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My blog is 10 years old today

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It’s been ten years. I started this blog on February 20, 2009. I can’t believe it. The real estate market was way different then and so was my life. I have two things on my mind today.

1) THANK YOU

I’m so grateful for this past decade. I’ve had a blast and I’ve learned so much from our conversations through the years. I know it sounds dramatic, but my business and life have changed. My kids are now teenagers, my beard has way too much gray for my age, and I feel like I’m now surrounded with a tribe of such supportive people. Our conversations have led to many opportunities, weekly presentations in real estate offices, and doing the type of work I want to be doing. Thank you for adding joy to my life (that sounded way too Marie Kondo).

2) THINGS I’VE LEARNED ABOUT BLOGGING (AND LIFE)

1) Progress is impossible without effort: It’s impossible to make progress if you don’t put yourself out there. In other words, I wouldn’t be at ten years today without my first lame post.

2) You can’t please everyone: It’s impossible.

3) It’s not easy to be brief: Yep. Sorry. Nothing more to say about that.

4) Consistency: One of the most important things is being consistent. This is true for blogging and it’s true for anyone trying to reach others with a message. People say to me all the time, “I could never do what you do because I’m too busy.” I get it. But here’s the thing. We’ll never get results unless we commit to being consistent – no matter how busy we get.

5) Relationships: Ten years ago I started this blog as a way to earn business, and that definitely happened. But most of all I earned friendships.

Thank you for hanging with me for these years.

BLOG BASH: Just a reminder my wife and I are hosting a party at Yolo Brewing on Saturday March 2nd. It’s an excuse to get together and you’re invited. It’s okay if we’ve never met too. I’ll be buying the first 100 beers. Details here.

Question: What is one thing that is different about your life since 2009?

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Being neutral, price per square foot, and the Governor’s new digs

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I have a few things on my mind. Let’s talk about me being asked to recruit for a brokerage (really), price per sq ft, and the Governor’s new digs.

1) WHY I SAID “NO”:

A brokerage recently asked me if I would help them recruit agents. The idea was I could use my influence to attract agents to a certain brand and then get a commission for each person I recruited.

I said NO, and my answer will always be NO. I probably don’t even need to mention this, but I want to communicate clearly. As an appraiser I won’t take sides. I’m neutral in my work, but my independence also extends in the way I interact with the real estate community. This is why you’ll see me speaking in many different places and real estate offices. I’m here to educate, not advocate. The truth is if I said yes I would’ve instantly destroyed my credibility.

2) PRICE PER SQ FT:

Here’s a look at price per sq ft trends in a few local areas. I plan to share more graphs like this throughout the year if people like them. Does anyone want to see a video tutorial for how to make these? Let me know. What do you see?

Two Takeaways:

1) RANGE: There’s always a price per sq ft range, which means there’s never just one price per sq ft figure that applies to every property in a neighborhood. Sellers often want to hijack a price per sq ft figure from a sale down the street, but that’s one of the quickest ways to overprice. My advice? Pay attention to price per sq ft, but most of all ask yourself what the comps are selling for. That’s exactly what appraisers are going to do.

2) OUTLIERS: There are clear outliers. As an FYI, usually the highest price per sq ft figures end up representing the smallest-sized homes or over-the-top unique properties.

3) THE GOVERNOR’S NEW DIGS: 

Gavin Newsom is the new governor of California and he just bought a $3.7M house in Fair Oaks. This price point isn’t much in many areas of the country, but it’s actually the fifth highest residential sale ever in Sacramento County. This home is said to have over 12,000 sq ft and it’s located on 8 acres. It’s near the American River, but not on the river. Now two of the top five sales in the county have a connection to a governor (the other was the mansion Ronald Reagan started to build in Carmichael in the 1970s).

Here’s a picture I took of the front gate this week, and here’s a video from a previous listing if you wish to see the home. Not too shabby, right?

Value thought: In the future we’ll have to consider whether there will be a price premium or not for this home because a governor owned the property.

CLASS I’M TEACHING: I’m teaching my favorite class at SAR called How to Think Like an Appraiser on January 31st from 9-12pm. We’ll dig deep into comps and adjustments (and have some fun). I’d love to have you come out.

I hope this was helpful or interesting.

Questions: Would you pay more if a governor previously owned the home? What do you think of my recruiting story? I’d love to hear your take.

