March 2022

California tops the Nation in happiest cities in 2022

According to WalletHub (a personal finance website), when it comes to the happiest cities in the country, California took the lion's share of honors this year, with six cities nabbing slots in the top 10. They looked at a variety of factors, including poverty levels, job satisfaction, work/leisure hours and divorce rates.

But the happiest city of all may indeed come as a surprise: Fremont, a city 44 miles southeast of San Francisco. In fact, Fremont has topped this list for the past three years in a row. The other happiest California cities were San Francisco, San Jose, Irvine, Huntington Beach and San Diego.

1st time homebuyers getting squeezed out by investors

As if this news was new, it appears that record-high home prices and low inventory were already making things hard for first-time homebuyers. But new numbers show that investors are driving even more people away from homeownership.

"Investors are coming in and pushing out the first-time buyers," says Lawrence Yun, chief economist for the National Association of Realtors. "The percentage of home sales that went to investors rose to 22% in January, up from 15% a year earlier. Meanwhile, sales to first-time homebuyers fell from 33% a year ago down to 27% in January. Under more normal conditions, first-time homebuyers would make up about 40% of sales".

I have always suggested that after the housing market crash and financial crisis of 2008, homebuilding never fully recovered. It was my understanding, we need an average of 1.5 million homes to be built nationwide every year for supply to keep up with demand, but the U.S. has been below this average for more than a decade. This decline in construction has led to a severe shortage of single-family homes, condos and rental housing and ultimately the reason for the increase in prices.

A recent Zillow report found that in 481 U.S. cities, the value of a typical home is now at least $1 million. "The number of cities that crossed the $1 million threshold in 2021 is almost triple that of cities reaching those heights in 2020, underscoring a record-setting year of home appreciation," according to the report.

Masks no longer required for showings or open houses

The California Department of Public Health has revised its State Masking Guidance: Effective March 1, 2022, the current requirement that unvaccinated individuals mask in indoor public settings has been revised to a strong recommendation that all persons, regardless of vaccine status, continue indoor masking. This new guidance will affect real estate activities such as showings and open houses.

Current Market Update according to C.A.R.

The outlook for the global and domestic macroeconomic environment has been clouded over the past week by rising geopolitical tensions in Eurasia. In addition, rising inflation and faltering mortgage applications have added to the turbulence of U.S. financial markets. However, despite these challenges, California's broader economy and its housing market are showing strength thus far in the face of rising headwinds. Home sales continue to exceed the pre-pandemic average, the market remains incredibly competitive, and active listings have finally started to rise in earnest in advance of the Spring homebuying season. There's no question that uncertainty has risen over the past 10 days, but the housing market continues to outperform expectations, nonetheless prices are rising.

Establishing a Right to Repair

I read this article in Consumer Reports recently and thought I would share the concept. Certain electronics makers have long insisted that their devices be fixed only by authorized repair centers, which can be expensive or difficult to access. They enforce these restrictions through a range of practices, including by limiting access to spare parts, manuals, and specialized tools (Big Brother at work). The upshot for them is that consumers sometimes have little choice but to throw the device away or buy a new one. This is why Consumer Reports (CR) became a leader of the "right to repair" movement.

Through this they have helped to develop legislation, versions of which have been introduced in more than 25 state legislatures and at the federal level. CR also incorporated the right to repair into the Digital Standard, an open-source set of technical criteria for evaluating the data privacy and security of software, digital services and internet connected products.

Fruits of their labor include the President last summer directing the FTC to draft rules banning unfair repair restrictions. Recently, Apple said it would start providing some spare parts and instruction manuals to consumers who want to do their own repairs. CR is now pushing for laws and regulations that would make this policy an industry requirement. If you agree, urge your representatives in Congress to pass the Fair Repair Act, H.R. 4006 at congress.gov.

2020-2022 February Comparisons for Santa Cruz, Monterey & the Bay Area

Comments: What a difference a pandemic makes. Santa Clara County went from 104.1% of list to sales price in 2020 to 116.9% in 2022 with a drop in inventory of over 36%. Santa Cruz County went from 98.6% of list to sales price in 2020 to 106.3% in 2022 with a drop in inventory of over 44.4%. While Monterey County went from 98.0% of list to sales price in 2020 to 101.4% in 2022 with a drop in inventory of over 61.5%. Is this sustainable?? (Display of MLS data is deemed reliable but is not guaranteed accurate by the MLS)