Mix in the state-wide election in November when a measure to change the laws limiting rent control goes before the voters and it will be a busy fall. The statewide realtors’ association also has qualified an initiative for the ballot that will allow homeowners over the age of 55 to take their fixed property tax under Proposition 13 anywhere in the state if they buy a less expensive home.
It promises to be quite a fight because the state estimates the measure would cost cities, schools and counties up to $1 billion. Expect the state teachers’ union and public employee unions to spend substantially to oppose it.
David updated the Pleasanton Men’s Club on both the state and Tri-Valley real estate markets in his annual appearance this month. Statewide, he pointed out that California needs 180,000 new units annually to keep up with new households but has fallen 77,000 units short yearly for the last 20 years.
That shortfall, coupled with explosive and welcome job growth in San Francisco, Santa Clara and Los Angeles counties have sent housing prices soaring as supply continues to shrink. That resulted in a key trend: the number of years people live in a home continues to increase, particularly among Baby Boomers who could be expected to be in the downsizing season. Instead, money spent on remodeling and other home improvements is soaring. To encourage movement in the Baby Boomer, see Prop. 13 related initiative mentioned previously.
Homeownership rates, particularly in people under 50, continue to drop—it’s particularly low (25 percent) in people under 35. That likely means that most Californians will be renters by 2040.
Turning to the Tri-Valley scene, prices continue to climb well beyond pre-recession levels. One key metric, the number of homes sold annually, has remained in a narrow range across the valley since 2012.
Median sales prices have climbed steadily in the same period so all cities except Livermore now are more than $1 million. In the four cities, a substantial majority of the home sales were between $1-1.5 million. In Livermore, the highest percentage was $600k-690 with $700k-799 and $1-1.5 million also close.
Considering whether the prices are realistic, David’s stats show that through June homes in each market are selling for more than asking price. And the days-on-the-market stats for the resales are 20 days or less across the area.
Bottom line: supply is constrained; the Tri-Valley is desirable and, as I’ve pointed out in other blogs, there are few places that combine quality public education, plenty of quality job opportunities and housing prices—compared to the elsewhere in the Bay Area—still within range.
