A quick visit to John Muir

A couple of weeks ago, I went to take a run in my neighborhood. I got about 10 yards from my house running with my sunglasses on, before I stepped into a small hole I hadn’t seen, caught the edge with my toe, and fell flat on my face. Not my proudest moment!

Anyway, after a zoom video with my doctor, she recommended an X-Ray, so off to John Muir I went. It wasn’t really a pleasant reason for meandering around the John Muir Hospital campus, but I ended up catching some pretty cool art.

I love this blue, meandering line of glass depicting a river that starts at the waterfall rock. When I first started writing this blog, I did a quick picture to ask if people could guess where it is, but decided it was better to go more in-depth. It really is a peaceful place to sit and take a lunch or a reprieve from a sick or dying family member’s situation.

The hospital’s namesake, John Muir, also has a statue in the roundabout of the campus. I took a few shots of that as well! Visits to the hospital aren’t really something people look forward to, but props to John Muir for decking out the area with some serene artwork to make it a better experience!

Think this is a housing crisis? Think again!

Economists are predicting an interesting forecast for the second half of this year. I have spoken to some people who have tenants who aren’t paying, and they believe in the next couple of months we will have a setback. July will bring corporate reporting for the second quarter and they now say we are officially in a recession that actually began in February before COVID. All of this is creating an interesting and volatile market. As the states continue to open up, there will be fewer people on unemployment. It will probably take a year or more to get it back to normal levels, but in the East Bay, the market is on an upturn.

File:Sign of the Times-Foreclosure.jpg - Wikimedia Commons

As my manager, Elias, wrote us in an email recently: “Educating our consumers on the local market, listing inventory, buyer activity, year-over-year statistics, and truly being [customers’] trusted advocates” are important in this time.

Here are some other reasons why we most likely will NOT have a housing meltdown:

  • According to the latest Wall Street Journal Economic Forecasting Survey (which polls more than 60 economists monthly), 85.3% believe a recovery will begin in the second half of 2020
  • Five of the major financial institutions are also forecasting positive GDP in the second half of the year
  • Four of the five expect a recovery to begin in the third quarter of 2020
  • All five agree a recovery should start by the fourth quarter
  • Overall, the vast majority of economists, analysts, and financial institutions are in unison, indicating an economic recovery should begin in the second half of 2020
  • According to Kristin we had a housing shortage before Covid and we still have a housing shortage and that isn’t changing anytime soon.

A side effect is all the new restrictions on showing a property and how it affects the consumer. We now have to send a form stating everyone is aware of the COVID environment, make an appointment for a specific time, not touch anything, wear masks, and only have two people (plus an agent) in the house at one time.

A recent experience with a client on a new construction purchase really highlights the inconveniences. They are not allowed to meet in person, and to view the new construction, you also need an appointment. They send the document via electronic signature, however, my client was moving from out of state where they are not wearing masks and have a more open policy. He was having a hard time reading it on his phone, he was in the middle of moving to the Bay Area, and thought, “when I get there, I will just sign at the office.”

That was his expectation, but the office staff was not expecting him to sign in person because they sent it electronically. They had to give him a mask, and it became a reality of unmet expectations on both sides. The take away for me is that nothing goes a planned. We have to be more fluid. And communication is key. Expectations have to be voiced, as nothing is done how it used to be.

On the state of things…

The murder of George Floyd has struck a chord with the world. It has created a spark, which has ignited the tinder ignored for decades. Unfortunately, unconscious bias, racism, and racial stereotyping exist. My hope is this movement will create the needed changes and initiate conversations for understanding and acceptance.

I am all for civil disobedience, freedom of speech, and the right to protest. There were thousands who came to Walnut Creek and peacefully protested. The key words are “civil” and “peaceful.” I deplore the few opportunists who choose to loot our cities. They dilute the message of the peaceful protestors and reinforce the opinion of those who are already biased or racist, and cause the police to be more vigilant. To be clear, I believe looting here and nationwide has mostly been done by outside agitators and opportunists who are not associated with the peaceful movement itself.

