Zillow and Current Market Value

The anomaly within the Zillow amounts within this particular neighborhood not gaining value, relative to other surrounding neighborhoods, is surprising.  As an overview for the longest time Zillow was very frustrating in Santa Cruz.  Being a county built up over 10 decades, we have homes of widely varying degrees of care and maintenance.  A 1940’s bungalow, ignored for 70 years, is worth far less than a 1940’s bungalow remade to its true origins.  Zillow can’t recognize that difference, even if it’s door to door.  Another easy to see example is a restored Craftsman home next to a 1965 ranch home that was built as the UC arrived.  One is made from carefully chosen materials, the other from low cost materials.

Zillow is excellent at looking at towns and cities that were built as developments, each street with a specific builder built during a short time span.  Then you can see the selling prices as true comparable sales to your like-kind home.  The differences would be minor; a new hardwood floor, or a remodeled bathroom.  Here it’s 20-30 years of care, or 20-30 years of neglect.  With student rentals on nearly every street in town there will always be a house or two less cared-for, and that pulls down the comparable sales numbers.  In the past 10 years we have seen gentrification of most Westside neighborhoods, and many of the houses that were rentals have been bought by a new generation of professionals who have worked on their homes.  Zillow has gotten better here lately, and we are not sure why.  They seem to be closer with trends in our markets than they were when they first came on the scene.  But they will always be less effective a measure in a diverse place like Santa Cruz, and I count us lucky for that, though I understand it makes it confusing.

If you are interested in selling, be sure to call me.  It would be great to talk over the phone, or to meet you in person to discuss your real estate plans.

Posted on June 5, 2019 at 10:22 pm
David Morrell | Posted in Uncategorized |

It’s Summer! What do you tell perspective sellers as to why this is the best time of year to sell their home?

Your buyers are out looking in the summer. For them, being free from many of their time constraints, coupled with long days of sunlight, favors an easier search process. They know they can ask their Realtor to show them homes anytime between 6:00 a.m and 8:30 p.m and they will be ready to have you in their car to tour the county. Of course if you choose a 6:00 a.m. start time you may have to begin by visiting vacant homes, but by 8:00 a.m. the most motivated sellers will gladly swing open their doors and take a walk with their cup ‘o tea. The most important factor in selling your home is getting buyers on your property as conveniently for them as is possible for you.

The number of houses listed for sale increases in the summer, but so does the pool of buyers. Second home buyers are here for longer than the usual weekend vacations; relocation buyers are needing to close escrow before school starts or before a new job gets busiest; and, the University of California’s new faculty and new staff are here looking to get settled before the beginning of the fall quarter, which starts in mid-September here. The UC has increased enrollment and is now hiring again, after implementing a hiring freeze in many departments while battling poor economic times. That constraint has been lifted for the most part, so a backlog of need is getting filled. Those are just short list of examples of the many types of well qualified buyers looking for a special place like yours.

Summer is a time for people to re-group. If buyers are changing their lives by purchasing a home, whether they are moving from far away or just moving cross county, summer is the more open and less stressful time for them to look and to find. The many demands of spring; taxes, schools, project deadlines, product launches, and the day to day shuttling of children (if applicable) has passed and stress and blood pressure readings are reduced to a more normal state. Summer camps keep part of the family entertained allowing your buyers the freedom to see your home in the middle of the day as well as in the evening. It is no small matter that on weekdays after work hours are filled with sunlight. There is enough time for a buyer to relax before going to an appointment to see a house.

Especially in California, decks and patios add livable space to the square footage of your home. Showing off the flow from inside to outside is easier in the summer. For about 250 days a year (the outstanding weather in Santa Cruz) that outdoor space is integral to how you occupy your property. Being able to show your outdoor spaces off on a beautiful long summer day is an advantage to a seller.

