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Blaine Morris

Pacific Union Marin Real Estate Quarterly Report: Q1 2018

By | Marin Real Estate News

From Pacific Union International Chief Economist Selma Hepp – April 13, 2018

Marin County’s housing market followed the typical seasonal pattern in the first quarter of 2018, with a slow January and February, then a jump in March. March sales, however, were constrained by a lack of homes for sale, which have been continually declining. Overall in the first quarter, there were about 16 percent more sales of homes priced at more than $1 million than during the same period last year. 

Nevertheless, buyer eagerness amid low supply has translated into a strong increase in median home prices, and especially robust appreciation for homes priced below $1 million. Marin County continues to lure buyers from the Wine Country who may have been affected by the fall wildfires.

Buyers are also slightly more aggressive, and relatively more homes sold over the asking price than during the same period last year at a faster pace. Buyer competition picked up notably for homes priced above $3 million, and half of those properties sold for more than asking price, compared with 18 percent at that price point that sold over the asking price in the first quarter of 2017.

Looking Forward: While strong open-house traffic in March suggests that homebuyers in Marin County communities are eager to re-enter the market, a lack of homes sale may hold back sales during the spring season. Buyers do not seem yet to be affected by rising mortgage rates or the tax-reform package.  

Defining Marin County: Our real estate markets in Marin County include the cities of Belvedere, Corte Madera, Fairfax, Greenbrae, Kentfield, Larkspur, Mill Valley, Novato, Ross, San Anselmo, San Rafael, Sausalito, and Tiburon. Sales data in the charts includes single-family homes in these communities.

 

To drill down on specific Marin County neighborhoods, click here to see the Pacific Union Q1 Real Estate Report in full.  

Marin County Q1 Real Estate Report

More Than 70 Percent of Bay Area Homes Sold for Premiums in March

By | Marin Real Estate News

Homebuyer competition in the Bay Area remains as intense as ever this spring. Pacific Union Chief Economist Selma Hepp offers a detailed analysis of local housing market conditions in March.

Executive Summary:

  • Sales of homes priced higher than $1 million increased by 30 percent in the Bay Area in the first quarter, with even stronger gains in the South Bay and Silicon Valley.
  • Demand for homes priced above $3 million remains robust, jumping by 45 percent from last year’s first quarter.
  • Inventory has declined on average by 10 percent to 20 percent on an annual basis in the last year.
  • In San Francisco, new listings are down across all price ranges, for an overall 23 percent decline.
  • Sonoma, Contra Costa, and San Mateo counties saw slight increases in new listings, though mostly in higher price ranges.
  • Newly constructed condominium inventory in San Francisco is at half the level from a year ago, with about 600 units on the market.
  • Appreciation soared in March, with the median price in the Bay Area increasing by 19 percent year over year.
  • Santa Clara County’s median price jumped by 34 percent year over year in March.
  • The share of homes selling for more than asking price reached a high at 74 percent for the Bay Area and 86 percent in Santa Clara County. Sonoma County saw the lowest number of premiums, with 52 percent of homes selling for more than asking price.

Read the full article HERE.  

Just Sold! 190 Drakewood Place, Novato, $1,375,000

By | Marin Real Estate News, Novato Real Estate

190 Drakewood Place, Novato CA

Elegant and inviting 5 beds/3.5 baths home overlooking some of the most beautiful views in Novato. Each room is spacious and well-appointed, but retains an intimate and cozy feel. Ideal for entertaining, with a large kitchen, living & family rooms & two fireplaces inside, and terraces, patio areas, mature gardens, a pool and decks outside. Located on over a quarter acre on a quiet cul-de-sac, this is the home you’ve been waiting for.

