Fall 2006 Newsletter

C A R P E   D I E M

Timing and the North Coast Market:
Is it Time to Take the Plunge?

I have been a Realtor for almost 30 years. Having had overlapping careers in television production and Real Estate gives me a perspective that is at once totally involved in the world of Buyers and Sellers but evaluated from the perspective of the business world.

Today's market is not really a confusing one. Put simply: the market is in a correction mode. This is nothing new or something to be alarmed about. It's just correcting. It always does. This is part of the market cycle. The trick to this market is to know how much it is correcting in your geographic area of interest.

What is surprising is that people no longer choose to remember the old adage: "Buy low, sell high." Take it from me: this is definitely a Buyer's Market on the North Coast, so it is time to take those stock gains and buy that second home you've been thinking of all these years. This is not the end of the up-tick in real estate — especially in the market I service — but the mind-set of your home as a savings account should be put aside for a while. The part of the equation people so easily ignore is the enjoyment factor. What is it worth to you to have something that brings you pure pleasure?

When Will the Market Recover?

From my perspective, the hardest part of the market recovery will take place in areas with large, new housing tracts. Especially hard hit will be areas where the school systems are not highly rated. The Mendocino Coast and Anderson Valley do not have any such tracts. We have the opposite: a lot of unique, site-built properties with larger tracts of land or specialty settings, such as oceanfront homes or hilltop Valley homes with big views.

I am constantly amazed when people come here and are surprised at the prices. I have been selling in this market for almost 18 years. The increase in prices has been gradual and understandable. You have to ask yourself: Where else can I live and have a strong community; no pollution; little congestion; a maritime climate with few lows or extreme highs; first class markets, shops and restaurants; two plus hours to a major city (San Francisco); a variety of entertainment choices; and world-class scenery? Another plus is that you can now have high speed cable or satellite Internet services that make tele-commuting a true reality. Try to think of another area where you can have all of this and not be overrun with population pressure.

Another fact to consider is that most of our properties are on one plus acre of land with stunning views and conveniences akin to the city at well-below city prices for a comparable property.

Airports and Travel

I am equally stunned when I hear people chortle about the drive to Oakland, SFO or Sacramento to fly off on a vacation. Unless you are traveling weekly for business, the trip to the airport is a small price to pay for living in scenic luxury and peace of mind the rest of the year. We locals have mastered that "inconvenience" by staying at a hotel near the airport that features long-term parking the night before we fly. It turns out to be a bargain as well as a way to dispel those arguments.

New vs. "Seasoned" Homes

The trend in home-buying — even in our area — seems to be for the "newer" properties built in 1990 or later. As most of the properties are custom built, it is unusual to find a home that is five years old or newer for sale. Buyers who come here looking for the granite kitchens and entertainment centers with all the bells and whistles are bound to be disappointed, unless they are willing to pay for it, or remodel an existing home. To be sure, we have some of those properties, but the great majority are homes built before 1990. These homes are the eternal bargains. You can do a lot of remodeling with $50,000 and more than often you could not rebuild a home on the land upon which it sits for what these homes are selling for today. Unlike the city, you have to factor in the cost of the infrastructure, which can be sizeable the more recent the vintage of the home. The earlier the infrastructure was installed, the smaller the cost that is factored into the selling price. Another key factor is this: Many of the earlier homes are built of "clear-heart" redwood which is less likely to have insect infestation.

Some Buyers like to calculate square foot price. If you are one of these, be sure you factor in the acreage price, plus the infrastructure price, such as well and septic, garden installation, and underground electrical connections. In the city, where you are used to having everything at the lot-line of a property, it might be hard to imagine the effort that it takes to have all those services installed off the beaten track. I know, first hand, the cost and amount of sweat equity that goes into this part of building.

In short, there are well-priced properties waiting to be snatched up. I'll help you with comparable sales figures and a thorough knowledge of this market if you are ready to take the plunge. Truly, there is no time like the present to take a look at the North Coast area for that dreamed-of "move to the country" or "ideal place to retire."

Cheers!
Gio

October 2006

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