Let me share some facts and information from the trenches that may help guide you as you make decisions for your real estate holdings:
The virus’ ultimate impact on Bay Area real estate has been to create a huge surge in demand for Country Property in wine country. People living throughout the more populated parts of northern California are coming here to find a country home where they can escape from the crowds, have some sort of protective isolation and work from home in a more beautiful, enjoyable and spacious setting than in SF or Silicon Valley. Some plan to sell their main residence and move up here permanently but many are putting a foot in the water with a second home, for the moment. Many see this as a future retirement home or investment property.
Key Elements These Buyers Are Looking For
- good INTERNET access is key for them to work from home
- ability to use for vacation rental; exclusion zones are undesirable for them
- commute times and distance to major highways
- quiet properties, generally not in subdivisions, on larger lots
- easy care maintenance
- out of the main ‘fire corridors’- and with second routes for exit if needed
Many local residents are also thinking of changing homes. Most of this is driven by the desire to have different amenities and many are buying more square footage. More people working from home. Kids are home more. Gyms and pools are closed. People who are part of a household generally want more separation of space. They may want 1-2 home offices, and room for a gym, pool or a playground.
Safety First: We take serious precautions in marketing and showing properties these days. No Open Houses. No Broker tours. All visitors must attest that they are symptom-free, not Covid positive or been around anyone who is, wear a mask and in addition, I ask all clients to wear gloves when viewing homes. This is the best way to ensure that we protect buyers and sellers from touring property. Everyone is happy to comply and we have to be diligent to keep everyone safe.
Many local residents are spooked by the frequency of recent fires and thinking of leaving our area. We hate to see this and past experience suggests that once things settle down a little, this will abate. Many aim to stay on the west coast and are looking at Washington & Oregon as well as Texas and Nevada. Boise, Asheville & Phoenix are also popular destinations.
Properties that have been in areas which have burned are seeing a dip in demand and we expect prices to reflect that in the coming year.
Insurance is a major issue in the market now. There are some properties that remain uninsurable or carry exorbitant premiums. This is delaying or causing cancellation of escrows and can also affect home pricing so it’s important to be able to offer an insurance estimate when you market your home.
Here’s a really good bit of news that few people are aware of. Having passed Prop 19, we now have a whole new situation for seniors who want to keep the tax basis of the homes they own. If you are over 55 years old you can now
- transport your tax basis THREE time in your life, not just once!
- Move anywhere in the state and keep you tax basis!
- Buy a more expensive replacement property than the one you sell and only pay the tax uplift between the two
This is a huge change which will affect almost a quarter of our population. This enables seniors to move anywhere in the state and should be really good news for real estate. The additional tax income from property transfer taxes will largely benefit the schools.
There is a downside to this law that affects heirs who inherit properties- if it’s not your primary residence you may lose the tax basis that the family had previously. As always, ask a tax advisor for details but we wanted you to know about these important changes.