Just Sold! 386 Oak Manor Drive, $1,250,000

By | Fairfax Real Estate News, Marin Real Estate News

Sold off market!  Available for the first time in over 46 years. One of the very best lots in desirable Oak Manor, this was the original builder’s own custom property.  3BR/2BA home sits on a premium level lot of over 1/4 acre with all-day sun.  Soaring cathedral ceilings, open floorplan, and tremendous pride of ownership.  Large yard offers sparkling pool and many play areas.  Just a couple of blocks from award-winning Manor School, and close to trails, the perfect home for hikers, bikers, and neighborhood lovers!

Blaine Morris – 2016 Marin Association of Realtors – Realtor of the Year

By | California Association of Realtors, Marin Association of Realtors

Realtor of the Year, Blaine Morris

I am truly humbled and extremely proud to have been named the 2016 REALTOR of the Year by the Marin Association of REALTORS! Thank you to everyone who has reached out to me, what a whirlwind! A special thank you to David Smadbeckand Mary Kay Yamamoto for recruiting me into MAR leadership. And a very special thank you to my mentors Katie Beacock and Kay Moore for you guidance with the local, state and national associations. Finally, a special thank you to my managers Brent Thomson, Kate Supple Hamilton, and Cyd Gardner for your encouragement and support while I’ve been out of the office tending to my volunteer responsibilities. These past six years have been among the most rewarding of my professional career, and I am so thankful and blessed for the opportunity!

Just Listed, 25 Green Point Lane, Novato, $1,199,000

By | Marin Real Estate News, Novato Real Estate

25 Green Point Lane, Novato

Privacy and panoramic views await at this well-constructed home in desirable Green Point! Down a quiet lane with four bedrooms and three bathrooms, pride of ownership is evident throughout. Large home on a nearly 2-acre +/- lot with quality finishes. Updated kitchen with high-end appliances, custom floors, built-ins, and high-end details everywhere. Large family room on lower level allows for separation of living spaces.  30 minutes north of San Francisco, convenient commute location, close proximity to the best of Marin. Near Stonetree golf club, wineries, hiking, biking…the best of the North Bay. Come home to Green Point, the perfect home base for your active Marin lifestyle!

4 Bedrooms, 3 Bathrooms

$1,199,000

Ross Valley Sewer Lateral Update, Upcoming MAR Installation Luncheon and San Rafael Coffee and Codes Meeting

By | Marin Association of Realtors, Marin Community News, Marin Real Estate News, Regulations, Ross Valley Sanitary

Good day MAR Members!

One of my goals for this week’s memo was to not talk about the weather or what I did this weekend. Well, my bad:

What a great weekend! I can’t believe that after nearly 21 years in Marin I just discovered the Big Rock Ridge trail above Lucas Valley. It’s newer-ish, having opened in 2003 after a donation by George Lucas, and as such it was not in several trail guidebooks that I use. Reached by parking at Big Rock, it’s a gentle yet constant climb on the south-facing slope of Big Rock Ridge, and it’s open for both hikers and bikers. Unlike our bustling trails in Ross Valley and Southern Marin, this trail was nearly deserted despite a nearly 70-degree Saturday mid-day. Views to forever, and a very cool glimpse right down over Mr. Lucas’s Skywalker Ranch. Gracie and I had a great walk, before we had to leave her behind to head down to Palo Alto for the big game between Stanford and Utah. OK, it wasn’t THE Big Game, but big nonetheless for me and some friends from school. I won’t gloat, as it was a pretty snoozy game right up until the thrilling double-overtime finish…another win for UTAH.

Thank you, again, for indulging me. Now, a few housekeeping items before the latest Ross Valley Sewer Lateral update.

MAR INSTALLATION LUNCHEON

Another reminder before we enter the busy Holiday Season about MAR’s annual Installation Luncheon on Tuesday, December 9th. We will be installing Matt Hughes as our 2015 MAR President, along with the rest of his leadership team. CAR rising star Imran Polodi will be officiating the installation, and he is always a super interesting speaker as the Chairman of CAR’s Young Professionals Network forum. Plus we will have MAR Member Kevin Patsel as the Master of Ceremonies. Marin’s Women’s Council of Realtors will also be joining with us and installing MAR Member John Zeiter as its 2015 Marin WCR President. Click HERE to register, and please help us spread the word about this terrific event.

