Is It Time To Cash Out Of California?

Cashing Out of California- Is Relocation the Ultimate Way to Beat Pending Real Estate Fluctuations?

Homeowners in Southern California are certainly well off as each year the price of their home continues to climb, but that value in other real estate markets is borderline uncanny.  What the average Linda Vista home in Pasadena sells for in summer 2017 equates to acres more in land, thousands more in square feet, a fraction of the traffic, and a comparable quality of life in dozens of other cities in the States and worldwide.

Pasadena home values are at an incredible 15-year high. Back in the summer of 2002, the median home price in Pasadena stood at $365k.  Today, in the Fall of 2017, the median home price in Pasadena is a towering $820k.  Even buyers who purchased their Pasadena home in early 2009, after the post-recession low when the median price was $472k, are sitting on substantial equity.

Although real estate prices always fluctuate and there is no way to predict the future, we can look at the experts for insight.  CoreLogic, a real estate data powerhouse suggests the rapid growth may be coming to an end. CoreLogic Chief Economist Frank Nothaft states “You can’t have house prices grow at 7% year after year, when income growth is 2-3% a year.”  Though sellers are realizing serious gains from selling their homes at this 15-year market high, lack of affordable housing may very well cause the market to level off going forward, shrinking the gains sellers are currently pocketing.

I asked Bill Podley, my broker, four time Pasadena Foothills Association of REALTORS President, and with over 43 years in the business, what he feels the future of local prices will be.  He offered:

“While demand seems to be greater than supply – and we don’t see that changing anytime soon – we do believe affordability issues will dictate buyers pulling back if prices continue to increase at the pace of the last few years. There is a limit to what people can afford to pay for homes and there is a natural ‘governor’ on prices if they climb beyond the financial means of a majority of homebuyers. My sense is that prices will level off in the year ahead with appreciation matching a more typical annual increase in the 3-5% range.”

Hitting the high-water mark for local prices make many homeowners ponder selling, but buying back into the same regional market doesn’t reap a huge financial reward. However, “Cashing out of California” by relocating to another state can. By relocating, a seller can most often easily afford a wide range of move-in ready homes in an ever longer list of potential cities and neighborhoods. In fact, relocation is more common than you think.

Los Angeles county saw 88,000 residents move to other areas in 2016.  Two of those who left were Bill Clifford and Julie Titus.  Newlywed and happy in their downtown LA condo.  They along with their pet St. Bernards, Pancakes and Smoky, enjoyed city walks, the new restaurants, and an active night life.  Yet this foursome yearned for open space.  Home shopping in Los Angeles proved challenging, small lots, low inventory, and high prices limited their options and made relocation a strong consideration.

With family in the Pacific NW their search brought them to quaint Ashland, Oregon.  They quickly fell in love with the city, its farmers-markets, plentiful hiking, and friendly inhabitants.  The decision to move was an easy one.  After renting for a year they listed and sold their condo in downtown LA.  The near seven figure result of the sale allowed them to put just over 50% down on their new home in Ashland.  Bill and Julie now enjoy their four bedroom, two bath house with 2,150 square feet and a half acre of land just outside of town.  Thriving culture, organic farming, and home to a renowned Shakespeare festival, Ashland offered them a taste of culture they had grown accustomed to.

Bill and Julie are not alone.  Altadena residents, Jon and Cynthia Wargo, also embraced relocation and a major real estate windfall.  Faced with job relocation to Charlotte North Carolina, the Wargos cringed at letting go of their classic craftsman.  After a brisk sale for $975k they were able to to buy 4,000+ square feet of home on a lake in Charlotte for under $500k.  Ranked number 14 of the top 100 places to live in the US by US World News Report, Charlotte is home to 100-acre Freedom Park, a multitude of museums, and a thriving city center.

Empty-nesters looking to right-size, advancing options in tele-commuting and those in need of more space can relocate with a significant benefit to their bank account.

With the average price for homes sold in Linda Vista in the summer of 2017, we see an average. The substantial amount of money that can be gained from selling your Linda Vista home could equate to an amazing property in another progressive city and still leave hundreds of thousands landing into your bank account. But where do you go?

Finding your Ashland or your perfect Charlotte will take a little research.  US News and World Report helps by publishing their top 100 cities to live every year.  To determine this rank, they look at the largest metro areas for job markets, cost of living, crime rates, education quality, top notch health care, and more.  Each category is then weighed against survey data from people across the nation who have been asked what is important to them when considering to move to a new city.  A simple Google search can shed honest light on the many options one has.

If you are a fan of culture and hip city living there is Austin, Texas.  If your dream is to hike, fish, and hunt every day, there is Denver, Colorado.  History buffs and major patriots will love calling our nation’s capital home.  If you need down-home friendliness, Fayetteville, Arkansas could be the home for you.  Those drained by the heat will quickly embrace Seattle, while those who bathe in the sun will be enchanted by Phoenix, Arizona. For an example of what your Linda Vista real estate dollar could get you in one of these cities see my relocation page for some impressive examples of what could be possible. So whether you need land or lifestyle, there is a city for you.

