Happy memorial Day...How will the next week and month progress?
3rd Month of Shelter in Place
Real Estate is an Asset Class. As an asset class it has value from appreciation and income. It has value as a store of value. It has an important attribute no other asset has. It has security in shelter.
When any asset is looked at it has a value for 1. SHORT TERM, 2. INTERMEDIATE TERM, 3 LONG TERM. The ownership of Real Estate is for investors looking for income and appreciation, investors looking for Store of Value. The majority of real estate owners are for residential purposes. Not rental properties but for a home to raise family enjoy grand children and spend their later years together.
It is for the later I write this Blog.
It is so easy for either Buyer or Seller to be frightened by commentaries in the media. For example Zero Hedge wrote "Somebody is Dumping Everything" Mystery Investor Pukes $333M in Real Estate ETF in Dark Pool Trade. Key word is INVESTOR. Does that really mean anything for a personal home. Does it affect having a family BBQ for Memorial Day. Does it affect the newly weds moving into a home to start their lives together...NO!!!
When one looks at a residential property it must be viewed for the near term (<5 years), intermediate term (5-10 years), and long term.( 10-30 years plus) That applies to seller and buyer.
To the buyer is this the neighborhood they will live in for the long term. Or it is something they will own until their family grows and a larger home is needed. Or is it for the short term as the job may be only one of several stopping points in the challenges ahead.
To the seller is it the home they have outgrown. Is it the home that they must leave for career movement? Is it the home they can no longer care for.
SHORT TERM:
The housing market is recovering slowly in Silicon Valley. Tech companies dominate and have expanded their foot print. Foot prints that have expanded housing prices and cost of livings.
That foot print may get smaller. Shelter in Place has expanded the use of virtual meeting, tours and conversations. Technology has helped in creating an environment that will allow employees to work from home.
Mark Zuckerberg has said Facebook employees are moving out of Silicon Valley. He predict 50% of their workforce will work remotely in next 10 years. Currently 95% are working remotely. Some 65-75% of the workforce of Facebook have said they would move from the Bay area. Following suit with Facebook in remote work places is Sales Force, Twitter, Square and Shopify.
A new Pandemic Study by Cleaver Real Estate among sellers, buyers, renters gave a sense of their feelings as this lockdown enters it third month. Worry and concern are having a bitter impact on feelings. That is the sense of recession over a recovery. Leaning the feelings more in recession is the feeling of living costs without income or limited income; is having an impact on daily life.
For those buyers and sellers the short term is a better place of opportunity than the medium or long term. For the seller the price of listings have been declining, home prices from list have been declining. The declines are not universal. Many homes sell at or near list. They are priced correctly to the market. Pricing a home for sale is most important. Trying for the top is a waste of time. It will only lead to lower prices, greater days on the market, greater skepticism with longer days on the market with more price cuts until sold at a lower price than could have it priced properly.
This is the start of a buyer's market. Look at those homes that have had price cuts and look to make an offer. Look at homes priced below the market and look to a price you would pay no more than and put in an offer.
MEDIUM TERM:
The marketplace will adjust as the concept of remote workplace becomes more accepted. The size of a home will increase as the office is now the home and the need of a secure place without family interference and workplace interference with the family.
The large parcels of land that have been built as office places will need to be reconfigured. The apartment complexes either built or in stage of being built will need a new face in their future.
As old business models leave new business models will develop. With new models the cycle will return and homes will have a new face, a new interior and new functions for family and employees.
LONG TERM:
Silicon Valley has long been the area of growth due to its financial ability to create new businesses and the educational forces that help incubate those new ideas. Neighborhoods will change and so will schools and business centers. We are becoming adaptable. Shopping is easier online than in stores. Social discourse is as easy on Zoom or anyone of the other medias that are in place.
We now look forward to the week ahead to see if the termination and phase out of shelter in place will work, or will we return and face more uncertainties.
The future will have to deal with the virus and future of another virus and how to deal with it.
To date, California reported 88,107 case of coronavirus with 3592 deaths and 13.499 recoveries. Death by age is the most telling story. In the US, 33% of the deaths we age 85 and older. 27% were 75-84, 21% were 65-74. That would mean retirement homes and senior facilities were the most active areas for deaths from the virus. California counties to our east who sport +55 senior communities have had the lowest numbers in fatalities either in cases or deaths. During the pandemic more died in individually of Cancer and Heart disease. The Pandemic has taken 3rd place but 100 % of our economy. That does not make sense! Long term we must adjust public health to focusing on targets and most susceptible for treatment and prevention at a minimal cost to the economy as a whole
Gary
Real Estate is an Asset Class. As an asset class it has value from appreciation and income. It has value as a store of value. It has an important attribute no other asset has. It has security in shelter.
