Los Panchos Opens In Danville

Los Panchos opened in Danville, with the same menu they use in Pacheco (but with more seating and cocktails). Los Panchos is a staple for my crispy taco addiction, so I wanted to check out this new location and compare and contrast for myself! Here’s a previous blog on the taco hotspot.

TripAdvisor

I tried the two-item dinner plate with a taco and enchilada, as well as a side of rice and beans. A pretty standard order, but happy to report that it was just as good as the food in Pacheco. The biggest difference from their location in Pacheco is Danville serves alcohol and has way more seating. Pacheco is really a to-go restaurant. However, the last time I was there, there was a sign saying they were moving over by DVC, but I don’t recall the new street or moving date and nothing has been updated on their website. Probably a smart move with all the DVC students. I wonder if that one will have more indoor seating and margaritas!

The convenient thing is that now that it’s in Danville, those of us living in Walnut Creek have two choices to go get some of the best Mexican food around. One last note: Maria Maria closed and El Charro, which closed in Lafayette last year, will be opening January 27th at the Maria Maria location of 1470 N Broadway. I have always loved that patio, we will have to see about the food.

Have you ever been to the Los Panchos in Danville? Any thoughts on how it compares to the original location? Share with me in the comments!

The Housing Inventory Crisis, Explained

Jay Vorhees at JVM Lending wrote a blog about the “Housing Inventory Crisis” recently, and I wanted to share a lightly edited version of it. Read on below:

Picture yourselves walking into your local Whole Foods and seeing 2/3 of the shelves entirely empty. That is exactly the state of the single-family residential real estate market today, according to Jason Hartman, a true expert when it comes to residential real estate.

aerial photography of rural

Mr. Hartman was recently on the Rebel Capitalist YouTube show making this point, while also discussing real estate in general and why he is still buying. There are currently only 380,000 homes for sale in the entire country, per Mr. Hartman, which is less than 1/3 of our normal inventory of 1.2 million homes.

This massive inventory shortage both drives up prices and makes it increasingly difficult to even find a home – as most of us in the real estate and mortgage industries know well. So, why is inventory so low?

Builders are not building. I have mentioned this many times in previous blogs, but builders are bringing some 500,000 fewer units to market each year than they were prior to the 2008 meltdown. Freddie Mac says that we are “underbuilt” by 3.8 million units right now – and there are many reasons for this.

Starter homes are not profitable. In Northern California, it costs a builder $170,000 on average to prep a single lot for buildings (for permits and regulatory compliance) which is considerably less than the $6,000 it takes in Tennessee. And, unfortunately, California is not alone. When you couple these costs along with all of the other environmental and safety regulations (low flow water; insulated windows; fire safety; etc.) and inflated material and labor costs, starter homes are nearly impossible to build at a profit.

Labor shortage. This is a more recent phenomenon that was fostered by COVID and government policy, but current labor shortages are significantly exacerbating supply problems.

Millennials getting old. The oldest millennial is now 41, amazingly. What this means is that the largest generation to surge through our economy ever is now hitting its highest earning potential and thus buying homes at the fastest pace ever (in contrast to 2008 when the homebuying demographic was at its lowest point). This is a major reason inventory is getting mopped up.

Investors galore. Mr. Hartman reminds us that “buy and hold” single-family real estate investing is a relatively recent phenomenon, as it largely did not exist prior to the 1950s. But now, both individual and institutional investors are buying and holding real estate at levels never before seen, as both groups chase inflation hedges as well as higher and safer investment yields.

man in black shirt sitting on chair near white wooden house during daytime

Buyers awash in cash. The video linked above also discusses the massive influx of cash into our economy, as there is currently $3.6 TRILLION sitting in checking accounts compared to only $1.2 TRILLION prior to the COVID crisis. When buyers have that much cash, they are more willing to bid aggressively and to just buy more homes in general.

This is what I found most encouraging when it comes to our mutual clients and their concerns about a bubble: Hartman, who knows more about residential real estate than any of us, is still buying like crazy; he has made 11 offers in the last two weeks alone.

Why? The millennial homebuying contingent will not peak until 2026, the inventory problem is not going away, and inflation! To repeat my inflation-hedge mantra: Housing is a hard asset and a natural inflation hedge; rents go up with inflation, making investment housing an even better hedge; and 3o-year mortgages are an “asset in an inflationary environment,” as I explain in this blog.

Kristin’s take: Coulda, woulda, shoulda. So many people sat back because, over a year ago, prices were too high. Now, they’re even higher. I also know many buyers that have been priced out of the Bay Area and have moved out of the area altogether. We also have an added issue: there is very little land to build on. It is usually tear-downs or flips, or you have to go farther out for new construction. As Jay notes above, a mortgage can be a fixed cost, something you know you’ll pay every month. When I bought my first house, I felt we were treading water to my upper lip. Within months, it all normalized. Sure. I could not go on the big vacation that year, but now, 21 years later, it was the best investment I have made. I can’t imagine where I would be if I had followed my divorce attorney’s advice not to buy out my ex-husband 12 years ago.