I live very close to downtown, and the night the looting occurred, I worried rioters would come into my neighborhood and I considered what I would do. The next day, there were some emails asking what we could do to keep our neighborhood safe if that happened. This photo was sent out. I suspect the police were preventing anybody from looting Kaiser, which is directly behind them, but also the main access to my neighborhood. The next night, when I heard helicopters, I felt safer and appreciated the police who are there to protect, though some heavy-handed police actions across the nation has made people skeptical about their intentions. The police, as a general entity, obviously have issues to fix. Their main duty is to serve and protect, and most do that admirably.

As a result of the looting on Monday, our beautiful town of Walnut Creek is boarded up. My heart also goes out to all the businesses who had to shut down or restrict their business activities due to the mandated shelter-in-place. They now have had to protect their businesses by boarding up the windows or repairing damage caused by the looting. The downtown area was closed off for a few days and there are very few who are wandering down there. Please continue to support them in whatever way you can. The day after the looting, many residents came downtown to help clean it up. Kudos to all who did. I only heard about it afterward – otherwise, I would have been there too.

I debated about posting this because there is fear in sharing it. Fear that I will say something wrong, offend somebody, or not say enough. I believe we all have a voice and we should express it when something is a concern and stand up for what is right. This is what protesting is all about and we should stand up for what we believe in. Our voices should be heard. Vote. Strive to make a change for good. Be heard.

I will end this with a quote by James Baldwin: “Not everything that is faced can be changed, but nothing can be changed until it is faced.”

How low can rates go?

Jay Vorhees at JVM Lending recently shared a great blog, which I have posted in its entirety below. As usual, I’ve added my two cents to the topic at the end. Hope you enjoy!

One of the most interesting aspects of the COVID-19 crisis is its effect on interest rates. In “normal” times, mortgage rates correlate closely with the 10 Year Treasury Bond. In other words, when the 10 Year moves higher, so do mortgage rates and vice versa.

Also, “the spread,” or the difference between the 10 Year Yield and mortgage rates in normal times averages about 1.5%, meaning the average mortgage rate is usually about 1.5% higher than the 10 Year Yield. Since the COVID-19 crisis started, however, the “normal” correlation and spread have disappeared.

10 Year Treasury Yields have plummeted much farther and faster than mortgage rates. In addition, mortgage rates don’t always move in conjunction with the 10 Year, and the “spread” between the 10 Year and the average 30-year mortgage rate has jumped to over 2.6%!

Mortgage rates remain higher than expected for a few reasons that I have illuminated many times. One reason is that lenders could not handle the onslaught of refi volume if they lowered rates any more. But the important reason has to do with risk. Mortgages are much riskier now because of unemployment, forbearance, and liquidity concerns; higher mortgage rates simply reflect that risk.

HOW LOW WILL RATES GO?

If the market returns to “normal;” if the 10 Year remains as low as it is now (around 0.6%+); and if the “spread” between the 10 Year and mortgage rates drops back to the 1.5% range, we could see 30-year mortgage rates drop another 1%!

Yes, that means 30-year mortgage rates as low as 2%!

SHOULD BORROWERS WAIT TO REFINANCE?

Absolutely not, and this is why.

First and foremost, the above scenario requires a lot of major “ifs.” And in this extremely volatile economy, anything could happen to derail the downward rate spiral, including inflation, new regulations or government actions, less competition in the market, renewed liquidity crises, and/or a faster than expected economic rebound.

Additional reasons to refinance now rather than waiting include: (1) most refinances are “no cost” so borrowers can simply refinance again if rates fall further; (2) borrowers can save hundreds of dollars per month by refinancing now at no cost, so why defer the savings? And (3) refinancing is relatively painless now with all of the new technology in place, so refinancing again should not be a concern.

This has been our mantra for years and it bears repeating – borrowers who wait for pristine market conditions (with respect to both housing prices and interest rates) often get burned. And that is because in this world of extreme volatility, nobody really has a clue what will happen.

