Where oh Where?


Continuing the conversation…Who’s selling homes in Santa Cruz and where are they going? And who’s buying them and where are they coming from? Last week we talked about the average seller profile. Most are aging baby boomers or the aging parents of aging baby boomers.

Common reasons for selling include:

Estate sales occurring as people living into their 80s and 90s pass away (we’re all going to get there). The desire to downsize and make proactive choices well ahead of the aging curve. Or the need to react a little too late
to specific challenges that arise due to aging (health concerns, mobility issues, passing
of a spouse, proximity to family, financial challenges etc.)

Here are their common destinations:

Local: Not so much. There’s a lack of single- level condos or townhomes out there. They weren’t making many during the 1980s and ‘90s when builders were stacking as much multi-story square footage as possible on those relatively small infill parcels.

And there’s no doubt that the waiting list for Dominican Oaks is expanding, but there aren’t enough residences there to meet current demand, and there aren’t many other desirable assisted living choices in the County either.

In theory, we should be seeing lots of local sellers transitioning into smaller single level homes right here in sunny Santa Cruz. But in practice, people are finding in-town move- downs difficult to accomplish in a place where there just aren’t enough smaller, single level homes offered at prices that allow them to transfer their property taxes and/or free up enough equity to live off of.

In State: Not so much either. In the old days, the Sierras were a destination of choice for aging baby-boomers. These days, increasing fears about fire danger and the perceived lack of access to medical care are limiting the silver-haired migration to Gold Country. The numbers would increase if property tax transfers were available in all counties, but since the recent state measure failed to pass, they won’t grow any time soon.

Out of State: The majority of sellers are moving out of California. There’s not one preferred destination for their new homes away from home, but Oregon, Washington, Nevada all rank high on the list. Throw in Idaho as well, and a little New Mexico and Texas on top. Most of those places have tax structures that serve as justification for the move. But the real similarity is that the cost of real estate and cost of living are both a lot lower than they are here.

That’s the quick overview on the selling side of the equation. Next week, let’s look at the buyers and where they are coming from.

Drilling Down and the Three D’s


Continuing the conversation…drilling down on the question lots of locals have been asking lately: Who is it that’s selling homes here and where are they going? And who is buying them and where are they coming from? First, let’s look at the seller side of the equation:

If there is such a thing as an “average seller” these days, the description would go something like this: most are between 60 and 90 years old and qualify as either aging baby- boomers or the aging parent(s) of aging baby- boomers. They reflect a huge demographic shift that’s happening nationwide as more people are living longer and wrestling with questions they never had to consider before.

In order to sell a house, people also have to own one first. And in a place where the median price fluctuates just above or below the $900,000 mark, it’s not surprising that most sellers are folks who’ve been alive long enough to gather the resources necessary to afford one in the first place.

People don’t sell homes on a whim. The process is simply too hard and requires
too much emotional energy to be a “sport”. Homes are people’s biggest asset and the all- important centering places for privacy, safety and comfort in their lives. Selling is almost never an end in itself. It is usually just one step in a much larger life transition sellers are going through.

These days, it’s not unusual to hear agents talk about the “Three Ds” as the driving forces behind the market. That’s real estate shorthand for Death, Divorce and Downsizing – things that definitely qualify as big life transitions, particularly for folks who find themselves heading into the last third of their lives.

I haven’t noticed an increase in divorce-driven home sales but then, people splitting up has always been a steady source of supply for the market. I also haven’t noticed fewer marriages ending recently. As far as death-driven sales? Since more homeowners are living into their 80s and 90s, it stands to reason that a higher percentage of the homes selling are estate sales.

Downsizing is by far the most significant factor for the majority of sellers in Santa Cruz. And before I simplify it too much, it bears repeating that “downsizing” has become a cultural meme for lots of different considerations that people past the age of 60 have: empty nesting, health challenges, retirement planning, tax consequences, estate planning and the desire for less maintenance and fewer stairs (to name a few).

In other words, it’s complicated. That’s who is selling in Santa Cruz these days…next week we’ll talk about where they are going.

Another Invasion of the Body-Snatchers?


After my recent series detailing the growth of Silicon Valley and how it has affected the Santa Cruz real estate market over the last 30 years, a number of people reached out to ask different versions of the same question: Who exactly is selling their homes these days and where are they going? And who is buying those homes and where are they coming from?

Great question. Here’s a very simple way to think about the big picture: By far, the majority of people selling their homes are older folks who are moving elsewhere, out of Santa Cruz. And also by far, the majority of people buying those homes are younger people coming from somewhere else, outside of Santa Cruz. (Most, but not all, from counties clustered in and around the Bay area.)

Whether some locals want to acknowledge it or not, this has been true for some time. But it has never been more true than it’s been these last five or six years during the long run up in appreciation our market has experienced. In other words, the pace of our outward/inward migration has accelerated since 2013 due to rising prices, the changing nature of the market and, I would add, the inevitable aging of the local population.