Time To Take A Moment

Time to take a moment and experience something new! Take a trip, go somewhere new, or just see the old in a new light. The Sierras got dumped with snow the week of December 13th and continues to get pounded with new storms.

That first huge drop of snow came just in time for a white Christmas. This is my New Year’s Wish: try something new, get outside (even in the snow), and spend it with people you love. Look to an even better 2022.

Initially, everything looked great with an early snow dump before it all melted. I watched the forecast and Mt. Rose webcams for weeks with a dread setting in for an El Nino year. Then, 100 inches (or more than 8 feet!) of snow settled into the Sierras two weeks before Christmas.

I chose to run to the mountains and get my first ski runs in for the season. Carpe diem. It was a beautiful day with an inversion in Reno. Mt. Rose was actually warmer than Reno, and I spent the day with good friends who share my love of skiing. I took a few moments to snap pictures that make me feel graced with contentment.

A snipped of Tahoe, a sweeping view of Reno from the highest peak, friends heading for a run down Northwest, icicles in downtown Truckee, and, finally, an old red truck upon my return to Walnut Creek decorated with the Christmas spirit. Be bold, be present, be authentic! Onto 2022 to an amazing, adventurous year.

Why You’re Getting Unsolicited Offers On Your House

Recently, on BHG.com, there was an article I found both timely and interesting. It was about why you might be getting offers on your house, even when it’s not for sale. Personally, I get these calls all the time. All I have to say is, “I’m a realtor,” and most hang up on me. One asked if I have any coming off-market fixers.

Anyway, read on below and see what you think, and how you should handle these unsolicited offers if you do receive them. You can also read it at the link I posted in the opening paragraph.

gray wooden house

The housing market has been on fire since 2020, and experts are predicting that 2022 will continue to see high competition and low inventory. As a result, homeowners can expect to receive offers to purchase their house—whether or not it’s actually for sale. Although these offers often tout enticing perks, like quick cash payments, there’s usually one big drawback: they typically lowball the price. We asked real estate professionals across the country what you should do when you get an offer on your unlisted house.

Why am I receiving offers to buy my unlisted house?

“Unsolicited offers are quite literally offers to purchase your home without you listing it or even talking to a real estate agent about listing your home,” says Georgia-based realtor Tim Grant. These offers to buy unlisted property come in many forms, from mass-produced postcards and spam-y text messages and phone calls to hand-delivered flyers and knocks at the front door. Although it’s a standard real estate tactic, homeowners are experiencing it more due to the current housing market.

Most unsolicited offers come from investors (both large companies and individual people) looking for opportunities to make below-market purchases for resale profit. These investors use many strategies, such as targeting properties through public information like online real estate listing services and tax, mortgage, and foreclosure records, as well as sending out broad offers to every house in an area. “They do this because they need an asset to invest in, and there aren’t very many for sale right now,” says Katharine Davis, a realtor in Jacksonville, Florida. “Also, this type of marketing is easy. For every thousand or so contacts, they get 1-2 yeses,” she says.

“Now, with inventory so low, everyday home buyers and their agents are using the same playbook,” says Grant. These buyers are actually interested in occupying your house. They are seeking off-market sales to avoid bidding wars or secure a home in a sought-after neighborhood, school district, or otherwise desirable area that has low (or no) available inventory.

Evaluating the Offer

If the house is unlisted and the homeowner isn’t interested in selling, what makes an unsolicited offer appealing? It’s usually attention-grabbing promises of quick, large cash payments and a fast process. They might also offer to cover necessary property repairs or assume closing costs. But despite the immediate appeal, the offer should be critically considered. 

Regard initial details with skepticism—they’re not set in stone.

According to Gwyn Ice, a real estate agent practicing in Ponte Vedra Beach, Florida, the details of that initial offer are subject to change. For example, Ice says a property inspection is likely to drop the sale price and additional fees can impact the seller’s earnings. Plus, there’s financing to consider: price can take a hit if an appraisal finds the property to have a lower value than the initial offer—and even if it’s a cash offer, the money has to be there. Offers that promote closing in a certain number of days might also not be guaranteed.

trees beside white house

Consider the source of the offer.

Generally, these offers are legitimate and not scams to get money or property from the homeowner. However, it’s still important to look into the source of the offer. Tim Knuth, a Milwaukee-area broker, notes that some unsolicited offers come from unlicensed persons or entities rather than regulated real estate professionals. In some extreme cases, Knuth says entire parts of a real estate transaction can be left out of these interactions, such as skipping the title transfer. Dealings with these individuals might also be more vulnerable to theft via wire fraud and email scams if they use common, less secure methods for requesting and transferring funds.

