How Natural Disasters Affect The Market

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My writer and his family were startled awake by a storm that carried much more power than expected last week. They live in Asheville, NC, one of the hardest-hit areas by Hurricane Helene. Though he and his home escaped any major damage, his entire neighborhood was filled with downed trees, smashed roofs, and other destruction.

*The worst of the damage to my writer’s home in Asheville: a smashed A/C unit, a fence, and one gutter. He says they are much luckier than most people they know in the area!*

Here in California, we deal with the effects of wildfires in many of our communities and live amid the fear of “the big one” hitting a major fault and triggering a massive earthquake. Beyond all the loss of life and property that results from these disasters, the real estate market can take a big hit. Here’s some info on how those markets are affected, paraphrased from this real estate blog:

There is typically a sharp decline in property values immediately after a natural disaster. Homes can suffer serious damage and be in need of repair. Those repair costs, plus a perceived increased risk of future disasters, diminishes appeal and demand. If many in the area were underinsured or uninsured, there could be financial difficulties that lead to foreclosures and an even longer-term depressive effect on market prices.

Of course, investors might see a place hit by disaster as a strong bet for long-term recovery and appreciation and could swoop in and purchase properties at low prices. This can provide much-needed capital for rebuilding efforts but also lead to gentrification and displacement of residents who are now priced out of their communities.

In the long term, markets tend to adapt to the reality of natural disasters, including new building codes and zoning laws to mitigate future risk (think, elevating homes in flood-prone areas or enforcing stricter fire-resistant materials in wildfire zones). That can lead to increased building costs likely passed on to buyers and raising overall market values.

Finally, how quickly and competently the government responds to a natural disaster has a huge influence on the market’s trajectory. Timely and robust support can help stabilize markets and reassure potential buyers, but the opposite response can exacerbate the negative impacts on property values and investor confidence. If the variables align positively, a destroyed market can bounce back, sometimes even stronger.

One other issue the housing market in California is currently facing is the lack of insurance companies willing to insure new homeowners. Insurance has now become a contingency in the contracts because if you can’t get insurance, you can’t close on a loan. Rossmoor, our senior community, currently has a fire insurance coverage issue and can’t find lenders that will finance the homes in that community, thus they are all-cash closings.

I have referred a handful of clients to a current lender that seems to get buyers insured. However, my most recent closing he could not and they found only one company (Mercury) that would insure in Brentwood. I think they have quotas for specific areas and this problem was not helped by California putting limits on how much an insurance company can charge. It is this point that has caused so many insurance companies to leave California and I am unsure what the solution is.

Understanding all of these possibilities and variables can help buyers and sellers make informed decisions. There is no foolproof way to insulate a market from the effects of a natural disaster, but being diligent about preparedness, recovery effort, and strategic planning can pave the way for growth later. On a side note, I just saw an article about one home that did not burn in the Lahania fires while everything else burned around it. It was a newer build and had some fire hardening; maybe a wave of future possibility?

Just Sold ~ 2111 Brandywine Ln.

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I first met Matt through his brother, Dean. They were on the hunt for a fixer-upper in Hayward/Freemont area and the first house we put a bid on was a probate property – a complete burnout home, listed in the low $ 400,000s. When it went to court, the bidding shot up to $747,000, which just didn’t make sense to them.

*Matt (front) and Dean (gray shirt in back).*

After that, I showed them several more homes, all with significant issues and price tags in the $800,000 + range. Then we found Brandywine, a house that had been sitting for six months. It came with a massive $45,000 pest report. The trim and deck were completely rotted – the original wood was cheap, and the house hadn’t been maintained (likely rented out to students at Cal State Hayward).

We got bids from contractors, ranging from $12,000-$18,000, but they ended up going with Dean’s guy. He did all the section 1 work (damage to wood), even found a bunch of termites inside the framing of one window. Now, they’re gutting all three bathrooms, painting inside and out, installing a new dishwasher, and building a brand new deck. The last sale in that development was $904,000. This home started at $908,000 but had dropped to $799,000. After some back-and-forth negotiations, Matt bought it for $750,000.

