"Although the difference in monthly payment between a 4.5 percent interest rate and a 5.5 percent interest is not dramatic, your savings in interest paid over the life of the loan is significant," said Erin Lantz, director of Zillow Mortgage Marketplace. "Mortgage rates will likely rise to 5 percent by the end of 2014 due to an improving economy and policy changes by the Federal Reserve. By buying a house while interest rates are still incredibly low, you could end up saving more than $52,000 over the course of 30 years."
There are two key factors that will dictate the direction of the real estate market in the coming year: interest rates and inventory.
Countless economists have weighed in on where interest rates will go in 2014, and while they vary on the subtleties of their predictions, the vast majority agrees that interest rates will go up. The good news is, that even though interest rates will continue to inch higher, historically speaking, they will still remain relatively and remarkably low.
So how will rising interest rates impact our local market? Given that prices are so high (historically speaking and relative to the rest of the country), even modest increases in interest rates will impact the affordability equation for many buyers. But not all buyers. Many in this area are able to pay cash or finance only a small portion of the purchase price of their home. For this segment of the population, the impact of modest interest rate increases will be negligible. I anticipate we will see slightly diminished demand as interest rates rise in 2014, but we certainly aren’t going to see demand dry up altogether.
On the supply side of the equation, there is the question of whether or not we will see housing inventory return to normal levels in 2014. The biggest challenge facing buyers in 2013 was low inventory. Essentially, demand greatly outpaced supply. With prices in this area steadily increasing over the past several years, the question is: Are prices now high enough to push would-be sellers off the fence?
These “would-be sellers” are staying put for many reasons. For one, many homeowners re-financed at incredibly low rates, and now that interest rates are on the rise again, it’s difficult to walk away from those rates. Another reason is low property taxes. Many of these folks have owned their homes a long time and are not paying property taxes on the current market value, which would certainly change if they were to purchase a new home. And of course, capital gains tax is an oft cited reason for staying put. These are all economic deterrents for sellers, especially those who are looking to retire in the near future.
So the big question for the coming year is:
Are home prices finally high enough to balance supply and demand? Or are we in for yet another year of tight inventory, bidding wars and frustrated buyers?
Demand will be tempered by slightly higher interest rates and supply will loosen up as record prices knock more would-be sellers off of the fence. Though this will not be enough to tip the balance of power to a buyers market, especially in this economically thriving and highly desirable community we call Silicon Valley. Sellers will remain firmly in control though we will likely see more modest price gains in 2014 vs. 2013.
Before the holidays, I wrote about a new listing in Mountain View that caught my eye as "One to Watch". The 4 bedroom, 3.5 bathroom house on a quarter acre lot had last sold in 2005 for $1.335 million and was brought to the market last month with an asking price of $2.195 million. As I acknowledged in my earlier post, this is not an apples to apples comparison due to the minor improvements that had been made to the home, but I was still curious to see what this listing would tell us about the current state of the market. Here's what it had to say:
The property was listed on December 5th, went into contract on December 12th and closed on December 18th for (likely all-cash given the short closing) $2.408 million. That's $1,073,000 or an 80% jump in value. Not bad for an 8 year hold, especially considering the original purchase was very near the housing bubble peak.
Every now and then I come across a listing that tests and even potentially defines the market, and I'd like to start sharing those with you, Dear Reader.
First up: There's a new listing on Brookdale Avenue in Mountain View that has captured my attention. It's a 4 BR, 3.5 BA, 3385 sq ft home on a large 10,560 sq ft lot with excellent Mountain View Schools, listed at $2,195,000.
The main reason I find this listing so intriguing is because the last time it changed hands in 2005 it sold for $1,335,000. Now 2005 was not the absolute peak of the market, but I think we can all agree that it certainly was the heyday of the Housing Bubble.
Granted, some improvements have been made since then, including new roof and gutter system according to the listing. There is also new exterior paint/shutters, new flooring throughout the main level, painted cabinets, new countertops/backsplash and all new appliances in the kitchen and new french doors out to the backyard. And you may be wondering: how do I know this? Because even though only a facade photo was used in the MLS in 2005, the virtual tour is still live. Here are some side by sides:
So while this is not an apples to apples comparison by any means, appreciation of $860,000 (64%) from the near top of the housing boom to today, even with the (mostly cosmetic) improvements made, would be quite something. That's why this listing is One to Watch! Offers are due on Tuesday, 12/12, and I will have an update shortly after that.
