My real estate mind never shuts off. Even when I’m on vacation I can’t help but notice interesting things and think through value issues. Anyway, last week I took a family road trip through Southern California and here are some things that caught my eye. Enjoy if you wish.
INSIGHTS WHILE ON VACATION
1) Vibrant colors: Imagine this pink color in a newer tract subdivision of stucco boxes with earth tones. In that scenario the market could have a negative reaction to such a loud color, but in certain areas vibrant colors are accepted. This reminds us the market isn’t the same in every location or price range. By the way, check out this pink house near Austin in case you missed it earlier this year.
2) Prices are relative: These new townhouse units in San Diego start at $1.2 million. That’s wild considering the starter model is less than 1,200 sq ft. In Sacramento we don’t tend to see such small units command this price point. For reference only 2.5% of the entire regional market in Sacramento this year has sold above $1M. It’s a good reminder that prices are relative to their location. But still, I think this underscores the struggle of affordability in California too.
3) Views can be temporary: This unit has a view of the ocean for now because there’s a vacant lot in front of it that allows this view to happen. My advice? Whenever purchasing a property near vacant land, be sure to check out the zoning and/or the probability of a zoning change. This will help you know what can be built because a vacant lot doesn’t always stay that way…
4) Unique architecture: This is a new build with a modern Arabic architectural feel. It’s a gorgeous custom home and there aren’t too many like it from what I can tell. What would you do for comps on this one?
5) The rage of contemporary homes: I see contemporary or “modern” architecture popping up all over the place in many major cities throughout the country. But while contemporary is clearly a growing trend, it’s not everywhere either. For instance, we don’t tend to see homes like this built in rural markets or lower-priced areas, but we do see it near major cities. On a personal taste level, this isn’t for everyone. But then again, it doesn’t matter what you or I think. What does the market think?
6) A location with an asterisk: This is a killer view, but there’s one big issue. Is it possible to demolish the unit in front? If so, how high could a new structure be? This is a critical issue to consider when choosing comps as we have to consider the permanence of a view when assigning value to a property. We see stuff like this happen all the time when an owner backs vacant land until a developer builds a store. I recently appraised a house that had a lake view only because of a vacant lot across the street. But said vacant land was purchased and it’s now likely to see a change in the view.
7) Funky driveway: I’ve not seen a driveway like this before. I’m not sure if it’s just ornamental or if there is a practical use for this design. What do you think?
8) A door that pops: I often get asked for ways to help increase curb appeal. I’m not saying painting your door is going to sway value, but when there is a limited budget I tend to tell people to focus on lots of little things instead of just one big project. In other words, try to increase the “bling” of a house in small ways rather than only remodeling the kitchen. This is why I like painting a door because it’s an inexpensive and practical way to give a house vibe or even charm. As always, know your market. If nobody is doing this, maybe don’t do it.
9) A house of a convicted murderer: I made this image just before vacation and I wanted to sneak it in here. I’ve been watching a series on Hulu called The Murder of Laci Peterson. If you recall, Scott Peterson was convicted of murdering his pregnant wife about 15 years ago. Anyway, this home has sold a few times, so I figured it was worthwhile to visualize on a graph. Does it look like the most recent three sales sold with a diminished value? Or does it seem like the sales fit into the market without any big negative reaction? We talk about homes with stigma all the time, and all I’m saying is it’s important to consider whether a notorious owner in the past or something that happened at a house can make a difference in the value. In this case we don’t actually know for sure where the wife and child were killed. Here are some more thoughts on fame and real estate if you’re interested.
10) Unique homes & unique comps: If you’re trying to pull comps on a unique home, you’re not likely to find something exactly the same. My advice? Look through years of sales for clues on how the market responds to unique properties. Try to find something that is similar in appeal or uniqueness rather than hastily picking the three most recent similar-sized ranch home sales over the past few months. Those SALES might not be COMPS.
Anyway, that was my vacation. And now my trip is a tax write-off since I blogged about it. Right? 🙂
I hope you enjoyed my trip as much as I did.
Questions: Are you similar to me in not being able to shut off your mind? What pictures stand out most to you? I’d love to hear your take.