This wasn’t a flip – Matt and his family are moving in. I can’t wait to see how it all turns out!

Check Out The Citizens Institute

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The City of Walnut Creek is bringing back a popular initiative this Fall: the Citizens Institute. I learned a lot about the city when I did it. Participants in the Institute can learn about city operations, tour facilities not often open to the public, and meet City Council Members and key staff.

Applications are being taken through September 20 and the first session will take place on October 8. There is a City Council meet-and-greet TOMORROW (Sept. 11) at my house in Parkmead. My address is 190 Arlene Drive. Please be sure to come by and take advantage of this opportunity. See more below.

Sessions will take place:

Tuesday, October 8
Saturday, October 19
Tuesday, October 22
Tuesday, October 29
Wednesday, November 6
Wednesday, November 20

Anyone who lives or works in Walnut Creek and has an interest in local government is invited to sign up for the Institute. Each class is designed for 25-30 students to encourage discussion, involvement, and interaction.

7 Things To Tell A New Homeowner

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I came across some great advice in an email from Super Home Warranty recently, that I wanted to share here. They listed seven great tips to tell a new homeowner. They may seem simple or obvious, but as a new home owner, one may not think about all these things. I agree with all of the tips, some may have been noted in the home inspection such as water leaks and where is the main and circuit breaker and yes do a deep clean before you move in with all your stuff, often a seller will clean, but may not be as detailed as you would like.

Check your smoke detector and CO2 alarms: always test your alarms and put fresh batteries in!
Update your address: this is probably the first thing most people do upon moving, but it’s good to remember not to put it off too long.
Change the locks: you never know how many spare keys are out there from previous owners, so change the locks for peace of mind.
Check for water leaks: early detection of leaks can save you tons of stress and money down the line.
Locate the water main and circuit breaker: I’d add the gas main, too, because the last thing you want is to have an emergency and not know where any of those things are!
Clean the house: this is a good opportunity to make it feel brand new, all like yours, and get difficult-to-clean areas like appliances and air vents looking clean as a whistle.
Transfer utilities: just like updating your address with USPS, you’ll want to transfer any utilities necessary to your name at the new home. The longer you wait, the longer you’ll go without electricity, water, internet, etc.

Are there any other tips for new homes and homeowners you can think of? Comment below with the things you wish you had known!

How A Second Offer Sealed the Deal in Record Time – 2126 Vaquero Way (Antioch)

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I was covering for another agent who was on vacation and got a message from someone referring Mitch and Mallory to her. With that agent unable to be there, I stepped in and showed Mitch and Mallory a house that we wrote an offer on but did not get. We went to look at another house and it all came together!

That house was 2126 Vaquero Way in Antioch. It actually had another offer on it when we arrived but we offered what was recommended (basically asking price) and ended up winning the bidding. Mitch and Mallory also got a $3,500 credit after inspections.

Luckily, Mitch is an electrician so knows many people in the trades and can do quite a bit of work himself. I’m sure they will get this place in tip-top shape for their first home! I love working with first-time home buyers and seeing all the possibilities a new home brings to people.

I’m thrilled for Mitch and Mallory on their new adventure and can’t wait to see the finished product. There is something about when a buyer is ready, they are really ready. They had been thinking about this for months and finally acted, so it’s no surprise it happened so quickly!

15 Home-Buying Myths, Busted

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I stumbled upon this Zillow article a little while back and thought it would make for an interesting rundown of things I sometimes see clients struggling with. Some of these things are simply not true. Others are exaggerated. Either way, buyers and sellers need to unlearn certain things about the real estate process before engaging in it. Read on for more.

MYTH: You need a 20% down payment. This hasn’t been required for decades! In fact, you can put as little as 3% down, depending on the loan or the location of the home.

MYTH: Your pre-approval rate is the rate you’ll get when you close. Interest rates adjust every day. So, what you see at pre-approval is based on current market conditions and other factors, and it can’t be “locked in” until you sign a purchase contract with the seller.