WCR ENTREPRENEUR OF THE YEAR CELEBRATION

Speaking of Women’s Council, please join me in congratulating MAR member Katie Beacock for winning this year’s award for WCR Entrepreneur of the Year. An Evening Soiree in her honor will be held this Wednesday evening at McInnis Park from 5:30-7:30 PM. Katie is Past President of MAR, and she is 2014’s Region 4 Chairwoman for the California Association of REALTORS®. A true Marinite, she has served our community tirelessly for many years, and this award is richly deserved! Katie is also one of my go-to spiritual advisors on all things MAR and CAR-related. Her advice is always spot-on, and I encourage all of you to take advantage of her experience and leadership when trying to solve a challenge or seize an opportunity. There is still time to secure your spot by clickingHERE, and I believe walk-ups will be welcomed as well. It should be a great night!

BAREIS CLASS A DIRECTOR NOMINATIONS DUE TODAY!

One final reminder to BAREIS Class A Members that nominations for 2015 Class A Directors are due TODAY by 5:00 PM. If you’re a BAREIS Class A Member, a letter was mailed to you on October 10 outlining the nominating process. Again, neither I nor MAR have any authority at BAREIS, but the Class A Members do have the ability to participate in the nominating process for Marin’s two Class A Directors. MAR encourages you to take advantage of this opportunity to participate in the leadership nominating process at BAREIS.

ROSS VALLEY SEWER LATERAL POINT OF SALE UPDATE

Thank you again to the quarter of our membership who participated in the Call to Action to inform the Board of Directors of Ross Valley Sanitary District earlier this month. The agency has heard MAR’s message, and on Friday RVSD General Manager Greg Norby alerted MAR CEO Andy Fegley that the infamous, mandatory, expensive and frivolous pressure test requirement has been modified substantially. All of us couldn’t understand why this test…which RVSD openly expects 85-90% of the houses to fail…was being mandated by the agency before any other inspection or test was to occur.

In a modest victory for MAR, the pressure test has been moved to the end of the process instead. As I understand it, now RVSD will require a video inspection consistent with other agencies. If that inspection concludes that the lateral needs replacement, a process will be in place to oversee the replacement of that line. A pressure test will now be the LAST step. If the video inspection determines that the line looks good, a pressure test WILL be required to confirm that the line is in good shape. In addition, a pressure test will be required to confirm that work to replace any sewer lateral was correctly performed.

This all needs to be voted into policy by the RVSD board, by the way, at its December meeting.

So there still will be a pressure test requirement at the end. But for the estimated 85-90% of the lines that will fail such a test, we’ve eliminated the frivolous pressure test at the beginning of the process. Thus, we will save the homeowners of Ross Valley $500k per year in frivolous tests.

I still don’t like it, and I still expect this process to be cumbersome, expensive and time consuming. In the absence of hard data, however, MAR is going to work with RVSD to streamline the process and educate our membership on this ordinance’s implementation…however flawed it still may be.

I know many of you are seeking specifics on the choreography of this process. Specifics are still lacking, but my expectation is that in the coming weeks the specific implementation policy will be defined by RVSD. Thank you for your patience.

MAR and RVSD will be hosting a session in December to educate the membership and community on RVSD’s plan for implementation. Details and registration info will be forthcoming. Sorry in advance for the meeting over the Holidays.

CITY OF SAN RAFAEL COFFEE AND CODES MEETING IN JANUARY

Earlier this year, MAR was successful in working with the City of San Rafael on a new policy regarding its resale inspection guidelines. While this reform has been mostly successful, I’ve spoken at length with many of you who still are experiencing substantial challenges working with the City, mostly securing compliance on past unpermitted work.