Side note: If they do get near the asking price, let this also be a case for staging and professional photography. This property is very nicely presented this time around.
In a previous post, I mentioned that we were in the throes of a facade make-over for our recently purchased home in Mountain View, CA. When we broke ground on this project, many of our wonderful neighbors would stop by to chat and manage a very polite, "what's wrong with the way it is now?"
It's a fair comment because our house was flipped right before we purchased it. It had just been outfitted with new windows, doors, paint, roof and landscaping. So yes, everything was new, but unfortunately, the flippers made some cost-saving design decisions and aesthetic choices that made it challenging for us to feel "at home" in our new house. For example, from a distance the garage door appeared to be a Craftsman style wood door with rustic wrought iron hardware. Cute, right? But a closer look revealed it was actually a metal garage door painted to look like wood with cheap faux hardware and plastic dividers making the 4 window panes look like 12 smaller panes. And note the window above the garage door - which is actually not a window at all but a black piece of plastic outfitted with faux shutters to make it look like a window. I could go on, but I think you get the idea. Basically, good from far but far from good.
The goal of our project was to give the home a more modern look and to improve the quality of the finishes. Our designer, the amazingly talented Regan Baker, came up with a beautiful concept that included new paint, windows, front door, garage door and lighting:
Gorgeous, right? But my desire to scrap everything and start over was at odds with the obvious waste involved in doing so. Ultimately we decided to keep the existing windows and garage door to keep waste and happily, costs down. We donated the existing front door and replaced it with a laminated glass panel door to provide some much needed light to the entryway. And everything else, well - you just have to see for yourself:
We absolutely love the transformation and feel like this house is finally our home. And the neighbors have been so complimentary and appreciative of our efforts. It was a worthwhile investment as I'm sure we would see an ROI if we were to sell, but I'm much happier being able to come home to this beautiful house every single day and we will enjoy it for any years to come.
And FYI - here's what the house looked like before the flip. A dramatic transformation indeed!
A while back, I was approached by some buyers for an interview. They told me that they would be talking to approximately 6 agents before choosing one to work with. Now the average person may not know this, but it is very rare for a client to take up a formal interview process when looking for a real estate agent, so I was a bit surprised but happy to do so. Actually, I commended them for taking the time and effort to find an agent who would be a good fit for them. Upon meeting with them, they told me that not everyone had been so thrilled with having to be interviewed and, as a matter of fact, a couple of agents even bowed out. Surprised? I certainly was. That is, until I did some research.
According to a study by National Association of Realtors®, 66% of buyers and 65% of sellers speak to just one agent before selecting one to work with. ONE AGENT. That means that two-thirds of the time, people hire the first real estate agent they speak with. Shocked? Yeah, me too.
As a real estate agent striving every day to be exceptional at what I do, I must ask: Why is the bar so low for hiring a real estate agent? It would seem people are willing to put more effort into finding a good hair stylist than they are in finding a good real estate agent. Realizing this, it dawns on me that even the language we use to describe the process of working with an agent reflects this. "How did you find your agent?", is what we say. No one says, "How did you hire your agent?". But I think it's about time we did.
So whether you're in the market for your first-ever agent or even a new agent, here are some tips for hiring the best real estate agent for you:
1 ) Ask around. Just because your best friend's neighbor's sister had a great experience with her agent, doesn't necessarily mean they'll be the right fit for you, but it's a good place to start. Gather referrals from family, friends, and even neighbors and colleagues and after some quick online research, add the ones that rise to the top to your short list.
2) Visit open houses. In some areas, the agent hosting the open house isn't necessarily the listing agent. Those agents are there to work with buyers, which means they are actively engaged in the market and eager to work with you. You also have the added bonus of a brief in-person encounter to see if you click. And if you don't, certainly be polite, but you have every right to move on and keep looking.