Kristin’s take: I have had many conversations with buyers who are wanting to “wait and see,” and many keep asking if prices have come down. Prices have not come down (with the exception of the luxury market) and we are currently seeing multiple offers or properties pending in 5 days, especially in the entry-level market. Of course, it depends on the home: is it updated? Is it priced at fair market value or lower? And so on. I believe the window to negotiate or get a great deal was within the first 6 weeks of our shelter-in-place because there was so much unknown. For those who had a higher level of risk tolerance or just needed to buy a home, I believe hindsight will show they got a deal (comparatively).

Mike’s Bikes

I recently went looking for an open bike shop and found Mike’s Bikes. I drive by their store almost daily to work, and just being around town as they are in the Mercer building on the corner of California and Civic. The shop was founded in 1964 in Marin County (one of the first Schwinn shops!), and it was rumored that their location in San Rafael was home to some of the first mountain bikes in the country.

The Mike’s Bikes family has 12 Bay Area locations and prides itself on selling only bikes and bike accessories, unlike other outdoor stores. Co-owners Ken Martin and Matt Adams teamed up to buy the franchise after owner Dave Kaplan decided to retire. You can read more about them here.

I took a bike in that was gifted to me with a flat tire and in need of a tune-up. The person working there took my bike, filled up the tire to see if it was leaking, adjusted the seat because it was extended beyond the point of safety, and they didn’t even charge me! I loved the customer service at Mike’s Bikes and will be buying a new bike from them in the near future; thinking an electric mountain bike.

For those who don’t already know about the shop in downtown Walnut Creek, go check it out sometime! It really is a Mecca for bikers – both hardcore and casual. I know they’ll take good care of whoever comes through those doors or for now when you stand at the front door (dogs included – see the last picture!).

Qualifying for a loan after returning to work

Jay Vorhees at JVM Lending has shared another great blog, which I will share below. I did not include the last section, which is not applicable to my clientele, but you can read the entire thing in the link above. Look for my input at the bottom. As always, I welcome your feedback on this topic!

Many people are wondering how soon laid off and furloughed borrowers will qualify for mortgage financing once they return to work.

Loan Agreement Signature - Free image on Pixabay

Employment Gap Under Six Months

If the layoff or furlough lasts less than six months, lenders will be able to fund most loans as soon as borrowers return to work (for conforming, FHA, and VA loans). Some jumbo lenders, however, may require 30 days of job-seasoning before they will fund.

Employment Gap Over Six Months – Returning to Same Job/Industry

If a layoff lasts more than six months, things get more complicated. If borrowers return to the same job or a similar job in the same industry, they will be able to qualify for conforming (Fannie Mae/Freddie Mac) financing 30 days after they return to work, in most cases, with 30 days’ worth of paystubs. FHA and jumbo borrowers may require six months of job-seasoning, however.

New Job/New Industry

If laid off borrowers find new jobs in new industries, they will have to “season” their new jobs for six months in most cases (and up to two years in some cases) before they will qualify for any type of loan. The exception to this rule is for borrowers who recently graduated from college or any type of professional, training, or graduate program that relates to the borrower’s field in some way. Recent grads can usually qualify for financing as soon as 30 days after starting a new job.

Kristin’s Two Cents: Another topic that has come up is forbearance -a creditor’s temporary forgiveness of debt (i.e. to postpone your payment). Many think, “Hey, why not take advantage of not having to pay my mortgage for a few months?” even if they can, because there is no harm. Well, it will impair your credit (most will report it, you will be required to pay it back once the period is over – and with rates dropping, you won’t be able to refinance for one year after you have fully paid back the forbearance. Do you want to miss that opportunity? Click for more information about forbearance.

Spotlight on Brioche de Paris

On Fridays, I will be giving away a $25 gift card for local small businesses via a trivia drawing! All correct answers will go into a bucket, and I will draw out a winner. This will be posted on my Instagram and Facebook sites. Thus, I thought it would be interesting to interview the owners of these small businesses.

This week’s drawing will go to Brioche de Paris (see original blog). I had the opportunity to chat with the owner Wissem Kheriji, who opened his doors in September 2019. I asked what inspired him to open a French-style boulangerie? While his cousin, a chef, who had a culinary school in Paris was visiting, Wissem would show him around and they would stop to get coffee and pastries. His cousin was complaining that nothing was good by French standards (and if you have ever been to a Boulangerie in France, you understand why!). He thought Wissem should open a French boulangerie in the East Bay. His suggestion turned into reality. Wissem’s cousin is now his partner and his other cousin – who is also a chef from France – is the chef at Brioche de Paris, with a focus on the quality of the food!