To San Rafael’s credit, Paul Jensen, the Director of Community Development, has reached out to both myself and MAR CEO Fegley to see how things are going. We are planning for a follow up meeting before the Holidays, with an Association-wide meeting to be scheduled in January to put the City together with MAR’s membership to hear feedback and clarify its policy.

For those of you who have not reviewed the San Rafael Resale Inspection reform policy, you can review the document HERE.

MAR has just embarked on a similar effort with the City of Novato, and we are working to schedule our first meeting.

That’s it for now!

I wish you a safe and prosperous week.

Blaine Morris

2014 President

Upcoming “Call for Action” on RSVD Sewer Lateral Point of Sale Pressure Test

By | Marin Association of Realtors, Ross Valley Sanitary

Good day MAR Members!

I hope you all had a fun Halloween. Congratulations to our 2014 World Champion San Francisco Giants! What a series, what a week! MadBum fever all around. Now that the season and the parade is over, we can get back to the business of Marin Real Estate. I’m personally wondering what to do with all the “found time” I now won’t be scheduling my life around Giants viewing plans.

RVSD SEWER LATERAL POINT-OF-SALE UPDATE AND CALL TO ACTION

We continue to work to help the Ross Valley Sanitary District (RVSD) understand some of the issues that the REALTOR community has with its soon-to-be-rolled-out sewer lateral ordinance. It is currently scheduled to go into effect on January 1, which is less than two months away. In practice, the ordinance will have many similarities to the already-existing ordinances in Sausalito and Belvedere.

One big difference, and one that MAR has been opposing since the very first day we saw the ordinance, is the requirement for a “pressure test” on every sewer line, even before a camera goes down. Ross Valley Sanitary’s own engineers estimate that between 85-90% of the laterals will fail this pressure test. Several plumbers I’ve spoken with said every inspection would fail. If you fail the pressure test, the next step is a camera inspection…like we do now.

Why can’t we just have everyone do the camera inspection first? The reason the pressure test is so cumbersome is because the whole line needs to be “plugged”, including cleanouts…and buried cleanouts. How many times do you learn of a buried cleanout in the yard somewhere? Well, now, those will have to be “unburied” and plugged.

I’m also not sure why, in the middle of a drought, we will be wasting thousands and thousands of gallons of water on these tests.

The net is that this will go from a 30-minute meeting for the camera inspection to a 2-3 hour meeting for the pressure test. The best guess of cost I’m getting for these pressure tests is $600-1000. At 600+ sales per year in Ross Valley, this will cost the community $500,000 +/- to do these pressure tests…every year…

Money that could be spent fixing pipes. Think about it, after 4 years, ratepayers and citizens of the Ross Valley will have spent $2 million dollars on a frivolous test. How many thousands of feet of sewer line could that $2 million go towards? It’s a horrible waste of the public’s money.

I went and shared this rationale and math last month at the RVSD Board meeting. I got 3 minutes of “public time” to get through this. I suggested to them that we wanted to have some time at the next meeting on the agenda so we could all discuss this.

They did not put us on the agenda for the next meeting.

Remember, when the Board of Directors of Ross Valley Sanitary District originally passed this ordinance, they did not seek MAR’s input, nor the public’s input. They quietly put it on the agenda for the next meeting on a Friday, and voted on the ordinance the following Wednesday with zero input from stakeholders and the public.

We’ve been working with them ever since, to improve the ordinance. To its credit, RVSD has made some modifications to its ordinance based upon MAR’s recommendations. But they’ve steadfastly held on to this pressure test, and it’s pretty clear that they want to keep it. At least the staff does; I’m pretty sure the Board doesn’t really know what this whole pressure test business is all about.

So MAR is going to ask you, our members, to join the fight against this frivolous pressure test. MAR supports fixing our aging sewer infrastructure in a responsible manner. RVSD needs to do the same by being a good steward of the public’s money and remove the pressure test.