For sellers, most obviously, buyers are the key. When demand is at its highest, and you are ready, able, and willing to stage your home to show off all of its qualities (with the help of your agent, naturally, or just leave it all to him or her), then this is the time of year to be on the market. If you are an investor this is a period you might be in-between tenants. If you are able to leave the house vacant it will sell in its current condition with the caveat that you may want to paint. Your property will also sell with tenants intact; the market is that hot for sellers. Dozens of both home buyers with the intent to occupy, as well as buyers looking for income property, are looking at your house. Remember to wash your windows so your garden, your patio, your decking, and the yard views from your kitchen, your dining room, your bedrooms, your office, your living room, and your family room can be seen at their best. Plus, your flowers are in bloom! Everyone knows that the bloom on a rose makes one swoon.

What changes has Santa Cruz County seen in the second home market?

Santa Cruz County has been built up over twelve decades. The decades 1960’s and 1970’s saw a surge of activity in the second home market in the 1960’s and 1970’s.  As UC Santa Cruz grew from 5000 students at its inception 52 years ago to its current enrollment of nearly 18,000, many of the homes have been bought by permanent residents. Staff and faculty positions have more than doubled. However, those buyers are finding they are now competing with the newly rich and the later in life rich second home buyers who are able to pay all cash and can bid up on a property they want.  Money is less important than winning.  The first group of the newly rich are tech workers who already own in Silicon Valley and have enough money for a retreat at the ocean.  They have enough flexibility in their jobs to work from here and there, and they have the disposable income to buy.  They are also extremely busy, so they pick and buy quickly. The later-in-life rich are bringing a significant inheritance to buy a home at the ocean.  The parents of the generation born between the two world wars are dying.  They were a saver generation, and investments increased those savings ahead of inflation.  The heirs are seeing their savings increase to levels that allow them to buy the ocean retreat.  The inland empire second home buyer is still here too.  They want an ocean-side home to escape the summer heat, and though we are less affordable now than when they bought in droves 20-40 years ago, Santa Cruz County is still a destination point.

Empirical evidence of our second home market can be gathered by walking the streets of the coastal corridor.  Homes are shuttered for much of the time, and then they occasionally come alive. A particular street is a mix of permanent residents, rental investments, and second home owners. It is a mix that keeps our market strong and in high demand, side by side. One or two, or all three of these categories are almost always available for sale, but the market for second homes right now may be the strongest of the three, and boasts the most successful buyers in competitive situations.

If you live here already, whether you own or rent, count yourself lucky. We get to be here all the time ~ the second home buyers have to go back to their first homes. Their situation is enviable, but I still say we have the advantage given we get the Santa Cruz lifestyle more often.

Posted on June 5, 2019 at 10:19 pm
David Morrell | Posted in Uncategorized |

What home improvements bring you the most return on investment?

The common mantra is that a kitchen improvement and a bathroom renovation will bring the $2 for $1 investment return (or thereabouts). If done properly, a new kitchen can change the entire feel of a property; A new expanded bathroom can take a modest master bedroom and turn it into a four star hotel suite quality experience (at least for a night or two).
There are breakdowns of parts of a kitchen that detail which fixtures bring the most value back in resale. Each is important and ideally you are designing all of it to be cohesive, but if you are just doing some of your kitchen the counters are a must, and the cabinets have to be a close second.
Additionally, (and I take a turn here) I would jump outside the house to say that an improvement to a front porch, a walkway, an exterior entryway, front yard especially, and/or your deck can bring double plus resale value from your investment. It is the first thing your buyer sees and since most people are looking for homes in the light of a beautiful blue Santa Cruz day, they imagine themselves in this new space.  It is their new space and the investment to make it appear as such is what drives that impression home. When making the decision to move to Santa Cruz many are thinking of the outdoors, therefore you are validating their decision and marking your home as the place that meets their personal wants and needs. Kudos to you ~ more value to you.

Posted on June 5, 2019 at 10:15 pm
David Morrell | Posted in Uncategorized |