What is Home Anyways? — East Bay’s housing market and real estate update for September 2020
What is home? A simple question with a very complex and varied answer depending on who you ask. And while it might seem that this discussion belongs in the “Personal Stuff” down below, it’s my opinion that the way people are answer this question for themselves is really driving East Bay’s housing market. Let me explain.
As we have all experienced, the Pandemic has changed nearly every facet of our lives. From how and when we shop to who we see to what we wear, it’s all our new normal. Jobs, offices, commute, and lifestyle have obviously not escaped the grip of change that comes along with this new normal.
People are going East
The major trend I’m still seeing is people moving east. Many of our newest East Bay residents (buyers) are coming from SF and the peninsula. And many of our former residents (sellers) are going further east to other parts of the state or country.
Based on conversations with many people on both sides of the transaction, a reassessment of priorities, goals, and lifestyle is at the core of these moves. Couple that with historically low interest rates and still less inventory than buyer demand and you have a recipe for some seriously hot competition.
This is a topic I covered in some more depth in my most recent YouTube video. You can watch it here:
What’s interesting is that this is not spread evenly across all parts of the East Bay’s housing market, or even asset classes. Generally, the single family homes in great locations with a yard and/or garage are garnering the most attention and bids. On the flip side, the condo markets and houses without yards tend to struggle compared to the aforementioned single family home.
The COVID Factor
I chalk that up to the COVID factor. People want more space and don’t want to share an elevator with hundreds of their neighbors every day if they have a choice. Makes sense, right? Small lots or condos are still transacting at fair prices assuming they have an “X factor” that boosts the value in the buyers’ mind. A rare three bedroom floor plan, an incredible view, a location to die for? All reasons to circle back for a second look.
I alluded to this earlier in the email but what the market is asking for in a home is changing. Broadly speaking, because everyone is working from home, running school out of their living room, and trying to exercise in their back yard/garage, the need for more space has a serious premium to most buyers.
Before COVID, it was rare that a client would be so adamant about having a garage or detached structure for an office. Now, it’s near or at the top of their list. Where open floor plans and walkability reigned supreme as recently as early March, back yards, garages and a bonus space for a second office are now all the rage.
Couple that desire with the low interest rates and it’s making many think about stepping up to the next level of house. Where they would have comfortable bought a starter 2/1 they are now thinking about a larger 3/2.
Where that kind of purchase may have been more of a vanity play before, it’s simply a matter of practicality, and depending on how many kids you have, survival. Plus, I’m seeing more buyers look at a longer time horizon to stay in their homes.
From Five Years to Ten or More
My first time home buyer clients were usually thinking they would buy something and move again within five years. Now most are thinking they will be in their home closer to ten. Whether they are or aren’t is irrelevant as it’s driving their buying decision right now. If someone values that extra bedroom, yard, and bonus space or unfinished basement because they will actually use it and they believe they will be there for ten years, they will often dig a bit deeper for it.
That coupled with a lack of inventory, is driving the prices to the levels they are at now. And when you take a step back, the SIP order, civil unrest due to the BLM protests, wildfire smoke and the upcoming election have yet to derail East Bay’s housing market. Maybe it’s reasonable to believe that the next storm can be weathered in the same manner?
That’s not a prediction by the way, more of an observation. In the end, real estate is worth what “the market” is willing to pay for it. And based on the buyer psychology and current availability of credit, that value is high right now.
Personal Stuff: On Forgiving Ourselves
Forgive yourself? For what? That’s what I have been mulling over since listening to a podcast earlier this week. One of my friends, Jimmy Rex, interviewed Brad Lee on his podcast and that conversation really got me thinking. You can check it out HERE.
Brad was talking about improving your results in life. He said that the first step to getting closer to what you want is to start by forgiving yourself. We spend time looking at our past and judging ourselves based on what we did. That judgment creates a nasty mindset loop that continues to drag us down in that same direction.
His advice is to have some empathy and forgive yourself.
Like, for real. We all judge the actions we took, the results we got and think that is what we are. If we ever want more that what we are, then according to Brad, we need to start by looking in the mirror and genuinely giving our former selves a break.
That person was likely doing the best they could or had different priorities that today’s version doesn’t share any longer. If we keep holding onto and judging that past version of ourselves, that’s what we will project into the present. That mindset and behavior will continue to echo forward, thus leading to similar results.
So, as someone who is working on this himself, I would encourage you to really think about the judgments you are casting on your current self based on what you did or didn’t do in the past. Then decide if that blame or judgment is serving or helping you get to your goals. If not, it’s time to have that uncomfortable talk with yourself. Remember, if you always do what you did, you will get what you got. You get what you got because you think the way you thought. You think that way because of the beliefs you have and hold onto. Consider changing those beliefs about yourself and see if that doesn’t change a few of your results.
I hope this East Bay's housing market and real estate update has helped you.
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