🏡 Insider Report - Wed, Dec 15
'Nice' and 'naughty' list of things to watch out for while buying a home
The declining trend in home listing continues with only 2 homes listed in the past day, compared to 7 new homes at the same time last week, and 14 homes the week before. In fact, there were only 58 new homes listed in the last three days. This is for the most part, due to the seasonality.
Home prices for most counties are on the rise, with the exception of Napa and Contra Costa counties.
Price drops (717 today in the Bay):
110 price drops in Contra Costa County, 192 in San Francisco, 148 in Alameda County, and others.
Last week in the Bay Area:
Most expensive home listed: 615 Sausalito Boulevard, Sausalito for $8,650,000
Cheapest home listed: 100 Diana Way, Antioch for $75,000
Oldest home listed: 11051 Canyon Drive, San Jose built in 1890
Home with the most beds: 132 South 13th Street, San Jose with 10 bedrooms
Home with the most baths: 1105 Hedgeside Avenue, Napa with 5.5 bathrooms
😍 Sandra Bullock lists Los Angeles condo for sale
With sweeping views of the Los Angeles skyline and the Pacific Ocean, the 'strangest, sexiest' condo in LA, Sierra Towers is one for the books. Home to the crème de la crème of Hollywood, condos in the building are hardly ever listed for sale. But when a certain Ms. Congeniality lists her exquisitely redesigned condo on the market, you have to take a look.
9255 Doheny Road #2206, West Hollywood is on the market for $4,495,000...
Highlights: 1700+ sq.ft. unit with 2 bedrooms and 2.5 bathrooms, central open kitchen with bespoke cabinetry, living room with floor-to-ceiling glass walls that open into an expansive terrace with stunning views, bedrooms with glass sliders that open onto the terrace, and custom-built renovations.
Prior to Sandra Bullock, the 22nd-floor condo was occupied by 'Friends' star Mathew Perry and was reportedly bought for $3.6 million in 2014. Multiple upgrades later, the condo is now on the market for a whopping $4.5 million. The building also houses other Hollywood royalty like Adam Sandler, Kelly Osbourne, and Courtney Cox, and was earlier home to celebrities like Elton John and Lindsay Lohan.
Check out the complete listing here.
2022 housing forecast and 6 things that could wreck this
Prominent 2022 forecasts for mortgage rates, housing price gains, and the unemployment rate are approximately 3.3% - 3.7%, 5.1% - 7.4%, and 3.8%-3.9%, respectively.
This is essentially a housing market performing slightly above trend, helped by continued low-interest rates, with an economy at full employment minus some structural friction. Although this feels like a reasonable forecast if the economy can avoid any major surprises in 2022, let’s explore what can go wrong in 2022 that could wreck this picture.
"If You Aim at Nothing, You Hit Nothing" - Advice given to Katy in Shang-Chi and the Legend of the Ten Rings
The Fed is focused on fighting inflation. The White House is considering a new banking regulator who tightened mortgage underwriting as head of the CFPB. If the most powerful authorities are not explicitly aiming for a stable housing market, how they will hit it?
"Just Try To Make It Sound Like You Wrote It That Way on Purpose" - Motto of a literary lion in The French Dispatch
This would be my advice to the Fed on how to deal with all of the criticism surrounding the use of the word “Transitory.” Whatever happens, just say, “that’s what we meant by transitory.” On the other hand, the Fed may feel like they have to make up for some lost credibility. Shouldn’t a credible Fed be signaled by low asset price volatility, rather than high asset price volatility? Asset prices volatility has skyrocketed every time the topic of tightening has come up, and a Fed focused on regaining credibility could spur frequent panics in 2022.
"You’ve Always Been A Plopper" - Larry accuses Suzie of perfunctory plopping in Curb Your Enthusiasm
Another way of saying, beware the law of unintended consequences. Whose bingo card had skyrocketing used car prices as a result of pandemic shutdowns? Central planners are big ploppers, staining our beautiful free market couches every time they join the party. Rent control, moratoriums, environmental regulations, bank regulation, healthcare mandates, travel restrictions, tariffs, foreign buyer restrictions….all a source of potential disruption in 2022.
"I’ve Been Hearing This Sound Everywhere I Go… Like a Tick, Tick, Tick" - Jonathan Larson senses something explosive in tick, tick… Boom!
I’ve been hearing a sound too…it’s the sound of billions of dollars of i-buying, power-buying, and e-buying power coming together creating explosive price moves in the hottest markets. More liquidity in the real estate market is overall a good thing, and prices will eventually adjust to the new norm in liquidity. But what does it sound like when i-buyers suddenly stop clicking the buy button en-masse? High frequency traders have shown a tendency to step back from the stock market during certain periods, leading to flash crashes and extreme volatility; will we see the real estate equivalent in 2022?
"I Want My Dollar Back" - Larry asking for a refund, the lemonade is prettay, prettay not good.
The U.S. Dollar Index dipped below 90 briefly in the past 12 months but is currently off its lows and in line with the 3-yr average. As a reminder, this is a measure of US consumers’ and businesses’ purchasing power measured against other major countries, and it confirms US inflation is not an isolated experience, it is being shared worldwide. However, if we measure our dollars another way, such as, how many square feet of real estate in Austin our earned dollars can buy, then many folks are wishing they had their old dollars back, the ones that bought a house 30 minutes from downtown, not 90 minutes. Expect consumers to continue lamenting wage growth not keeping up with the cost of quality of life necessities, despite a stable US currency.
"It Woke Me Up From My Sleep And I Don’t Like It" - Tetchy British lady can’t stand the noise pollution from one of the most iconic performances in rock history in The Beatles: Get Back.