MYTH: You should wait to buy a home until prices are lower. Buying a home after prices go up can be risky, but so can waiting. In popular neighborhoods (like many in the Bay Area), it’s often better to go for it and not wait.

MYTH: Buying a home is always cheaper and a better investment than renting. Renting a home can be cheaper than buying in many places! The benefit to owning a home, of course, is that it will appreciate over time and build generational wealth.

MYTH: You should find a home before you apply for a home loan. It’s smart to get pre-qualified for a loan. It will give you more information to shop with.

MYTH: Buying a fixer-upper will save you money. Sure, maybe on the sticker price. But fixer-uppers need a lot more than just a fresh coat of paint. Generally, there are major issues that need to be tackled, not all of which are visible up front.

MYTH: You have to get your loan from the lender who pre-approves you. No, you have no obligation to stay with the lender you start with. Shop competitive offers and find the best fit before you go under contract.

MYTH: You shouldn’t buy until you can afford your ‘forever’ home. Selling a home can be costly, but if you wait to buy until you can afford that dream home rather than invest in a starter home, you may never buy at all.

MYTH: A 30-year, fixed-rate mortgage is always the best choice. Adjustable-rate mortgages (ARMs) can save thousands of dollars of interest over the life of the loan. That’s one example. There are other options!

MYTH: You can’t buy a home if you have student loans. Actually, those loans can hurt OR help your chances of buying a home – it can boost your credit scores but it can also raise your debt-to-income ratio for approvals. Consider every angle.

MYTH: You have to pay the seller’s asking price to buy a home. Definitely not. The seller’s asking price is simply what he or she hopes you’ll pay. Offers and counter-offers will bring you to a point of agreement in the end.

MYTH: You need excellent credit to buy a home. It’s good to have good credit, but there are great home loans and rates available for people with less-than-perfect credit too.

MYTH: Fall and winter are bad times to buy a home. It can actually work to your advantage to buy a home in seasons when most shoppers think it’s “bad.”

MYTH: You cannot buy a home if you are self-employed. The rules for getting a mortgage may be different for those who receive a W-2 from their employers, versus a 1099-NEC for being a gig or freelance worker. But it won’t stop you from buying!

MYTH: All lenders are the same when buying a home. You don’t just shop houses and rates when buying a home. There are also significant differences among lenders and you should find the best fit for you!

Happy House hunting an buying a home you love. We are currently seeing many price reductions, inventory is still low, but rates have come down. Thus if you have been on the fence, now may be a great time to buy with hopefully further rate drops and you can refi at that point. When I bought the home I am currently in, the rate was 8.5%. I ended up refinancing more than 8 times and currently have a 2.75% rate. Call me if you would like to chat about buying a home.

Candidate DeVinney at San Dai

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Recently, I had the opportunity to attend a “Meet the Candidate” event at San Dai Restaurant on Main St. with Craig DeVinney, who is running for Walnut Creek City Council. He is supportive of Walnut Creek’s pickleball scene and moving our courts from Rudger Park to Tice Creek. He is an ER doctor with a fresh perspective and is supportive of small businesses in Walnut Creek.

It was interesting to attend and to hear his approach! I believe we need to be aware of what our local politicians stand for, as their policies are ones that affect us in a very local way, so ask your favorite candidate how you can support them. Money is always helpful, but you can also help distribute flyers, put up a yard sign, etc. Get out and vote!

On top of all that, I had the chance to experience San Dai. It’s a chef-driven, ingredient-driven menu with local, seasonal produce. Their inspiration comes from Singapore, Malaysia, and Indonesia – all well-known for intense, rich, and spiced food. The Chef, Nora Haron, draws from that region’s influence and contrasts it with Northern California styles to make for really unique meals. We had some appetizers and wine and it made me want to experience their dinner.

