homes in your neighborhood taking a bit longer to sell or the selling prices seem lower than what you witnessed in spring. Are these local factors stemming from the global occurrences from the summer?
You have likely heard about foreign investors buying up real estate in mass volume with suitcases of cash. Experts and articles suggest this newer phenomena is driving the market with no end in sight with statistics supporting these claims. I hear this conversation continue at coffee shops, dinner parties and the like. I would like to suggest that the fear-mongering mentality of the news media has the goal to get the attention of the audience by selling stories, so I would like to provide an alternative perspective that I have assessed through my daily interactions with clients.
Marriage is the biggest life changing and far reaching decision for an individual. Buying a home is the biggest life changing and far reaching decision for a family. One needs a trusted, experienced advisor in this arduous journey, especially in a dynamically changing white-hot market.
5 Stars for Nick! He has sold 2 houses for me. In this last transaction (February 2018), Nick was able to get multiple offers (7 total) and close on a selling price that was +20% above the asking price. That was big for my family and real $$$ in my pocket!
Nick French is a superman of a realtor! We have had the pleasure of working with him on both a purchase and sale of real estate. For our home purchase, he worked with us tirelessly for nearly a year to choose just the right home for us.
Our experience with Nicholas French was superb! Nicholas is very dependable, professional and knowledgeable. His diligence and attention to detail is an asset to any home buyer. He knows his business and the area very well and was able to find us the home that we love.