On the other hand, offers from an individual (or real estate professionals acting on their behalf) typically align with a traditional on-market selling process. “These offers are usually prequalified,” says Eileen Lacerte, a broker in Kamuela, Hawaii. “In many cases, they are cash buyers or at least have a pre-qualification letter from a lender.” Lacerte also notes that these offers are more likely to meet fair market value for the property.

Take a hard look at the offer price.

For investor-driven offers, the offer price will be quite low. Their broad marketing approach means their offer likely isn’t property-specific, and their goal is to make a profit, so you can guarantee it will be lower than an on-market evaluation. “These types of buyers are relying on your limited knowledge of the current real estate market,” says Lexington, Kentucky, realtor Kim Soper. While most people are aware of the current housing market, they might not realize the impact it’s had on their property. “With home prices skyrocketing—sometimes over 20% in the last year—you may be surprised to learn that what looks like a really great offer may be pretty low,” says Davis.

Remember you’re moving.

Don’t forget that if you decide to sell your home, you still need a place to live. This might not be a concern for someone with a second property or family with space to spare for a while. But for many homeowners, it means arranging financing and entering the competitive housing or rental markets. Does the offer do enough to offset the time, energy, and incurred expenses?

Determine Your Priorities

For many people, the convenience of an off-market sale is highly attractive. “No prepping the house for sale, no showings, no strangers, no open houses, no failed contracts—you can even choose your closing date,” says Davis. A large sum of quick cash also has appeal, while others are interested in having a way out that won’t require renovations or necessary repairs to make the house marketable. But if getting the best price or recouping the value of the property is your priority, an off-market offer—especially one from an investor—is not the right route. “As a seller, if you were to accept one of these unsolicited offers, you are potentially missing out on tens of thousands of dollars and selling your home below its true value,” says Grant.

What should I do if I’m interested in an offer on my unlisted house?

“When someone makes an unsolicited offer on your house, you are in the position of strength,” says Davis. Knuth agrees. “Selling a house off-market can be a win-win for both the seller and the buyer—if the seller knows what they have,” he says. Real estate agents warn that homeowners are susceptible to being financially taken advantage of with an unsolicited offer. Examples include accepting a drastically under-market value, paying costs that could have been covered by the buyer, or through “wholesaling”—when a proposed buyer actually arranges for the property to be purchased by a totally different buyer at a higher price than what was negotiated with the seller, thus willfully undercutting the homeowner and pocketing the excess money for themself.

Homeowners considering an unsolicited offer fare better with a real estate professional on their side. “Sellers should seek some sort of professional advice before accepting an unsolicited offer,” says Lacerte. “Legal advice and a real estate market analysis will go a long way in avoiding regrets.” A pro can help identify an appropriate value for the property, as well as represent the homeowner’s interests by negotiating terms and price.

white wooden house near green trees during daytime

According to Soper, engaging a professional early not only lets them evaluate an unsolicited offer, but they can also help determine if selling is the right move for you at that time. She notes another benefit is having someone ready to help find your next home if you decide to sell. Knuth also recommends getting someone on your side before responding to the unsolicited offer, and he suggests letting them do all the liaising with the potential buyer. But even if you’ve already been communicating about an offer on your unlisted home, Knuth says it’s not too late to engage a professional. “If telling someone you’re bringing a realtor on board halts the process or they encourage you not to do it? That’s a big red flag,” says Knuth. In that case, you should be very wary of the offer and the buyer.

How to Turn Down an Unsolicited Offer

If you’re not interested, you don’t have to respond! This is especially true for impersonal pitches that come from large investors—though you might want to reach out if they offer an option to remove yourself from future communications. Knuth recommends the Do Not Call Registry is another way to cut back on unsolicited offers. If the offer comes from a local buyer or real estate agent, a reply is appreciated. “A polite, ‘Thank you, I’m not interested at this time’ usually is the response,” says Lacerte.

Holiday Outreach For The Homeless

Every year, I try to do some volunteer work to benefit the homeless in the Bay Area. This year, I worked with Hope 680 and Trinity Center. Trinity used to want coats and miscellaneous clothing items, but they are now a bigger organization with a list of items on Amazon that you can donate to and of course they still accept gift cards and cash.

I can’t really know whether Trinity received any items from the outreach I did, but I hope so! I did have a lot of neighbors who dropped off blankets, sleeping bags, coats, and socks for Hope 680. That organization partners with NorthCreek Church on Ygnacio Valley Rd., which is where I dropped off those donated goods.

Hope 680, a Christian non-profit ministry in Concord, is an independent entity partnering with local churches to provide food, prayer, coats and blankets. They are dedicated to the vision that every homeless person in the 680 corridor experience love and have access to services.

At Trinity, they collaborate with the Walnut Creek P.D. to form a Walnut Creek Homeless Community Task Force to make a positive impact in the area’s homeless community. If you have the time and means, please give to a charity of your choosing this holiday season! Wishing you a Happy Holiday season and a moment to reflect on how much we have to be thankful for.