Are home values really inflated?

For the 71st month in a row, the housing market experienced year-over-year gains. As of January, the median existing-home price for all housing types was $240,500, which was a 5.8 percent increase from January 2017 ($227,300). According to Bob Schwab from Finance of America, this may lead many to believe that home values are overinflated.

Schwab, and Zillow, disagree with that common opinion. Zillow says: “If the housing bubble and bust had not happened, and home values had instead appreciated at a steady pace, the median home value would be higher than its current value.”

I’ve pulled some information and graphs from Schwab’s article to help demonstrate why home prices are exactly where they should be. First, a graph showing actual median home sales prices from 2000 through 2017:

By itself, this graph shows home values rising early in the century, then tumbling down, and now climbing back up. This may give off the impression that a pattern is emerging, and another tumble is coming. But, if you look at this second chart, indicating where prices would naturally go with the market had there not been a boom and bust, you see something different:

The blue bars represent where prices would have been if they increased normally, at an annual appreciation rate of 3.6 percent. By adding that percentage to the actual 2000 price and repeating for each year, we can see that prices were overvalued during the boom, undervalued during the bust, and a little bit lower than where they should be right now!

All in all, thanks to Bob Schwab for pointing out that we should be comfortable with current home values, and understand that the market actually isn’t overinflated, based on historic appreciation levels.

Philz brings an energetic twist to WC coffee scene

In the plaza next to Genova Deli and CVS, the old Marie Callendar’s space has been overtaken and it couldn’t look any more different. Whereas Marie Callendar’s was your typical homey, but outdated diner, now the new space is full of color, music, art and mostly millennials sipping their craft coffee.

That’s right, the new coffee in town is Philz, a national chain that emphasizes creativity and friendliness at their locations. I went there recently and was amazed by how packed it was. In fact, it was difficult to even find parking in that massive lot because of it.

As with many coffee shops now, the walls in the sitting area were covered with art from a featured artist and the walls were as colorful as the baristas themselves. Between battling for tips (Destiny’s Child vs. TLC was the battle du jour on the tip jars when I was there), asking exactly what type of coffee I “felt like” so they could create the perfect concoction, and the sheer amount of joy they seemed to take in their work, I really had fun on my visit.

I ordered a Phil-tered Soul, and it was really delicious coffee. They take a little longer to make than most places because they only do pour-over coffee at Philz. Also, they have some small food items and pastries that looked delicious, I tried their zucchini bread – it had chocolate chips which I don’t particularly like with zucchini. I will go back but only on occasion!  Of course, as with all specialty coffee, they come with a hefty price tag of $3.95-$5.00 or more.

Open House at 407 Midway Pl. (Martinez) this weekend!

Come check out 407 Midway Place in Martinez this weekend for a home with great curb appeal! It’s situated on a cozy court and has a large, flat backyard with redwoods scattered throughout with enough space for a pool if so desired! An entertainer’s delight with plenty of privacy, good shade and stone retaining walls with landscaping, and a basement area with water that can be built for an outdoor bathroom.
In total, it is a 4-bed, 2.5-bath with vaulted ceilings, multiple decks, a formal dining room and a kitchen-family room open-concept combination. The master bathroom is delightfully decadent, and the half-bath upstairs also draws high praise.
 The home contains triple-pane windows, and welcomes in lots of light. An Owens Corning roof, new rain gutters, a high-efficiency water heater, and exterior paint creates the charming curb appeal. The landscaping in the front and side yards were re-done in 2014, and solar panels with a 20-year lease were added that year, too.
The aforementioned master bathroom was remodeled as recently as 2015, and an entertainment system with surround sound was added to the family room in 2016. The pictures, beautiful as they are, do not do this place justice. You have to swing by and check it out for yourself. You will be amazed!
The Open House will be held from 1-4 p.m. this weekend, on both Saturday, Mar. 10th and Sunday, Mar. 11th.