Tomorrow, MAR will be sending you a “call for action” to kick this off. It will be a simple “click here” type of email campaign to all the RVSD Board members.

I will keep you informed of the status of this effort. Thank you in advance for your participation in this very important campaign.

2014 GENERAL ELECTION

One of the most important responsibilities you have as a citizen and as a REALTOR is to go vote tomorrow, if you haven’t already. MAR and CAR have endorsed the following candidates and positions on Statewide and Countywide measures:

  • US Congress
    • Jared Huffman
  • State Assembly
    • Marc Levine
  • State Senate
    • Mike McGuire
  • Marin Hospital Board
    • Dr. Larry Bedard

Get to Know the Millennial Buyers and the CAR Panel Discussion on the Portal Wars

By | California Association of Realtors, Marin Association of Realtors

Good day MAR members!

Let’s Go Giants! Let’s Go Giants! Giants fever is so all-encompassing that when Heather and I attended a concert in the City on Friday night, midway through the concert during some banter by the band the whole Masonic Auditorium joined in a “Let’s Go Giants!” chat for about 30 seconds. It’s another amazing time to be a Giants fan!

Between biking, hiking, kids’ games and the ever-present backdrop of “Let’s Go Giants!”, we’re all enjoying another beautiful Indian Summer here in Marin. Looking at people bundled up in other parts of the country, I’m reminded how blessed we are to live and work here in Marin. Keep your Orange and Black Giants gear handy, and let’s settle into another terrific week of beautiful warm days and evenings of World Series baseball. Come to think of it, I’ll try to get some Kansas City BBQ on the grill this week too.

MORE FROM C.A.R. AND THE MILLENNIALS

Thank you for all your positive comments on last week’s Monday Memo. Lots of you were very happy to hear how much your Millennial children love their parents! I’ll touch on a few more random items on our new first-time-homebuyer generation:

-This is the first generation that you will have to “adapt” to. Otherwise you’ll be out of business down the road.

-We probably all know this, but they make decisions based upon recommendations from friends, and nothing remains “cutting edge” for long.

-From East Bay Gen-Y Sothebys broker Andrew Greenwell, who is a Millennial himself, 5 Rules for Communicating with Gen-Y:

Tell them to read the whole email…otherwise they just read the subject line

“The Pointier the Bullet the Better”…meaning, net out your bullet points for an easily distracted generation.

NEVER put critical instructions at the end of the email…Millennials won’t read it.

Group communication is important…why have a meeting or phone call when you can solve the world’s problems with a group email or text?

MOST IMPORTANT: Millennials don’t like phone calls. He seriously said that people of his generation find a phone call to be an invasion of privacy. Seriously.

Andrew also said that Millennials don’t have a “personal life” and a “work life”…just “one life”. He encouraged us to be transparent, because Millennials can sniff through a lack of transparency, it’s in their DNA. Also, because they love their parents so much, it’s very important to engage and appeal to “Mom and Dad” with a Millennial client…Mom and Dad will be involved every day.

Finally…Andrew suggested that we “Focus on their future, not your past…make me understand why this is important to me right now.” And: “Millennials wonder where YOU will fit into their life story.”

I couldn’t get over the feeling of a self-indulgent generation, but we need to get over that as they are the most important generation for our industry right now. C.A.R. is correctly dead-set on understanding and accommodating this important group of young buyers.

THE PORTAL WARS

At C.A.R., we collectively spent a LOT of time talking about Zillow/Trulia “Zulia” and Move/Realtor.com. The Strategic Planning Forum on Friday was a packed panel discussion with Zillow, Trulia, Move/Realtor.com…and one old-school broker for levity sake.

Prior to the panel discussion, at Wednesday’s Member/Director Forum, C.A.R. CEO Joel Singer had some comments about Zillow in general as a primer for Friday’s panel discussion:

-Zillow is now the market “opinion leader”

-Zillow claims 80 million unique users, if you can believe that.