Wissem graduated with a degree in Accounting, did a three-month internship, and found he hated being behind a desk. Thus, deciding to follow his passion, he got certified as a fitness trainer – Kheriji Kat Fitness. One of the hardest things he has ever done was to juggle two business. He eventually gave away his 34 fitness clients to focus on getting this business started and was gradually adding some clients back in when COVID-19 and sheltering in place hit.

Life Lessons/Upside: Working from 4 a.m. – 9 p.m. can put a strain on relationships. The shelter in place has slowed things down and required more time at home and an opportunity to reconnect. It also gave him time to slow down and rethink how to approach the business. His wife was doing all the accounting and also had another job. Now, it is time to hire an outside accountant.

I find it interesting that Wissem’s accounting background actually came into play in starting up a small business. My takeaway from this is that you should follow your passions and you never know how your background and experiences will be useful.

He believes he can weather through this time, and has become very involved with our community, helping first responders and promoting business in Walnut Creek. So let’s give back and frequent Brioche de Paris and any other of your favorite local small businesses. Don’t forget to play in the Trivia Quiz on Friday to win that gift card!


Searching for the best local Chinese food…

I recently ordered takeout from Peony Garden, which is right next to Las Lomas, across from Kaiser. It is always a search for the best Chinese food, because from different regions the flavor and dishes change. I have had takeout from Peony before and, for me, it was good, not great. I am not a fan when restaurants make sauces too sweet when they shouldn’t, such as on Kung Pao Chicken.

I ordered a lot of food thinking I would eat it over a couple of days because Chinese is wonderful as a leftover dish, but I found a hair in my asparagus beef and ended up tossing it. That said, I struggle to note that because restaurants are struggling and have had no issues in the past. Surprisingly, they have dim sum and some great appetizers, so I would love to hear your feedback.

It is super close to my neighborhood so very convenient, however, I’m still searching for that local Chinese restaurant that I completely fall in love with. If you have any recommendations, please let me know!

We are lucky to live here!

So, things will be a little weird for at least another month in California. If you’re like me, all this social distancing has started to wear on you both personally and professionally. Luckily, we live in a beautiful place with great weather!

That’s one saving grace – we are still allowed to go on hikes in the Open Space! Recently, I went on one of my favorite Shell Ridge hikes. It goes about 3 miles up a hill and rewards you with great views of the Walnut Creek/680 corridor. You may recognize the spot because it’s where a huge water tower used to be.

To get there, you come in at Marshall, turn left, and then go up and around the side (you used to go straight up the hill, but it’s been blocked off). To get to the highest peak, you backtrack at the top of the ridge. Check out these beautiful views!

I like to sit on the bench up there and take in the incredible landscape below. We really are so lucky to call the Bay Area home, even during a global pandemic. Take advantage of the outdoor opportunities, like this hike, if you can. But make sure your eyes are peeled – it’s rattlesnake season up there!

Art Town: Re-visiting the “Folded G”

A while back, I shared an Art Town blog about the deconstructed “letter G” statue near the BART station. I had a little bit of information (included in that link) about the creator of the sculpture, but I received a comment on the blog shortly after posting regarding the artist and the piece!

It came from a reader named Rob, who wrote: “This sculpture is painted aluminum. A few years ago, it was painted a steel grey. It’s a deconstructed letter G, from the alphabet.” He also included the artist information (Fletcher Benton), date of creation (1984), and more.

So, I reached out to Rob via email and asked how he knew so much about the piece that I couldn’t find a lot of information on! He wrote back with an interesting story and connection: not only was he an artist himself, but Benton, the artist of the piece in question, was his sculpture teacher in college!

Small world, huh? It turns out that Rob works at SFMOMA and had some information on another piece in the area I was curious about. We’ll save that piece for another Art Town post, but thought you’d enjoy revisiting this one and hearing that story!