3) Find a local expert. There is so much information available these days thanks to the internet and I say, use it! Keep an eye on listings and closings in your immediate search area and see if there are one or two stand-out agents representing buyers and/or sellers in that area. And if you can do a little further digging and find an agent that lives in your search area, definitely add them to your short list.
4) Don't use the I-word. Now that you have a short list, it's time to interview the candidates. But here's the thing: don't actually use the word, "interview". Given that only 1 in 3 real estate agents hired are actually subjected to an interview process, the word "interview" might put some agents off (as demonstrated above). So instead, ask them to meet to "discuss their process".
5) Key questions.
- Ask how they prefer to work with buyers/sellers. Technology and therefore access to information have blurred the line as far as how and who keeps an eye on new listings. Whether you prefer to do that legwork or you expect your agent to do it all, it's critical to set that expectation upfront.
- Ask how they communicate with clients. Again, technology has proliferated our communication options, so if you're fond of a certain means of communication, it's critical that you ensure your real estate agent is willing and able to utilize it.
- Ask about the extent of their knowledge of the area you're looking in.
- Ask how many clients they work with at any given time. This will give you some insight into their availability. It's a difficult balance - you want an experienced agent, but not one that is so busy that you'll be talking to their assistant more than them.
- Finally, use the time to get to know them personally. You don't have to be BFF's with your real estate agent, but finding someone who shares your values and who you like spending time with can only help in what can be a complicated and sometimes tense process.
If you had an experience with finding or working with an agent that others can learn from, please share in the comments below. Thanks in advance!
It has been entirely too long since I posted, but I have been very busy with two exciting projects: redesigning my personal brand and remodeling the facade of my house.
If you are reading this blog post and you have been to my website before, you will notice many new changes, including a new page design, new headshot and my very own personal logo:
My website design, headshot and logo design are all the brilliant work of Melanie Barti over at Likewise Brand Co.. She is also designing some ads and collateral pieces for me that I can't wait to roll out!
As for remodeling the facade of my home, Regan Baker of Regan Baker Design has once again astounded me with her creativity and amazing style. It is still a work in process and I'm wont to share any pictures before the big reveal, but here's the before picture:
And here's the concept we decided to move forward with:
Next, we will be planting our Fall/Winter garden, which I'm very happy to say will include brussels sprouts! And sometime in the very near future we will be adding some citrus trees to our backyard farm. I'll update again when everything is in. Until then, happy farming!
Silicon Valley is a pretty savvy real estate market and most sellers are well aware of the advantages of staging a property before sale. But for those few of you who are not completely convinced (or for those of you who just love a good before and after), here are some before and after pictures from a recent listing of mine that might knock you off that fence.
(Staging credit: Shiri Weinstein, owner of Shirful Designs)
When I first started this blog, I anticipated there would be many posts about being a parent, since it is such a huge and wonderful part of my life. But six months into this endeavor and nary a single word on the subject has crossed this keyboard. And I've come to realize the reason: There are many things in life that I naturally excel at. That I've developed some sense of mastery or expertise in and even feel that I can provide guidance or advice to others. Parenting is not one of them.
But what I have become quite the expert at is simplifying other parts of my life in order to make the challenging task of parenting easier. For example: Cooking. Before I became a Mom, I looooved to cook. And the longer the recipe, the more complicated the technique, the more obscure the ingredients, the better! I scoffed at people who shied away from complex cooking, who purchased convenience items like pre-chopped vegetables, and who referred to cookbooks with the words "30-minutes" and "easy" in the titles. And just like most judgements I made before I was myself a parent, boy was I wrong.
Since becoming a Mom I have purchased almost every cookbook promising "easy", "30-minute", "weeknight", "simple", "5-ingredient" meals, with varying degrees of disappointment. One book clearly never timed the recipes, because they always took me well over an hour to make. One book made the assumption that if you want to cook quickly, you must also not like food very much because everything in it was bland and boring. Another book obviously never tested their recipes because they always came out just wrong. But thankfully, there was one bright spot in the bunch:
This book provides a variety of recipes using a wide range of ingredients. You will not be bored! Also, the recipes are simplified with a high standard for the quality of the food. In other words, instead of throwing in cans of condensed soup into a recipe (with all due respect to the 1950's, gag!), you're buying a pre-roasted chicken from the grocery store to save time. And the recipes really do take only 30-45 mins, depending on your organization and knife skills. The well worn pages of my copy clearly speak to my love for this book, and I think any fellow lapsed foodie with young children will agree.