-Zillow’s market cap is $4.3B. While staggering, this number is way down from the $7B they had right after the Trulia acquisition, and their market cap has been steadily dropping since the acquisition.

-Zillow needs to “get some profits” to justify this huge market cap.

-News Corp just acquired Move.com/Realtor.com. Joel compared Zillow’s $4.3B market cap with News Corp’s $73B market cap, and rhetorically asked which one has the bigger war chest going forward.

-The consumer has better info than we do. He showed some slides of Zillow/RedFin/Truila listing pages, and compared that data with what we see in our MLS. It was pretty comical.

But the Friday panel was the most illuminating. Zillow sent Curt Beardsley, their VP of Industry Development. Trulia sent Alon Chaver, its VP of Insustry Services. Realtor.com sent Russ Cofano, SVP of Industry Relations. And the old-school broker I mentioned was Tom Kuntz, VP of North America of brokerage Engel and Volkers.

I had heard the three portal guys several times earlier this year at various panel discussions at CAR, NAR and the Inman conference. My main takeaway was the same as it was earlier: they don’t want to share much. Yet, we keep packing these forums, looking for magic nuggets of info to glean.

Beardsley of Zillow said that Zillow’s focus has always been and will be on the consumer. He said they are an advertising-based media company. And he said that 50% of the interaction with Zillow is now via mobile.

Cofano of Realtor.com described its philosophy and mission as being “aligned with Realtors”. He identified that “there are a lot more online leads than buyers.” So true. Realtor.com does not believe in putting up valuations, and they also don’t believe in putting FSBO listings right next to your listings.

Chaver described Trulia as “being similar to Realtor.com”. No valuations (at least not anymore…probably thanks to Zillow buying them); No FSBOs. He claimed a Realtor-friendly approach, and proclaimed “we’ve transformed the customer experience and expectations over the past 8 years.”

Kuntz the broker was resigned to the changing environment of customer access to data. He correctly talked of the disconnect that “our industry has not yet delved into Big Data” like the Big 3 portals have. They know an awful lot about our customers. He also worries that “Realtor value is being replaced by Big Data.”

Then the banter began.

Beardsley said that Zillow is “central to the consumer” by adding in Big Data. Consumers typically search online for 12 weeks before they reach out to a real estate professional. We as an industry are not engaged yet at that time and the Big 3 are. People want a “general idea of values” during those 12 weeks, they don’t want to talk to a Realtor yet, and Zillow is addressing those needs with listings and Zestimates.

Cofano of Realtor.com then produced the zinger of the forum: Over the past 5-6 years, the number of licensed agents nationwide has stayed relatively static at 1M agents. Nationwide sales have stayed relatively static at 5M sales. But the number of online leads has zoomed up like a hockey stick. Monumental growth of online leads. Why so many more leads if the sales are remaining the same? What is the definition of an “online lead?” He said all that those leads are doing is creating more work for everyone.

And on it went, with everyone’s opinion about the general state of “online leads”. Joel Singer of CAR, who was moderating, asked the panel “Are leads becoming more valuable?” Beardsley of Zillow acknowledged the “huge growth of online leads”, but stuck with his contention that Zillow is a media company: “We don’t sell leads, we sell opportunities for you to be in front of your customers.”

Cofano of Realtor.com came back again with “leads are becoming less valuable”, and “leads cost the same whether they’re really good or crap”. He directly asked Beardsly of Zillow whether “online leads are becoming less valuable?” Beardsly stammered for a minute or two and didn’t answer the question. Cofano asked him again, and Beardsly finally relented that “yes, online leads are becoming less valuable” and that they need to fix that problem.

At that point, MAR President-Elect Matt Hughes, who was sitting across the room, summed it up best for me via a text he sent: “They are not creating leads. They are creating contact info of window shoppers.”

Amen to that.