Relocating to a new city is no easy task.  We’ll leave the discussions with friends and family up to you, but through the Podley Properties Relocation division, we can easily connect you with a vetted local real estate expert in any town from Boston to Barcelona.  Over the past 40 years Podley Properties has helped hundreds of Pasadena families relocate to amazing cities all around the globe.  If you are considering relocation and need guidance or insight on selling your local property, feel free reach out to me, and we can start the conversation.  I have also compiled a compelling preview of properties from other out of state markets that are below the average value of a Linda Vista home on the Linda Vista Life website, and they are stunning.

As The Rain Falls, Real Estate Prices Follow- Top Tips For Buyers This Winter

We have all heard that home prices drop in the winter season but how true is that for Pasadena? Let’s see how true it is, also why it is, and how you, the home buyer, can put it to practical use.

HOW REAL IS A DIP IN PRICES?

Real Estate sales data proves that home values do in fact drop in the months of November, December, January, and February. Diving into the data from CoreLogic we can look at homes that sold in the city of Pasadena over the past five years.  Focusing in on homes under the $1.25million price tag we can clearly see that the average sold Price Per Square Foot has consistently dropped every winter since 2012. Not only that, these lows are never again seen.  Winter prices are truly the all-time low.

2012-2017 $1.25M> Sold PPSF City of Pasadena Only

Ok, we know there is a dip, but why, well a perfect storm of factors are at play.

WEATHER:

While the winter weather in Pasadena is mild in comparison to the rest of the US, it is all relative. Cold temps in the 50’s will hit us fair weather people and our thin blood. We hunker down when it rains, and snow-capped  San Gabriel mountains is cause for apocalyptic concerns in many of us. It all equates to fewer people out shopping for homes, and less demand means the pricing power shifts slightly to the buyer.

HOLIDAYS:

Would-be home buyers shift their focus to gift giving, making travel plans, and attending holiday get-togethers. Fewer buyers mean less bidding wars.

SELLER STATE OF MIND:

Houses that list in winter can also indicate a seller that is less motivated by profits but a expedient no hassle transaction. This could equate to less haggling and tiresome negotiations.

PROPERTY INTEGRITY

A property on the market in the winter months can’t hide what bad weather does to it, these defects can result in significant reductions in the final cost of the home.

Note: the one downside to taking advantage of Winter buying is that options are limited compared to the peak season. If you are dead set on a specific home style, very specific features, and have very little leeway in what you seek, you will grow frustrated quickly. Those with flexibility will reap the rewards.

SO, MY TOP SEVEN TIPS ON WHY BUYING IN THE WINTER IS THE BEST:

1.    Don’t Be Afraid of The Rain.  I won’t be, and a seller that sees you aren’t afraid either will know that you are serious.

2.    What Does Winter Weather Tell You? Don’t skip open houses during bad weather. A home’s most honest condition is in the winter. You will see things you wish you did. Hot and cold spots in the property, leaking roofs, and water drainage is all evident only during winter conditions.

3.    People Are Friendly. Holiday cheer, regardless of religion, is synonymous with this time of the year.  Negotiations go smoother, transactions happen with less stress.  People are generally good at this time of the year.

4.    Set up Listing Alerts.  You will want to move fast.  Set alerts both on the Zillow mobile app and definitely through me. Your phone will push real-time updates to the area you desire, my alerts will be more granular and scrub out problem properties resulting in less wasted time.

5.    Hire me as your Buyer’s Agent. I cost you nothing, I literally work for you for FREE (I am paid by splitting the commission that the seller pays). In return, I am your guide for showings and neighborhood knowledge. I too am your advocate for negotiations, mountains of paperwork, and your lifeguard for the endless pitfalls that can derail a home purchase. In the slow season, you have even more of my attention.

6.    Mortgage Rates Will Go Up Next Year.  Rates are low and they will go up, we know this and we have seen some of it already. Get Pre-Approved now and your winter offers will be taken seriously.  Plus you will know exactly what you can afford.

7.    Motivated Sellers. Listing in the winter is usually a sign that sellers have an urgency to sell. Less back and forth on pricing and repairs, a cleaner and cost-effective transaction should be the result.

1st Annual Linda Vista Five Acres Toy Drive

Where has the time gone!?  The year flew by and the holidays are already upon us (just turn on your FM radio and the holiday music is on repeat, something I oddly look forward to each year).

To celebrate the holidays this year, I have teamed up with the kind hearted souls at Five Acres.   Five Acres is a Pasadena/Altadena-based orphanage that houses eighty children and supports another 100+ families in the local area. 

The children that are supported by Five Acres are all the result of some sort of crisis, and for a child it can and most often does, affect them for life.

Five Acres tries hard to make life comfortable for these children and envoke happiness whenever they can.  The holidays are a great time to give them a little escape into the beauty and kindness of the world.

With this in mind, we have embarked on the first ever Linda VistaToy Drive and we seek your support.

You will be receiving notice inthe mail about the Toy Drive program and I will be door knocking in the neighborhood to generate awareness.  It would be great to get your support for these very deserving children.

For more info on the Toy Drive and to schedule a pickup date go to the Toy Drive Page.

Pickup dates: December 5th or 6th 2017