Here is where we compare todays’ retail traders to rock fans taking on the establishment. Institutional investors and regulators have been awakened by surging interest and prices for assets that seem to defy fundamental logic. "This isn’t a casino," say the likes of Buffet and Clayton; ‘shouldn’t you be in the recording studio instead’, ask the police called to stop the raucous rooftop concert. The battle between global authorities and the crowd of 24/7 crypto and stock traders could send shockwaves through markets in 2022. Markets are more interconnected than ever before and volatility in one area has a tendency to spill over into others; over the last few years, “real assets” such as residential housing have tended to be spared from these effects; but if the solution to crypto and meme stock speculation is believed to surprise interest rate increases, that could change.
🎅🏼 Nice and Naughty List for Homes
With another year of many of us staying home more than we expected to, many of us have been thinking more and more about what we want to change about our current homes, or even what we would want in a new one.
Just like Santa Claus, our data and home management team have come up with "nice" and "naughty" lists of things to look out for when shopping for a new home.
Below are our “Nice” and “Naughty” lists of things to watch for in listings when shopping for homes:
The Nice List
Growing home value: For most American families, home equity is the largest source of wealth, and equity in homes has increased at increasing rates throughout the last few years. This means a "nice" home would include one that is comparable to most homes in an area that has seen rising home prices, a useful (though not perfect) proxy for overall home value. Fortunately, listing pages on ZeroDown for certain housing markets include information on home prices over the last three years.
Recently remodeled kitchen or bathroom: The kitchen and the bathroom are two of the highest traffic rooms in our homes (especially with the amount of time people are spending at home these days) so renovations to these spaces have a significant comfort value and comparatively high return on value.
New furnace/water heater: Most furnaces and water heaters only last about 10 -15 years before it starts making sense to consider replacements. A home with a recently replaced furnace and water heater will spare you the trouble of finding you have no hot water and a non-functioning HVAC system during a cold winter morning.
A reasonably quiet neighborhood: Your mileage may vary, but many would agree that living next to an airport, or on the side of a freeway would be loud and disruptive. living in an area where you don't have to mute your Zoom meeting because the 11:15 train just passed through down the block is pretty "nice" if you ask us. As luck would have it, listings on ZeroDown include information from the DoT on noise levels.
“Permitted" mentioned in the listing description: Confirmation that major improvements (such as additions and ADUs) were done with permits and approved is a gift of peace of mind. New roofProtect against leaks during the rainy winter months, and enjoy silent, quiet nights unburdened with worry about needing to worry about a roof replacement for at least a couple of decades.
New windows: A single new window can cost $1,000, so if your home has all new windows it can save you tens of thousands of dollars. Dual-paned windows in your home can help with monthly energy savings, temperature control in your home as well as lessen street noise.
Good cell coverage: As anyone who has ever had to make a long road trip knows, there is nothing worse than having to spend long periods of time in an area with poor or shoddy cellphone coverage. This is why it's a "nice" thing to know you have good cellular coverage as well as multiple options. ZeroDown includes cell phone coverage data for a listing's geographic area to help make sure you don't drop your calls.
Recently painted: A new coat of paint not only prepares a home for a new owner with a nice refresh, but it also helps protect the bones of the house from weather and termites.
Solar panels: Having solar panels (especially if they are owned, rather than still rented) not only reduces energy costs (or even earns if you are able to sell back to the grid), but also helps reduce greenhouse gas emissions - which is nice for everyone, including mother nature!
Electric vehicle charging points nearby: Expanded EV charging infrastructure may have been part of the recently-passed bill, but it will take some time before we will see that on our streets and roads. The good thing for those of you who have or are considering an EV, ZeroDown displays information on EV-charging points around a listing.
The naughty list...
Missing information: If a listing is not a multi-family unit or a Tenancy-in-common and is missing square footage or even the number of bedrooms or bathrooms - that’s a red flag that there are potentially un-permitted spaces and work done on the property.
“Buyer to verify” in the listing description: Phrasing in the listing description (rather than disclosures) that a buyer should check on things themselves (usually in relation to permitting) is a warning sign that there’s possibly some sort of catch. Make sure you get solid, official information on a home and lot's square footage, whether the home is served by the school district you want, and if there is some unpermitted work that you might need to resolve down the line.
Oddly low pricing: If only every seller used transparent pricing, a lot of time, effort, and heartbreak could be saved; sadly, a too-good-to-be-true price is just that, used to draw interest. Alternatively, it could be a sign of a home that "has good bones" (but a terrible body!) and "just needs work" (a lot of it!).
Discrepancies: If the public records say a home has 3 beds and 2 baths, but the listing says it’s a 4/3, or they mention a new addition but the permit records have no mentions, you’ll want to investigate.
“Lived in” or “Well-loved” in the listing description: The nicest way of saying that the home is likely not updated (cosmetically or otherwise). Prepare to do some extra diligence when considering a home that uses these phrases.
“TLC” or “Great Opportunity” in the listing description: A nice way of saying the home needs work. Could be merely cosmetic or major work, so it would be best to get inspections if they don’t already have them. “Great Opportunity” could mean that you might be able to make a profit by fixing and flipping - so we guess this could be naughty or nice, depending on your view.
“Low maintenance yard”: Sometimes this is a nice way of saying the yard needs work because there’s been little to no maintenance, to begin with.
GET IN TOUCH
Have a Great Day
Want to talk to someone about data on homes or have suggestions for this email? Great, our data science team is starved for human contact. Ping us at firstname.lastname@example.org.
Want to actually (physically) go see some homes? There’s a novel idea! Ping us at email@example.com if you want to talk to an agent.