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The real estate left behind after a fire

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Last month the Town of Paradise, CA was destroyed during the Camp Fire. The flames showed no mercy as they took lives and leveled nearly 14,000 homes. The devastation is simply unreal and hard to fathom.

Today I wanted to do a Q&A about the aftermath of this fire and what’s happening in the surrounding real estate market as a result. It’s sobering to know there are tens of thousands of people trying to figure out what to do and where to live, which is why this is important to talk about. I asked Parke Noble with California Appraisals to answer some questions since he’s a sharp guy based about 15 miles from Paradise. We didn’t talk about post-disaster appraisals because a different interview covered that, but I hope you find some insight here. And for reference, the Town of Paradise is about 90 or so minutes from Sacramento.

Ryan: I guess this is a heavy start, but what was it like to witness the Camp Fire? I know Chico is about 15-20 miles away.

Parke: I live in Chico, so my direct immediate exposure to the tragedy of the Camp Fire was from a distance; I can’t begin to imagine the chaos that those who witnessed the devastation experienced. And I can’t fathom the heartbreak that they continue to experience now that access restrictions for the Town of Paradise and the communities of Magalia and Concow have been lifted. Please keep in mind that although “open”, the Town of Paradise access is intended for those directly affected.

Ryan: Do you think people are going to rebuild in Paradise? Why or why not?

Parke: With regard to rebuild options, it has been my experience that less than 50% of those who lost their home intend to rebuild. Although the reasons are numerous, the primary concern has focused on the fact that as an aged demographic many survivors have indicated that they don’t want to spend the requisite time that it’s going to take to rebuild. They’re either attempting to secure a “turn key” option in neighboring communities or moving out of area altogether. Additional factors include a lack of qualified contractors and the fact that as a ridge community another fire could possibly occur in the future. On top of this we have to remember the lack of infrastructure in Paradise; no services. There is apprehension for those that do choose to rebuild. What if the town doesn’t “come back” and you’re left with a house without infrastructure?

Ryan: We’ve been reading reports about housing inventory being depleted in Chico because of the massive amount of Camp Fire refugees. Is that true?

Parke: Single family residential inventory in Chico has been dramatically impacted since the November 8th Camp Fire. Per CRMLS data, detached single family residential active listings numbered 252 on November 7th. As of December 4th that number had dropped to 91 offerings (-36%). That number had increased to 106 active listings as of December 19th.

Ryan: What do you see happening with prices in Chico right now? Is the market as aggressive as people are making it out to be?

Parke: Prices across every market segment have experienced substantial demand and consequently higher median resale prices. The current Chico market indicates sales 5-25%+ above list price. List price average increased +10% from November to December. Sale price average has increased 9% from November to December and days to sell declined from an average of 54 days in November to 19 days in December. As an example, a listing at $485,000 sold for $612,000 in three days with multiple offers. Ongoing sales above list are the market norm right now. 

Ryan: How long do you think this type of activity can keep up in the market? 

Parke: The current Chico market dynamic is vastly different from anything experienced in the past and was virtually an immediate impact with the sudden loss of about 14,000 homes in the Camp Fire. It’s unlike the consistent, sustained price creep and gradual inflation experienced in Chico in 2006-2007. This type of sudden market hyperinflation will continue as long as demand supports the small inventory. As a side note to ask appraiser peers: How will the sales during this period of artificial inflation be handled as comparables when these current conveyances don’t qualify as standard, arm’s length transactions?

Ryan: What advice would you give to sellers and buyers in Chico?

Parke: Depending on what side of the transaction you’re on, you’re either quite happy with the value increases or extremely discouraged. As with any market anomaly, there are parties looking to capitalize. Numerous active listings saw increases in asking price after November 8th. And the increases were absorbed by a desperate market willing to bear. Any advice for a seller and/or buyer would virtually be a moot point; the entire current market is a deviation from an outlier in an anomaly…..

Ryan: How would you go about valuing a property in Paradise right now?

Parke: Valuations in Paradise will be for vacant parcels. I can’t imagine attempting to demonstrate the influences/effects of such vast devastation on those residential structures left standing. An adequate data set does not exist at this time.

Ryan: You’re a numbers guy, so what numbers (or data) do you plan to watch over time to help you understand the market?

Parke: I’ll continue to track inventory, list-to-sale ratios, sale price averages, days on market, etc. Time will be required to collect and analyze.  