I coined my own pet term for this all a while back. I call it the Santa Cruz version of Invasion of the Body Snatchers, because sometimes it feels like every night after we go to sleep, a few more of our neighbors are mysteriously scooped up and replaced by alien “pod” people before we wake up the next morning.

They kind of look the same but they’re not. And as the fear goes, almost overnight, the character of Santa Cruz is being altered in profound ways beneath the surface. We can’t quite pinpoint it exactly but one day we’ll end up reaching a critical mass/inflection point that robs us of our inherent Santa Cruz-ness.

Summoning up a vision of Kevin McCarthy frantically screaming “You’re next! You’re next!” at oblivious passersby, in the original movie version of Body Snatchers, as a metaphor for the anti-Communist, anti- McCarthy-ite paranoias of the 1950s may be a bit of overkill here. Judging by some of the occasional hate mail I get blaming me for encouraging/letting Silicon Valley people buy houses here, maybe not.

All I can say to those distraught people who want to retroactively erect a wall at the top of the Summit, or to local culture-change deniers that insist everything should stay the same is: that ship has sailed. We are already living after the pod people have arrived. 

Getting In Touch With Your Why-Thing

a3312050880_5The traditional paradigm of real estate teaches young Realtors how to sell homes. But the longer I do this work, the more I realize it’s never just about selling homes. That’s really the smallest part of the job. And thanks to an astonishing market these days, also the easiest.

Real estate is really more about the profound life transitions that lie behind each sale. The all important “whys”  that shape someone’s pivotal decision to move.

No one sells their home for fun. Or decides to pick up and move on a lark. Never has that been more true than now. The average time people spend in their homes has risen to a record 12 years. Almost twice what it was in 2006.

On a basic level, selling a home is simply means getting from Point A to Point B.  Perhaps going from a two bedroom, one bath bungalow to a three bedroom, two bath ranch. Or from a larger executive home on a few acres to a single-level house near the beach.  

On a deeper level,  it’s about moving the whole of you from Point A to Point B in life. Taking the next step in your personal journey.  Whatever that “whything” is that’s driving your change.  Maybe it’s getting married or having kids. Getting older or losing a partner.

Directions for getting from Point A to Point B in life are always fuzzy. There aren’t any road maps or GPS coordinates. You can’t put that kind of change into your waze app and wait for a voice to tell you what to do.

The hardest part of the job these days isn’t selling houses. The greatest degree of difficulty comes from trying to figure out how to help the people selling the houses get over their own resistance to the very change they seek.  So they can move forward in life.  

Here’s a healthy meditation for anyone selling… Draw a timeline of your life stretching from earliest childhood to now.  Place all the homes you’ve ever lived in on it. Then take a long mental walk through each, remembering favorite rooms and the things you loved the most.

Then pull your focus back.  Look at how old you were when each move happened.  Recall those decisions and what was really difficult about them. See all the ways your life changed with each move.  Up until the last one, when you became even more of the person you are today.

Your home isn’t your life.  You are the force that animates the container within its four walls.  Like one of those crabs moving slowly along the ocean floor, you are just looking for the next shell that will house your life.


Out With The Old


Time to Put a Few of Real Estate’s Old Standbys Out to Pasture…

Real estate keeps changing right along with everything else. Best practices in today’s real estate don’t look anything like they did three decades ago when I first started.  They don’t even look much like they did six years ago when the market was just re-emerging from the long troubled sleep of the Great Recession.

The digital world is changing  the real estate process in increasingly profound ways.  And it’s important for Realtors to continue questioning their own assumptions about what works and what doesn’t.  What’s relevant and what’s not.  Otherwise, they’re likely to  get stuck on automatic pilot  doing the same old same old things that are no longer effective.

Here’s my short list of tried and true standards of analogue real estate that are becoming less relevant in the brave new world of digital real estate.

Driving People Around to Look at Houses?  Not anymore. Buyers now have access to the same info Agents have via the  internet.  They don’t need Agents to tell them about new listings.  Most prefer not ride around in somebody else’s car. They’d rather view homes on their own schedule,  at their own pace. Usually on the weekends.

Open House Signs? Time to retire all those ubiquitous signs littering the corners of major intersections on weekends? I’ve been doing a little surreptitious research. Some Sundays I put out more open house signs. Some none at all. The number of signs I put out doesn’t make any difference in the turnout. Serious Buyers already know which houses they want to see.  And they know how to get there with the help of their trusty Waze Apps.

Brokers Open Houses?  Turnouts at Thursday Brokers Open Houses are starting to resemble social gatherings at the Old Timers’’ Retirement Home. Nowhere is the greying of real estate more conspicuous than on Broker’s Tour Day.  Out of 1200 active agents in Santa Cruz County, it seems like the same 30 agents show up . Most are older and seemingly more interested in the cookies and the comaraderie  than the house. 

Brochure Boxes?  How about those little plastic boxes screwed into those yard signs? The ones nosey-neighbors leave the lids up on, so that the remaining supply of water-logged flyers can get folded, spindled and mutilated beyond recognition.  How many trees does it take  to feed the conceit of such inglorious marketing efforts? Do serious buyers really drive through neighborhoods looking for brochure boxes?