2013 may go down as one of the hottest years on record - and I'm not talking about climate change. Of course, I'm talking about the real estate market. Even if you haven't been in the game this year, I'm sure you've heard it in the news. Just last night, ABC 7 News ran a story predicting another housing bubble (*gasp* The B-word!).
Another news story out yesterday from Bloomberg Business has a less sensational outlook on the housing market, predicting continued double-digit price gains through the remainder of 2013, with more modest single-digit gains in 2014.
From what I'm observing here in Silicon Valley, I tend to agree with the Bloomberg story that the second half of 2013 will likely be as hot as the first half, even during these normally "cool" summer months. And I also agree with the ABC 7 story, in that the price increases of the past 18 months are unsustainable long-term. But as the Bloomberg story points out, rising interest rates will serve to temper buyer enthusiasm. And I believe that sellers who have been waiting for the peak will rush their homes to market, which will *finally* bring inventory levels up and reduce competition.
And as for the B-word? The only thing that will be bursting in 2014 is the media's housing market hype bubble. This normalizing of supply and demand will simply bring us back to sustainable home value increases. You read it here first.
In today's competitive seller's market, it can be very challenging to be a buyer. So I would like to take a moment to acknowledge and congratulate my very sweet and happy clients, the Kavanaughs, on their new home in Burlingame!
Just got back from a very fun and far-too-short visit to NYC, and perhaps it was just because I had just written my blog post Brass is Back, but I feel like I saw brass everywhere I looked! So what do you naysayers think - still skeptical?
As a real estate agent, I have the pleasure of regularly touring beautifully decorated and/or freshly staged homes. And as a fanatic and student of interior design, I regularly peruse design magazines, blogs and websites. While I always enjoy and am occasionally impressed by the creative things I see, very few things stop me in my tracks like this picture on Houzz did:
Here is this elegant, modern design using brass fixtures. And even more surprising to me: I really like it. I really, really like it. After years of dominance of brushed stainless steel in modern and contemporary design, here is something totally unexpected and refreshing. It was a difficult pill for me to swallow, because for almost as long as I can remember, brass fixtures have been synonymous with painfully dated design.
But this new generation of brass fixtures and design elements are not overly polished or plastic-y in appearance. They are more subdued and warm and bring a sense of history even to a newly created space. Here are some more wonderful examples I found on Houzz:
It will be interesting to see how long and how far this trend will go. Many in the design world have been predicting the decline in popularity of stainless steel appliances in the kitchen. Will brass make it all the way to appliance status? Only time will tell.
When I first came across this blog post about the 10 Most Exciting Cities in America, I was skeptical. Of course the usual players were there (San Francisco, New York, etc) and a couple of my personal favorites were represented (Portland and Boston). But I was shocked to read the #1 spot went to Oakland. Really? I like Oakland and I have a lot of friends who live there and love it and I know they have a blossoming foodie scene going on, but the most exciting city in America?
But then I read the criteria they used and it all made much more sense. And it also challenged my thinking a bit on what makes a city truly exciting. Here is the criteria they used:
- Park acreage per person
- Percent of population between 20 and 34 years old
- Fast food restaurants per square mile (the fewer the better)
- Bars per square mile
- Big box stores per square mile (the fewer the better)
- Population diversity
- Movie theaters per square mile
- Museums per square mile
- Theater companies per square mile
- Music venues per square mile
What do you think makes a city exciting?
For years my husband and I have been horrified by the amount of the junk mail that we receive. Especially on those all to frequent days when we would retrieve the mail from the mailbox only to dump the entire contents into the recycling bin. We cursed the United States Postal Service (USPS) and numerous marketers for the constant deluge and the blatant disregard for the environment.
All the while we felt powerless to do anything about it. Until one day as I was listening to Forum on NPR and in a discussion about the cuts to Saturday Postal Service, a USPS spokesperson dismissed a caller who voiced my exact concern about junk mail by saying there were means of stopping unwanted junk mail. "Really??" I thought, and immediately started to look into it.
