McKae Properties Real Estate Market Commentary

Did you ever think you would find yourself reading an article on "Pandemic Real Estate Trends"? This year has been full of surprises.  The Luxury Real Estate market is fortunate to have seen steady growth for 2020. Rather than fall apart, the luxury real estate market quickly adapted to the situation.  There is now a clear pandemic real estate trend emerging.  The real estate pandemic market is evolving as it begins to reach a state of more certainty. There is a new demographic group forming, "Trail Blazers".  Trail blazers, like our forefathers are choosing housing locations based upon family, health, lifestyle.  They adjust that to their business or work proximity.  These "trail blazers" are one of a group composed of: Explorers, New suburbanites and Resort buyers. EXPLORERS: (Trail Blazers) they tend to be younger than 39.  They are ready to seek adventure outside the big cities and suburbs.  They want to stretch their dollar and they value life experie

The Twilight Zone  (marketed as  Twilight Zone  for its final two seasons) is an American  anthology television series  created and presented by  Rod Serling , which ran for five seasons on  CBS  from 1959 to 1964. [1]  Each episode presents a stand-alone story in which characters find themselves dealing with often disturbing or unusual events, an experience described as entering "the Twilight Zone," often with a  surprise ending  and a  moral . Although predominantly  science-fiction , the show's  paranormal  and  Kafkaesque  events leaned the show towards  fantasy  and  horror . The phrase “twilight zone,” inspired by the series, is used to describe surreal experiences. (Wikipedia)" That, I think, aptly describes our situation regarding the current pandemic.  We have experienced disturbing and unusual events that have put us in a surreal state-of-mind. Let us review these issues to date: "California Love it and Leave it!" This was from an Opinion section

 Depending on the party affiliation the reader may have, they can assign the good and the bad.  The Ugly has three points to it. The first part of Prop 19 is to allow tax transfer of 55 and older when buying a new home.  To offset the property tax loss is the curailing of separate tax breaks to inherited property in which the heir would obtain a pass through the property tax basis of the deceased parent.  This loss is estimated to bring in another $11 billion to the coffers to schools, local governments and state with a big portion of the funds going to firefighters.  The transfer part is a benefit most +55 would use.  Sell your Silicon Valley home to move into a planned community with Golf and senior enjoyments on average will cost less than the tax transfer benefit.  So the real ploy was to get the first part of Proposition 13 cancelled out, inherited values.  Next to fall is the rest of Proposition 13 on residential homes. As to the heir's loss the consequences are yet to be see

 The Lock down is now beginning to hit various real estate markets.  Follow that up with various real estate ballots which can do more harm than good. Bay Area Hotel Loan woes are intensifying.  Five Hotels in the East Bay, South Bay, and San Francisco all deemed luxury, high end lodgings are suffering severe financial difficulties per the Thursday October 29th issue of the Mercury News.  What the Pandemic hasn't shut down the ballot measures could.   Proposition 15 will tax commercial properties at market; rather than, the Proposition 13 rules of the past.  This passage will put Proposition 13 for residential in the target next.  Prop15 will raise a pittance of $11 billion of so.  A far cry from the deficits the State of California and counties are facing.  I doubt if raising taxes will replace the loss of business the shut down has created.   Another Ballot measure will stop the transfer of property taxes upon death to heirs.  Under the present law the parents property tax remain

 I recently spoke to a few buyers.  They had the attitude that we will see a bust in real estate for a sundry of reasons.  Yes, people are moving out of state and the area.  Yes, the rental market is collapsing.  Yes, prices of being cut, some drastic and some minor.  Others opine that the Democrat sweep with raise taxes, destroy high tech. Still other like to look back at the Financial Crisis of 2006 and think this is the model of the near future crash like 2006/07. So sorry to disappoint you.  I agree that there are a number of factors that can weigh on the real estate market.  They a not deal busters.  The key is interest rates.  They are  just too low and the Fed is willing to fund capital into the system.  Congress too is willing to send checks and fiscal support to the American Public  That does not seem to me to be the making of a collapse or bubble busting.   Near term I do believe you have seen the drive upward in prices have ceased and the trend is come off the top, but no ne

Joshua fought the battle of Jericho and the Walls came tumbling down.  For as long as I have been a residential real estate agent the walls of Silicon Valley were impenetrable to the various market and economic cycles that threatened home prices.  The East Bay and communities around us saw prices decline Silicon Valley remained strong.  It was like a wall that surrounded it.  Just as the Biblical Walls of Jericho came down so are ours. I have written in the past of the immigration of residents as the pandemic began.  Employers embraced work from home and as they did employees began to look at greener more affordable pastures. This weekend's San Jose Mercury News and the San Francisco Chronicle have finally put the fact on front pages. It started with Marisha Kendall's article..."Santa Clara County properties valued at $553B before pandemic".  "We have peaked" said Santa Clara County Tax Assessor Stone.  "Next year, Stone expects to see even more propert