Printed Flyers? People who ask for them are usually neighbors who have wandered in because they saw the open house signs. They aren’t in the market to buy a house.  Grabbing a flyer is their way of keeping up with how much the Joneses are asking for their place.  With Zillow Zestimates an easy click away,  are four-color flyers really necessary to sell homes?

Monthly Color Magazines? When so many houses sell in the first week with multiple-offers, do we really need magazines that require a month’s lead time for submitting copy and photos?  Aren’t most homes sold by then?   And how many serious South Bay buyers drive over to Santa Cruz to get their cars washed just so they can look at all the beautiful houses for sale in the magazines?

The Downsize Dilemma and Low Inventory


Getting Old Isn’t for Sissies and Downsizing Isn’t for Wimps

More on Low Inventory Woes – Why More Sellers Aren’t Selling. Trying to pinpoint reasons behind the historic low inventory we’re experiencing. What’s causing the huge crimp in the supply-side of the market equation?

Whenever there’s a significant change in the market, pundits like to trot out their short list of “ usual suspects”.  Low Inventory is caused by people’s aversion to capital gains.  Or concerns about higher property taxes.  Or, since they’re already locked into their homes at rock-bottom interest rates, why sell and buy new houses with more costly mortgages?

Those are all important considerations but in this case they’re really just the tip of the iceberg. Smaller symptoms of a much larger shift. One that’s profoundly baked into the DNA of our own culture and has to do with our rapidly aging population and the fact that people are living longer than ever before.

It’s not a lack of people wanting to sell that’s causing the inventory shortage. It’s the fact that so many people who do want to sell are having trouble figuring out how to do it in ways that make sense to them.  As we speak, there are huge numbers of aging baby boomers (and their parents) who are  trying to navigate through their own unique downsizing dilemmas. When more people figure it out, more houses will go on the market.

When people are overwhelmed by the scope of a late-life changes even before they can  get out of the starting gate, it’s easy for them to retreat back into the fastness and comfort of home and their established routines. It’s tempting to kick the can down the road until “the time is right” (A euphemism that can mean waiting for something unexpected to happen that will force a change.)

Moving down is hard stuff. It takes tremendous courage. And…it isn’t going to get any easier five year or ten years from now. That’s the reality of it. Choose proactively now, how you want to live for the rest of the foreseeable future. Or wait until life makes the decision for you and doesn’t necessarily offer up any desirable options.

The magnitude of change associated with our rapidly-aging population is something we’ve never experienced before. In many ways, we’re living in an older, undiscovered country that’s trying to come to terms with its own existential angst. And it’s going to require an expanded conversation to find better solutions to the challenges inherent in living longer.

As my 94 year old parents are fond of saying whenever they get the chance: “Getting old isn’t for sissies!” To that, I’m going to add my own real estate-inspired phrase: “Downsizing isn’t for Wimps!”

Having the Termite Talk

estswm01 credit

More Adventures in Homeownership….

No philosophical rants or big life transitions to consider today. Time to get down to the nitty gritty of an issue that literally “bugs” the heck out of everyone in real estate.  I’m referring to termites of course.

Those nasty little pests who (if you buy into their bad press) are probably feasting on your siding, routing out your rafters and undermining your foundation as we speak.  Or not.  After 30 years of looking at homes, inspection reports and all things termites…I’ve got my own thoughts.

Here are a few:

-The termite industry has a great lobby. They’re the only ones licensed to tent houses.  Fumigations are their biggest revenue source. And those special tents? Most are owned by the same company out of Salinas.

-There’s no requirement for tenting at time of sale. That’s an urban myth from the old days.

-There’s nothing about fumigation that insures termites won’t be back again. They fly and form new colonies all the time. Fumigations only kill the termites there at the time.

-In Santa Cruz, active termites are the rule rather than the exception. If an inspector finds even a few, the recommendation will be tenting. If someone requests, they may provide a “spot” treatment estimate.

-Something’s not right, when an inspector is also bidding on work. It’s an invitation to inflate problems or find non-existent ones.

-There’s a reason why tents typically only go on houses during the sale process:  Very few people notice or worry about termites until they buy a house.

-Fungus damage (dry rot) can cause way more damage  much quicker than termites can.

-Termite inspections are actually Wood Destroying Pests and Organism Reports. That includes termites, carpenter ants, bees, wood-boring beetles and fungus (dryrot) And there are different kinds of termites – mostly drywoods and subterraneans in this area.

-There’s a reason why some termite companies offer 2yr warranties …if termites re-infest the next day, it takes around 2yrs for their pellets to reappear. And those regular monthly service contracts? Don’t get me started….

-Estimates termite companies give for carpentry work are often 40% higher than others charge.They subcontract the work and add on a premium.  And also inflate estimates to cover any additional damage found. 

-If a house has roof work years after a termite fumigation, it is difficult to tell whether the pellets in the attic are new or if all the banging knocked old evidence out of the rafters. 

That’s it for today folks. There’s lots more to the termite story of course.  Call me if you have questions.