The website has some great pictures of the food they serve with some really interesting selections of food, like satay, corn ribs, ceviche, and several entrees of all types of meat. There was also a little coffee bar attached to the side (another coffee bar), but it was closed at that time of day (I’ll try it next time they are open and I’m in the area!). Have you tried San Dai? If so, I would love to hear your feedback.

Broadway Plaza Concert Series Begins!

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The 2024 Broadway Plaza Summer Concert Series begins tomorrow August 8th at 7 pm! Will I see you there? I love taking advantage of one of Walnut Creek’s best free, outdoor events each year. Thursday night, they kick things off with 24K Magic, a tribute to Bruno Mars. You can’t beat that kind of sound for an opening night! Seating is limited, get their early and bring a chair, friends and some beverages.

There are drinks for sale at each show, and the surrounding restaurants will be open for food, too. Though the event is free, A Brighter Day is a sponsor of the series and accepts donations for their cause. It’s a great cause, so please learn more about it and consider a donation if you go to the concerts. Below are a couple of pictures from past events.

More acts for the month of August include Evolution August 8th (a Journey tribute) and Kalimba August 15th (an Earth, Wind & Fire tribute). This is always a really fun time and the Walnut Creek Downtown Association does a wonderful job putting it on. Let me know if you’re stopping by!

Check Out The Hangout!

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In the space formerly occupied by Rossmoor Diner, there is a new restaurant with a full breakfast and dinner menu. It’s called The Hangout and offers interesting American options with an Asian flare. I visited recently and enjoyed the food I tried! There is another location in Pleasant Hill.

I thought the Asian breakfast options – like the Cha Thai Pancake and the Ube Pancake – were especially interesting. I had a good time there and ordered a pancake and poached egg. My favorite item was the pancake – really huge and fluffy. I highly recommend it!

The Hangout seems to have all sorts of inspirations, including serving famously Southern chicken and waffles and all sorts of surf-and-turf options. Besides the breakfast items, they offer sandwiches, burgers, salads, and plenty more to give you a wide range of options to choose from.

Next time you’re in the Rossmoor Shopping Center (or nearby), give The Hangout a try! My good friend Veronica, loves this place and has already been there more than a handful of time, it is helpful when you live close by as a quick good option.

Just Sold: 3354 Betty Ln., Lafayette

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I recently co-listed 3354 Betty Ln. in Lafayette with Rose Brudigam. It was listed at $1.35 million and sold, all cash, for $1.50 million. It had been a rental for about 20 years but was recently transferred to six siblings due to the passing of the family matriarch. They made several upgrades over the years, from shoring up the garage foundation to remodeling the kitchen to adding dual pane windows and a new electrical panel. They also painted the exterior and landscaped the front yard to be lower maintenance.

Before going on the market, though, there was still much work to be done. The interior had to be painted, new fixtures had to be added, and new sod had to be laid in the backyard. It was staged for a mid-century look. Once on the market, an agent looking to buy for herself wanted to know if we would accept a preemptive offer (this can be very confusing to sellers – trying to understand the pros and cons of looking at preemptive offers).

We opted to market with a weekend open house and mid-week broker tour before entertaining offers. The sellers ended up with a beautiful offer from a woman who thought it would be perfect for her and maybe, sometime in the future, for her daughter.

Though it all ended well, it wouldn’t be a home sale without a couple of small snafus along the way. The sod we replaced started browning on the edges, so we increased watering time for two very hot days in a row before the offer was accepted. Shortly after, we checked the house again and the sod was going brown and gophers had pushed up dirt! We found a broken timer in the sprinkler system and the sellers agreed to replace the sod again and add gopher wire underneath.

Also, when the buyer did her final walk-through, she thought there was fencing around the yard (there was some fencing, just not complete fencing). Since she has a dog, it caused some stress, so we delayed the closing by five days to get the new sod in and to get bids for a fence around the main part of the backyard. The seller agreed to split the cost of the fence with the buyer, too.

All in all, we have happy sellers and a happy new homeowner in Lafayette with a peek-a-boo view of Mt. Diablo and we couldn’t be happier for both parties!