While I was not able to find anything sponsored by the USPS to control or end junk mail, I did find a helpful story from CBS News that ultimately led me to the answer - CatalogChoice.org! It takes a little bit of a commitment on your part to set aside each piece of junk mail and register each offending marketer in order to put a stop to it, but it is soooooo worth it. You might even feel empowered and get some well-deserved satisfaction from the process: "Take that Frontgate! I would never, ever order anything from you anyway!" Or maybe that's just me :)
If you're like me, there are many things about your home that you love. But likewise, there are probably certain things about your home you are dissatisfied with. Perhaps your home was remodeled to someone else's taste before you took ownership. Or perhaps it is in dire need of remodeling and you don't have the time or the money (or both!) to do so. Or perhaps you remodeled it years ago and your tastes have since changed. Whatever the case may be, you probably live with the dissatisfaction like you would a housefly: trying to ignore it but no matter which way you turn there it is buzzing in your ear.
With all of the home improvement/remodeling shows out there these days, we get the impression that you have to knock down walls or take a room down to the studs in order to improve it. But that is simply not the case. I can't tell you how many people who after seeing their home staged for sale kick themselves for not making those simple changes sooner so they could have enjoyed the improvements themselves while they still lived there.
Here are some simple improvements that most stagers make to prep a home for sale, that you can do to get more enjoyment out of your home TODAY.
1. Paint (with professional input)
Paint is an easy and relatively inexpensive way to refresh any space in your home (duh), but here's my twist on this home improvement gimme: enlist the services of a color consultant or interior designer to help you select the colors. Because the only thing worse than living with an outdated wall color is spending your precious time, energy and money to end up with a color you hate even more. And if you can't afford the professional advice and still want that updated look, Benjamin Moore has some guidance for you (click on picture to go to article):
2. Update light fixtures
This easy upgrade is an opportunity often overlooked by homeowners but seldom missed by stagers. Perhaps homeowners view it as an intimidating or expensive undertaking because it requires the services of an electrician. But I assure you, the payoff is huge and the cost is a lot more reasonable than you may think. And I urge you to think beyond just updating the chandelier in your dining room - the foyer, bathroom sconces, bedroom flush mounts, stairway pendants and even outdoor fixtures are all very visible areas worth investing in. And thanks to the internet age, we have access to fixtures that satisfy every design style at just about every price point. Here are a couple I have used:
3. Update plumbing fixtures
I had a recent experience with this which is why it made the list. We purchased our current home after it had been completely remodeled to someone else's taste. I really couldn't justify making any changes because everything was new and in working order. That is, until the plastic spray button on the kitchen faucet broke off and I finally had a chance to put my mark on our kitchen - woo-hoo! And what a wonderful difference it made. Not only is it an aesthetic improvement, making the space feel more modern and to our taste, but the faucet actually functions better too. The nozzle is higher up, making more room for large dishes, has a greater radius, making more of the sink more usable, and the water pressure has actually improved. My husband and I can personally attest - this small change has made us like our kitchen so much more! Here is the faucet I chose (click on image to go to retailers website):
4. New house numbers
Another easy but often overlooked upgrade - get new house numbers! I've even seen homes that have been lovingly remodeled and painted inside and out, with dingy and outdated house numbers. Here are a couple of great sources:
If you're reading this blog, chances are you live in or around San Francisco. And whether you have lived here less than a year or over 50 years, I can guarantee you have never seen San Francisco quite like this before. Enjoy.
If you live in a house that has undergone a kitchen remodel in the last 10-15 years, chances are you have granite countertops. I have granite countertops. 90+% of the homes I see on the market have granite countertops. As interior design trends go, granite countertops have become as ubiquitous as pastel tiles were in the 1950s.
Since about the mid-1990s granite has been wildly popular and for a number of good reasons. It is durable (when properly sealed and maintained), comes in a variety of colors and offers that solid surface functionality we all love (especially after the tiled countertops that were popular in the 1980s). But if you're planning a remodel in the near future, I encourage you to look at solid-surface countertop options beyond granite. Because after almost 20 years of popularity, even the design community has concluded that "granite has been dethroned" which means that having granite countertops in your kitchen may soon look as current as pastel pink tile in your bathroom.