Newell Pathway in Parkmead to get a face-lift

About two weeks ago, the Parkmead Community Association (PCA) convened to discuss the crumbling granite of the Newell Pathway that kids use to walk to Parkmead, Tice Creek and Las Lomas. The path has been whittled away by rain and primarily the postal truck creating large ruts.

A few years ago, the PCA was able to repair a portion between Magnolia and the Tice Creek exit, but the entire thing is still in need of updating. Since people – especially students going to and from school – use the path daily, it has become imperative that the granite be fixed.

After many meetings and a walk along the path with the country engineers, who had conversations with County Supervisor Candace Anderson, she was able to secure one-time funding to repair the entire pathway. There were about 35 people in a meeting we thought were to discuss our options, however the county representative had a very satisfactory solution. There is still a need to find a long-term solution, but we have bought time with this outcome.


Country representatives Jason Yee and Mary Halle (a resident of Parkmead), as well as Anderson – her back is to us left side front row, were present at the meeting. Repair work will bring the water meters level, eliminate the puddles of water, and add to the surface of the decomposed granite.   Work is expected to begin sometime in April.

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Art Town: Water Light Plaza

As Walnut Creek continues to shove colorful apartment complexes into every available corner of commercial real estate left, we find ourselves more and more populated in this little town. However, with each new complex comes a new work of art.

As you can see in the picture above, this newest piece is attached to the back of a public parklet, called Water Light Public Plaza on Locust. The glass and water feature is a cool look, and accents well with the area itself. The entire little plaza is located in a courtyard as part of the new Lyric developments across from MoMo’s.

You can’t beat the location of these apartments or the Water Light plaza itself. I appreciate that it’s a cool little place to hang out when you’re wandering downtown and it’s too crowded to move or you just need a place to rest your legs. If you pick up to-go food, it might also be a good spot to plop down for a bite – think Vitality Bowl or the New Poke restaurant that just opened.

Also, you can’t deny how eye-catching the artwork itself is! The colorful mosaic pattern set over the black is really attractive, and the water feature at the bottom is unique. Just another great piece to add to the downtown Walnut Creek collection!

Good pizza hidden next to a high school?

There are a lot of great pizza joints in and around Walnut Creek. I’ve written about many of them in this blog, but most are also located right downtown in an easy-to-find spot. However, one of the best pizza in Walnut Creek is hidden in a tiny building right next to the main Las Lomas entrance!

If you want affordable combos and really great pizza, try Pan Coast Pizza! It’s a popular spot for high school kids after school lets out, and I can see why. They have a pizza, salad and drink combo for $9 and their large slices go for about $3 each. This place is well worth it.

I’m a huge fan of the cheese they use on their pizzas – it really just brings everything together. You can taste the quality in every bite. And it’s evident that the husband and wife duo who own and run the place have taken time to perfect their pizza.  They told me they get their cheese from Wisconsin and their tomatoes from Italy. I like the thin-crust style and my favorite is the cheese pizza.  They also serve strombolis, hoagies, salads, and more. Their motto is “a taste of the East Coast,” and they really mean it!

Julie and Robert have both worked in pretty much every cooking position there is, in states all over the country. They started in Pennsylvania, which may be where they get a lot of their inspiration from. They also both have experience working in acclaimed San Francisco restaurants.

Whatever they’ve done here, it is working out fabulously. Luckily for me, Pan Coast Pizza is just a short walk from my neighborhood, so whenever I am hankering for a slice, I know where to go. I give Pan Coast Pizza 5 Mt. Diablo’s!

Why higher interest rates are good

This may surprise you, but higher interest rates aren’t always bad! In fact, sometimes they can be really good for the real estate market. Jay Vorhees at JVM Lending gives us some good reasons why. I’ve summarized those points below with commentary.

After the most recent presidential election, interest rates went up 3/8-1/2%, and the real estate market seemed to come to a standstill. It scared everyone into thinking that higher rates would severely impact the market overall. But, it was really just “uncertainty” that kept everyone on the sidelines, and not the higher rates.