When any asset is looked at it has a value for 1. SHORT TERM, 2. INTERMEDIATE TERM, 3 LONG TERM. The ownership of Real Estate is for investors looking for income and appreciation, investors looking for Store of Value. The majority of real estate owners are for residential purposes. Not rental properties but for a home to raise family enjoy grand children and spend their later years together.
It is for the later I write this Blog.
It is so easy for either Buyer or Seller to be frightened by commentaries in the media. For example Zero Hedge wrote "Somebody is Dumping Everything" Mystery Investor Pukes $333M in Real Estate ETF in Dark Pool Trade. Key word is INVESTOR. Does that really mean anything for a personal home. Does it affect having a family BBQ for Memorial Day. Does it affect the newly weds moving into a home to start their lives together...NO!!!
When one looks at a residential property it must be viewed for the near term (<5 years), intermediate term (5-10 years), and long term.( 10-30 years plus) That applies to seller and buyer.
To the buyer is this the neighborhood they will live in for the long term. Or it is something they will own until their family grows and a larger home is needed. Or is it for the short term as the job may be only one of several stopping points in the challenges ahead.
To the seller is it the home they have outgrown. Is it the home that they must leave for career movement? Is it the home they can no longer care for.
SHORT TERM:
The housing market is recovering slowly in Silicon Valley. Tech companies dominate and have expanded their foot print. Foot prints that have expanded housing prices and cost of livings.
That foot print may get smaller. Shelter in Place has expanded the use of virtual meeting, tours and conversations. Technology has helped in creating an environment that will allow employees to work from home.
Mark Zuckerberg has said Facebook employees are moving out of Silicon Valley. He predict 50% of their workforce will work remotely in next 10 years. Currently 95% are working remotely. Some 65-75% of the workforce of Facebook have said they would move from the Bay area. Following suit with Facebook in remote work places is Sales Force, Twitter, Square and Shopify.
A new Pandemic Study by Cleaver Real Estate among sellers, buyers, renters gave a sense of their feelings as this lockdown enters it third month. Worry and concern are having a bitter impact on feelings. That is the sense of recession over a recovery. Leaning the feelings more in recession is the feeling of living costs without income or limited income; is having an impact on daily life.
For those buyers and sellers the short term is a better place of opportunity than the medium or long term. For the seller the price of listings have been declining, home prices from list have been declining. The declines are not universal. Many homes sell at or near list. They are priced correctly to the market. Pricing a home for sale is most important. Trying for the top is a waste of time. It will only lead to lower prices, greater days on the market, greater skepticism with longer days on the market with more price cuts until sold at a lower price than could have it priced properly.
This is the start of a buyer's market. Look at those homes that have had price cuts and look to make an offer. Look at homes priced below the market and look to a price you would pay no more than and put in an offer.
MEDIUM TERM:
The marketplace will adjust as the concept of remote workplace becomes more accepted. The size of a home will increase as the office is now the home and the need of a secure place without family interference and workplace interference with the family.
The large parcels of land that have been built as office places will need to be reconfigured. The apartment complexes either built or in stage of being built will need a new face in their future.
As old business models leave new business models will develop. With new models the cycle will return and homes will have a new face, a new interior and new functions for family and employees.
LONG TERM:
Silicon Valley has long been the area of growth due to its financial ability to create new businesses and the educational forces that help incubate those new ideas. Neighborhoods will change and so will schools and business centers. We are becoming adaptable. Shopping is easier online than in stores. Social discourse is as easy on Zoom or anyone of the other medias that are in place.
We now look forward to the week ahead to see if the termination and phase out of shelter in place will work, or will we return and face more uncertainties.
The future will have to deal with the virus and future of another virus and how to deal with it.
To date, California reported 88,107 case of coronavirus with 3592 deaths and 13.499 recoveries. Death by age is the most telling story. In the US, 33% of the deaths we age 85 and older. 27% were 75-84, 21% were 65-74. That would mean retirement homes and senior facilities were the most active areas for deaths from the virus. California counties to our east who sport +55 senior communities have had the lowest numbers in fatalities either in cases or deaths. During the pandemic more died in individually of Cancer and Heart disease. The Pandemic has taken 3rd place but 100 % of our economy. That does not make sense! Long term we must adjust public health to focusing on targets and most susceptible for treatment and prevention at a minimal cost to the economy as a whole
Gary
Comments
Post a Comment