Bay Area home prices rise further as Santa Clara County joins $1 million club

Today’s San Francisco Chronicle article on home prices includes information on an important ballot initiative and a chart showing each county’s year-over-year price change. It’s important to note the only county that remained flat on that chart is Sonoma County. What that looks like on the ground in the wine country after the fires is some neighborhoods have increased in value, some are in a holding pattern while buyers weigh the impact of the fires, and others will most likely lose value. There are value opportunities in areas that one would judge as relatively safe in a fire, but perhaps slightly up in the hills.

The possibility of an initiative on the ballot that allows seniors to transfer their property tax base across county lines may have a huge impact on housing inventory and therefore home prices as early as next year. It’s a fact that those who have owned their home for decades are reluctant to go anywhere due to the low property taxes they are paying. While they have the opportunity to move once and keep that low tax base, the current law restricts them to the same county. In Marin, that means senior citizens have nowhere to move if they have interest in cashing out of a multi-story home that needs a lot of maintenance and moving to a more affordable area.

If the property tax initiative were to pass, high priced counties like Marin, San Francisco and Santa Clara would see an increase in inventory as more seniors have the ability to downsize to lower-priced areas like Napa and Sonoma Counties. Conversely, prices may increase in those less populated counties. It’s a trend that may have already started with the advent of telecommuting and flexible schedules. For those concerned with the rising home prices near San Francisco and Silicon Valley, this initiative would be the solution in my opinion that would have the most impact. I have not read and analyzed it yet, though… so I’m as in the dark as the U.S. Congress is passing a 2200 page budget.

Read the full SF Chronicle article here.

Why I Don’t Double-End

I was reminded the other day why I don’t double-end.  Double-ending is the practice in which the listing agent also represents the buyer in a sale.  It certainly is possible that neither the seller nor the buyer will be compromised by that kind of arrangement, but the certain winner in the double-ending game is always the agent, who is incentivized to close and take home double the commission.

Back to the other day…. A colleague was complaining that while she was waiting to hear back from a listing agent regarding a date that tenants would allow a viewing, the agent put the home into contract before calling her.  Yes, it turned out the agent slipped her own buyer in before other agents or buyers were allowed to see the home.  Worse, her buyer had a home to sell first and a lower price than what my colleague’s client would have paid.  In that scenario, the sellers may have lost between $25,000 and $100,000 in sales price because their home was not being exposed to the wider agent and buyer pool. 

Buyers who are relying on the seller’s agent to review areas of concern and recommend inspections may be disappointed too.  Maybe not today, maybe not tomorrow, but soon, and possibly while discovering the source of the mildew smell downstairs.

Again, I’m confident I could fairly represent both sides and offer solutions to any issues that are fair.  It’s a fact though, that buyers and sellers are more likely to suspect that the agent is not looking out for their best interests in a double-ending, double-commission scenario.  Resentment can build quickly.  I don’t go there because my successful business is based on happy clients and their referrals.  Worse, on a percentage basis, there is a higher number of lawsuits on deals that are double-ended.   The only winners in that situation of course are the attorneys.