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.
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Great stuff as usual Ryan. The funky driveway with grass has a practical purpose. It reduces water runoff by allowing the ground area to absorb the water. In green construction, a home can get credit for having a driveway like this or it might even be required to obtain green certification.
Fascinating Gary. Thank you. To me this looked like artificial turf when walking by, but it could be actual grass. This is interesting. I’d be curious to see side-by-side tests between concrete and this to see which is more efficient and “green” so to speak. I’ll keep this on the radar. Thanks again.
It looked real to me, but even if it’s artificial turf, I think it still qualifies as permiable landscape. I like it! ?
Thanks Brandice. I wish I had looked a little closer while on a walk. Next time… The design is funky for sure. And the view of the beach…. I like that.
That driveway does look like artificial turf, but I wonder if it is on top of something like a gravel base that allows for drainage. That could actually provide more drainage than real turf.
Thanks Gordon. I wish I knew more here. My curiosity is piqued.
You make me laugh Ryan. My family is constantly being bothered with my observations because, like you, my real estate mind never shuts off. This can drive others to drink. BTW, another great article, thanks.
Thanks Craig. Haha. I imagine the builder in you talks about woodworking too. I’m pretty sure we would have some fun conversations in person. I have to be cautious about how much I talk about work with family. They care to a point… Thanks for the kind words.
Hi Ryan, great blog….I am like you as well, I just spent 10 days in Waikiki, and I brought my work with me, and even got into contract on a purchase (between beach days and surfing :), and I was always on the lookout for any Real Estate Deals or prices or listings. I do not mind being on vacation and thinking about work, I guess that is just my work ethic. I am just glad I can be on a vacation (not stuck in an office), and still get stuff done, so I can take more vacations, just a round robin process….. The picture that stood out to me, was the 1.2mil condo, just goes to show, “Location, Location, Location” will always ring true.
Thanks Justin. I’m so glad you got to get away. Wonderful. It’s been years since I’ve been to Hawaii. I need to get back there and I know my kids are itching to go at some point too. I’m still looking for someone to invite me to speak there…. Haha.
One of the struggles of self-employment is it’s hard to completely turn things off. This is where at times it’s easy to envy a traditional 9 to 5 where someone can leave work at a desk. With that said, I find on vacation I am pretty good about turning off the spigot, but it’s important to still answer emails and texts. This is part of the deal though, and frankly I think it’s part of the blessing of being in business. Not everyone is built for a self-employed lifestyle, but I’m cool with answering the phone or putting in a few minutes here and there while away. No big deal. I will say though when we go camping outside of cell range, it’s really nice to have a completely forced break… 🙂
I really enjoyed your post Ryan! Great pictures! I like the more modern and contemporary style that is popular right now. Great thoughts on how views can change. It looks like it was a great trip!
Thanks Jamie. Do you see much contemporary construction in your market? I wasn’t too sure.
I do! Oddly enough, I am appraising one that’s about 4,000 sq ft on 25 acres. It’s a pretty cool house! I also see a lot of these more modern contemporary styles going up in more urban areas. I love the look of them.
That is very cool. And your point underscores that these homes aren’t always in an urban environment. It sort of reminds me of the movie Twilight (I know, I shouldn’t mention this, but I did see these movies with various people who wanted to see them and took me). The main vampire family had a modern-ish home that seemed to be in the woods… Anyway. 🙂
Haha! I never saw that one. But it sounds like the home I am appraising would fit the scene.?
Right on. Well, if you’re looking for a comp… 🙂
For sure! ?
Great post! I hope you had a wonderful vacation. I do the same thing. Always looking at different styles and potential issues that I see. I guess our appraiser brain never completely shuts off! Definitely some good thoughts about views and the potential to lose them. Thanks for sharing your thoughts!
Thanks Shannon. I appreciate it. I hope you are well these days.
This is great as usual, Ryan. Always informative, insightful, and encouraging. We know we are hopelessly addicted real estate and valuation professionals when we cannot turn off our real estate minds. Wherever my travels take me, the first thing I do is grab the real estate market mags from the airport, hotels, or restaurants – gotta see what prices are and where geographical markets appear to be. Thanks and keep on keepin’ on!
Brent
Thank you Brent. I appreciate the kind words. Great minds think alike… I’ve heard a few people tell me they look at the listings. I always do that too. 🙂
I hope you had a great vacation, Ryan! I haven’t tried writing a post while on vacation to get the write-off but I will definitely look into it. The Laci Peterson graph is very interesting. It makes you think twice about how the market perceives things. We can’t always assume that it is going to perform a certain way.
Haha. Let me know if you crack the code and figure out a legitimate way to write-off vacations. I agree on the graph. We never know what we might see. It’s very easy to assume, but that can get us into trouble.