Here are some beautiful alternatives for your consideration:
I can personally attest to the beauty and durability of soapstone since we used it when we remodeled our house in San Francisco (credit to our interior designer, Regan Baker). It is stain resistant, heat tolerant and IMHO, looks best when honed (vs. polished). Soapstone is a little soft, but scratches can be buffed out with a fine grit sandpaper.
Most commonly known by the brand name Caesarstone (and I've even heard them referred to as "cultured stone") quartz composite countertops offer the look and color variety of of stone countertops with near bullet-proof durability and zero maintenance (no sealing required!). They are most frequently used in modern design, but they come in such an array of colors and stone-like patterns that I predict we'll start seeing them in all types of design schemes in the near future. And as an added bonus, quartz composite is more environmentally friendly than natural stone!
Not a fan of design trends and don't want to risk having your kitchen look outdated in 10 years? Butcher block is a classic look that's sure to never go out of style. It can be used in both traditional (picture below) and modern (see above shelves by John Boos from my SF kitchen) design. And apart from regularly oiling them with food-grade mineral oil, they are pretty low-maintenance. But remember - just because you have butcher block countertops doesn't mean you can use knives on them! Treat them like any other countertop surface and use a cutting board.
If you're into the weathered/rustic look, using salvaged stone or wood for countertops is not only green, it's also a great way to add character to a space. Remodeling can sometimes lead to space looking too slick (like perfectly white sneakers or pair of Frye boots that haven't been broken in yet) and the inclusion of reclaimed elements can temper that and really give a space a sense of life and history.
Thinking about the environment and the effects of global climate change and the potential challenges our children and grandchildren may face in the future because of our actions (or inactions) can be hyperventilation-inducing-ly overwhelming. Downright daunting, isn't it? To think of this giant planet and the billions of people on it and now with over 1 billion cars and what can little ol' me do to change all of that?
But like any big problem worth tackling, the key is to start somewhere, right? So here are 4 simple things we can all do to reduce our carbon footprint starting today and with very little effort:
1. BYOC (Bring Your Own Cup)
Whether it's a travel mug for coffee or a sports bottle for water, bringing your own cup with you is a very easy way to reduce paper and plastic waste. The trick with this is to find ones that work well so that you're even more motivated to use them. Here are a couple that I really like:
2. Take Back the Tap
This is simply taking BYOC one step further and giving up bottled water all-together. Restaurants in San Francisco have led the charge by no longer offering bottled water and instead simply filtering (and in some cases, carbonating) the exceptional tap water they have at their disposal. There is a common misconception that when you recycle the bottle the water came in, it absolves you of your carbon sin. Not so. The energy used to package and ship individual servings of water cannot be offset by recycling alone. Bottled water is really one of the more egregious environmental sins but luckily it's an easy one to remedy and it will even save you money in the process.
3. Turn Off the Lights
Who knew it? All of our fathers who were constantly reminding us to, "Turn off the lights when you leave the room" were early environmentalists. It seems like such a simple thing, but one we could all use reminding of (even when good ol' Dad isn't around). Lighting a home accounts for 12% of home energy usage. No data could be found to determine how much of that is for lighting empty rooms, but if your house is anything like mine, I'm betting it's more than it should be.
The average American eats out 4-5 times per week, but "eats out" simply means they are buying food from a restaurant, not necessarily dining inside of a restaurant. So many of those meals are taken "to go", which means there is a lot of packaging - boxes, bags, paper cups, plastic utensils, etc. - being used. Being an obsessive multi-tasker, this is a tough one for me, but I'm trying to eat lunch in the restaurant (gasp!) more often to reduce this waste. And a happy side-effect is that it forces me to slow down and actually take a break from work every now and then.
It's easy to think, "These are such small things in the face of such a big problem", but if everyone made these (or similar) small changes it can add up to a big difference. Plus, it's a start. And if we all start thinking about how our small, everyday decisions impact the big picture, we will continue to find more ways to reduce waste, minimize our carbon footprint and live more sustainably.