Ryan: Thank you so much for doing the interview. You killed it and I appreciate your time and insight.

Parke’s Bio: Parke Noble has been serving Northern California since 1997. Experience includes appraising single family residences, multi-family residential (2-4) units, in addition to condominium, PUD, manufactured housing, proposed construction, and FHA/HUD roster work. Additional experience in narrative reports, highest and best use studies and HUD Rent Comparability Study (RCS). Service area within Butte County. Parke is a graduate of Chico State University and he is originally from Sacramento.

I hope this was helpful or interesting.

Video Market Update: I made a Sacramento market update video yesterday to walk through numbers and talk through some trends. Enjoy if you wish.

Last Post of 2018: Merry Christmas and Happy Holidays from my family to yours. I’ll be taking the next week off and I’ll see you again in 2019. On a serious note, thank you so much for enhancing my life this year. I’m truly grateful to be connected and I’m honored you came with me on this blogging journey in 2018. It was a fun ride for me, and I hope it was for you too. 

Questions: What stood out to you most about what Parke said? Anything else to add? Also, do you have suggestions for where to donate to help Paradise residents? I’d love to hear your take.

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A hair stylist says we’re not in a bubble…

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Everywhere I go people are talking about housing. So it wasn’t a surprise to have a market conversation with a hair stylist while flying to Texas last week. We talked about real estate bubbles and mullets. Anyway, here’s a few quick takeaways and some thoughts after attending an amazing conference called AppraiserFest. 

Of course I shared this conversation on Twitter:

TAKEAWAYS:

1) Opinions: Everyone has an opinion about what the market is doing or will do in the future. These days when I meet people I tend to ask them what they think is happening, and I’m always grateful and fascinated to hear responses. The truth is I like to hear opinions, but the bigger issue is an opinion without influence from local data isn’t that meaningful, whether it’s from a hair stylist, economist, or real estate professional.

2) Local data: The only thing that really matters right now is local data. What do the stats say the market is doing? What is the word on the street? What are we hearing from sellers and buyers? What is normal and not normal for a slower fall season? More than ever we need to pay attention and sometimes sift through the hype of doom & gloom real estate headlines too. This market presents us an opportunity to be objective, honest about not knowing the future exactly, and creative to find ways to describe what the market is doing. On a side note I’ll have my big monthly market update posted next week.

3) Mullets: Speaking of mullets, six years ago I helped coin the term “parcel mullet” to explain the phenomenon of having a short lawn in the front and a long lawn in the back. Either you think that’s hilarious or now you know I’m immature.

REAL ESTATE “ISLANDS”

I just got back from a conference called AppraiserFest. It was incredible to hang with nearly 300 other appraisers for a few days in San Antonio. I was honored to speak too. Anyway, here’s a couple of things on my mind that I wanted to share as an encouragement to real estate professionals.

1) Islands: It’s easy in real estate to go about things alone or be an “island” so to speak. But growing professionally and learning often involves intentionally being around people who will help us grow. I know this seems basic, but often appraisers are solo artists and completely isolated. That’s not a good thing, and it’s one reason why it was so powerful to see appraisers come together.

2) Finding people: With so much talk about the market changing, it’s critical to be surrounded by people who are accurately interpreting the market and helping us think through issues. My encouragement is to find others to help you think out of the box when it comes to real estate trends (and being successful in any market). I realize that’s a bit vague, but it’s something that needs to happen. As a side note I read Jonathan Miller’s Housing Notes every Friday without fail, and that’s one practical thing I do to help keep my mind sharp. For me Jonathan is one of those people who speaks into my life from afar and I’m better for it. That’s one reason why it was a real pleasure to meet him in person this past week.

I hope that was interesting or helpful.

Market update video: Here’s a video I did with Realtor Doug Reynolds a couple weeks ago to talk through the fall market. Check it out if you’d like. If you want to do something like this too, let me know.

NOTE about this video: Someone asked me how much I charge to share a video with an agent like the one above. In short, I will NEVER do that. I shared this because I was in the video and the content is worth digesting. I did this video for free with Doug and that’s what I do with everyone. I have a couple more video shoots on the docket and I may share those eventually too, but only if they actually fit with what I’m saying. If a video doesn’t add value or fit within what I’m trying to say, then it won’t get shared. Make sense? Hopefully so.

Questions: In what places are you having real estate conversations lately? What voices are you listening to right now that are helping you grow and think through the market?

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