Rates might continue to rise, but that’s a good thing, and here’s why:

  1. Slowly climbing rates often push would-be home-buyers off the fence. Higher interest rates heat up the market by pushing people to buy sooner, rather than later.
  2. Higher rates give the Fed “ammo” for the next recession. One of the Fed’s most powerful recession-fighting tools is lowering rates. But, if rates are already low, that tool becomes worthless. To restore the power of this, we need higher rates.
  3. Retirees and savers get higher returns. Artificially low rates that benefit big banks and borrowers hurt savers who live off of their savings. The higher the rates, the better for retirees and savers.
  4. Banks lend more money with high interest rates. There is a much better incentive to lend when rates are higher. More economic growth, higher wages and more home-buyers result from higher rates, too.
  5. Stronger dollar and continued tamed inflation. A stronger dollar makes traveling abroad cheaper, investing in the U.S. more appealing, and importing goods cheaper. Higher rates also keep inflation in check for a variety of reasons.

Higher rates hurt mortgage companies that rely on refinance business instead of purchases, and it hurts home-buyers to the extent that their payments will increase.

But the payment factor is often overstated. A rate increase of 1/2% might push a payment up about $150 for a $500,000 loan. That is real money, but it won’t break the bank for most of our borrowers whose income is well into the six-figure range.

What are your thoughts and how would higher rates affect you directly?

Road Trips: Sutro Baths

Our road trip blogs have ranged far and wide over the months, but one easy, must-do road trip from the East Bay is a simple jaunt across the Bay Bridge to San Francisco! You can’t beat the beauty of San Francisco, which is truly one of the most spectacular places in the world, and right in our backyard.

Of all the cool things to do in the city, one of my favorite experiences is hiking around Sutro Baths at the furthest West point. If you drive in over the Bay Bridge (or, if you want to save some gas, take BART and then a city bus), follow directions to Ocean Beach and take in the sights and smells of the ocean (warning: it’s always windy!).

From there, you can walk up the hill past the famous Cliff House restaurant (their bar is actually affordable if you need a quick drink!). On the other side of that are the Sutro Baths. Back in the day, this area was a public bath house right on the ocean that look more like Roman ruins now than anything else.

Extend your day after exploring the Baths, by following one of the mild hiking trails next to the upper parking lot, which will take you through tall trees to the Golden Gate Bridge side of the peninsula. You’ll get a clear view (most days) of the bridge, the ocean and the Marin headlands.

And to think, all these picturesque views are contained in a tiny corner of San Francisco! If you’ve never taken the kiddos to see this part of San Francisco, I’d highly recommend it!

Va de Vi alley is a hidden gem in Walnut Creek

We talk a lot about the beautification of downtown Walnut Creek here. After all, it’s where we live, and where we love to live! Va de Vi, the excellent restaurant in the heart of downtown (across from Vineyard Vines and Rooftop), has a secret hidden treasure next to it.

Credit: EclipseDesign.com

If you’ve never noticed it walking by, or never taken a look after a meal at Va de Vi, you’re missing out. In the alley next to the restaurant, there is a beautiful sitting area and a huge tree, as well as some awesome art. This is my favorite part of the alley.

Olivia Kuser’s piece, “Shadowmaker,” is an enamel-on-metal piece that was inspired by the large oak tree just down the alley from it. Kuser likes to do her work in place to really get a deep feel for the image, and then takes it back to the studio to finish the art.

The slightly blurred image gives the impression of commonly-moving leaves. Kuser is a San Francisco-based artist who once created work about the marshes that used to encircle all of the San Francisco Bay.  As evidenced by “Shadowmaker,” Kuser favors simple landscapes that only have a few elements to them.

Her piece, combined with the beautiful alley itself and the towering oak tree and pond, makes eating at Va de Vi all the more special. It’s a hidden gem within the bustling downtown of Walnut Creek, and the perfect spot to stop and get away from it all for a few moments.