The wise sage of the meeting, broker Tom Kuntz, told us that someone with way more money than Zillow is going to come in and change the playing field again in a way that we don’t know about yet. He talked about Napster and online music being a cute little unprofitable business until Apple and iTunes stepped in and effectively monetized it. Someone big, who we haven’t even thought of yet, will come in and make Zillow obsolete.

I’m not sure about that yet, but this sure is a fascinating conversation.

That’s it for now, next week I’ll share some of the action items we voted on at the CAR Board of Directors meetings.

I wish you a safe and prosperous week.

Blaine Morris

2014 President

CAR Update: Economic Forecast and the Impact of the Millennials

By | California Association of Realtors, Marin Association of Realtors, Marin Real Estate News

Good day MAR members!

It’s great to be back in Marin after a week across the street from the Happiest Place on Earth.  We could see Disneyland from our C.A.R. hotel and the Anaheim Convention Center, but things were so busy that looking from a distance was all we could do.  Perhaps that’s not so bad, after seeing all the bleary-eyed parents looking like the walking wounded returning from the park with their kids.

And:  LET’S GO GIANTS!!  Pretty huge cheers went up whenever one of the speakers said that at the meetings…which is surprising because there are way more people in SoCal…and our SoCal friends were licking their wounds after the Dodgers and Angels were dispatched from the playoffs last week.  There sure was a lot of Angels gear for sale in the gift shop of our hotel, but after observing for five days I didn’t see a single item leave the store.

SAFETY SAFETY SAFETY

By now, many of you probably saw the “Alert – Marin Agent Safety” we sent out last Saturday.  If you didn’t see it, you can check it out HERE.  The net is that there is allegedly a person posing as a REALTOR® going around to open houses looking for prescription drugs.  Police have advised members that unless he is actually caught stealing something there is nothing they can do.

One thing you can do is get a “Pill Pod” from the MAR store.  The Pill Pod is essentially a $20 plastic “safe” to store medication.  It’s not an indestructible device, but it is big enough that medication can’t be put in a pocket and walked out with.  It’s an inexpensive, effective deterrent.  For more info, you can just drop by the MAR store and check it out.

In the wake of the Beverly Carter murder in Arkansas, we need to keep a very watchful eye out for “copycat” assaults on agents.  This past Saturday, a 55-year-old female agent in Orange County was punched in the face at one of her listings: ARTICLE

This Wednesday morning at the Novato Tour Meeting, Officers Conrad and Doyle from the Novato Police Department will be attending to discuss agent safety and how the police can be of help.  They would also like feedback from the agent community.  The safety meeting starts at 9:00 and is held at the Novato Youth Center at 680 Wilson in Novato.

Be careful out there!

CAR FALL BUSINESS MEETINGS

As I mentioned, MAR’s CAR Director delegation spent last week in Anaheim at the Expo and Fall Business Meetings.  I’ll do my best to distill the most important info out of my 23 pages of notes I took…it will likely take me a couple of weeks to get through all of it.

Let me first get to the two numbers you need to know for your clients and prospects:  at the 2015 Economic Forecast by CAR Chief Economist Leslie Appleton-Young, she reported that CAR expects that California unit sales will go up by 5.8% in 2015, and that the median price will increase by 5.2%.  Keep those two numbers in mind, and you will be armed with the freshest data next time someone asks you about the market outlook.

Ahhh, but digging into those numbers is what will make you sound even smarter.  The most startling overall sentiment in Anaheim is how there is a perception of a market slowdown throughout California.  CAR was way off on its 2014 market projections.  Earlier this year, I reported that CAR was expecting total unit sales to INCREASE by 6%.  CAR now expects unit sales to DECREASE by 8.2% in 2014.  That’s quite a miss.  Also, they expected the median price to also go up by 6%, and they now expect that number to increase by 11.8%.

What’s also startling about this is that the 2014 unit and price projections were calculated with an expectation that interest rates would have materially risen with the end of QE, and they expected the rates to be well over 5% by now.  As we know the interest rates have been pretty flat for most of the year.

THE MILLENNIALS, OUR SLOWLY-EMERGING FIRST-TIME-BUYER GENERATION

This disconnect came up at a number of meetings I attended.  The finger kept getting pointed to our new first-time-buyers…the “Millennials”…or “Generation Y”.  More commonly known as “your kids”, and also identified as the largest generation in American history.  With the oldest of them in their early 30s, they’re not buying houses as quickly as previous generations.

Over the past year, starting at last October’s CAR meetings in Long Beach, much of the collective efforts  of CAR can be described as a psychology and sociology study of this generation.  Here are some interesting tidbits, in no particular order.

-Millennials are delaying getting married.  Marriage rates are plummeting.  Less marriages = less homes purchased.

-They’re still living at home.  And I kept hearing that they like their parents much more than we did.  That’s slowing these young adults from “growing up”.  I kept hearing that “90% of Gen Ys have a good relationship with their parents.”  And sit down for this one:  2/3 of adult children living with their parents are “satisfied with the arrangement.”  And you thought it was just you…  They didn’t share whether the parents felt the same way about this arrangement.

-People are simply moving less.  Why?  Kids like their parents better.

-Regarding the plummeting marriage rate, one interesting anecdote was shared by Richard Thornberg, one of CAR’s top economists:  In previous generations, more men went to college, and more men had degrees than women.  Today it’s just the opposite:  More women are going to college than men, and more women have degrees than men.  So what?  Mr. Thornberg offered the following demographic comment:  Better educated men are ok being in a relationship with less educated women, but better educated women are NOT ok being in a relationship with less educated men.  This is a demographic conundrum that won’t go away soon.

-Or, more simply put, Mr. Thornburg asked for the single women in the audience to raise their hands if they’re ok going on a date with an adult man living with his parents.  Not many hands went up.

-Our population in California is becoming more Latino and more Asian.  Latinos and Asians historically live with their parents longer.

-Given our recent housing debate in Marin, how about this:  78% of Millennials would prefer to not own a car and rather would like to walk to everything.

-Millennials want walkability.  Millennials actually ARE buying in downtown LA and downtown Oakland.  Walkability, nightlife and activity in general were cited as the reasons for this.  They don’t care about quality of schools, because none of them are having kids yet.

-As for the decrease in units, investors are not in the market as heavily, and “investors need to be replaced by first-time-buyers” and it’s not happening.

THE PUBLIC POLICY DEBATE ON HOUSING

On several occasions, CAR CEO Joel Singer described housing as “the Achilles Heel of California.”  We’re just not building enough new housing, as he said.  California has 13% of the population in the US, and only generates 8% of the building permits.  The population is still growing, but nothing is being built for them.  The need for reform of CEQA came up over and over again.  CEQA is the California Environment Quality Act, and it makes building difficult.

Plus, it seems that everywhere other than Marin, density is preferred and increasing.  That’s where the Millennials want to live.  So Sacramento is focusing on affordable rentals, not affordable housing for purchase.  Joel Singer said that in a recent conversation with the Speaker of the California Assembly Toni Atkins (who hails from Coastal San Diego County), when asked about housing affordability, she started talking about rental affordability.  She told Joel, “just wait until we’re a 50% renter society.”

So that’s where the public policy debate in Sacramento is focused:  rental affordability.

As for the affordability of housing for purchase, it’s become increasingly unaffordable in California.  At the height of the recession, Joel Singer described it as a “once in a generation buying opportunity”.  Those days are long gone.  The ability to purchase a median-priced home in California has fallen to 36% this year, compared to 60% for the US.  Joel called this “self-inflicted pain” because we’re not building.

I’ll leave it there for now.  There is so much more to report, I’ll pick it up next week.

I wish you a safe and prosperous week.

Blaine Morris

2014 MAR President