June 2016 H OUSING N EWS R EPORT
Gove, the real estate radio host, said he specifically targets Bay Area buyers given that he primarily lists homes priced at $500,000 or higher. “We really cater to the Bay Area. We market to the Bay Area,” he said, noting that his marketing efforts include high-end photography and paying extra to make sure his listings are posted immediately on key listing sources for prospective buyers. “There are the investors who are paying cash. And then there are the retirees.” Gove provided a recent example of retirees from the Bay Area who purchased a $1.1 million home he was listing. “They are moving to the foothills, five acres on the Bear River, awesome property, dream home,” he said. They just sold one that was in disrepair in the Bay Area for $1.3 million.” Acord, the broker-owner at Arda Realty, expressed concern about some of the trends he’s seeing in properties with acreage specifically in Placer County, which extends northeast of Sacramento into the Sierra Nevada mountain range. “Properties that have land are just doing some really crazy things right now,” he said. “Prices that just don’t make sense Breaking Away From Fundamentals
55 percent of that increase is directly due to a 5 percent drop in interest rates during the same time period. “The interest rates are in a bubble. Is that going to hold? No. And the Fed’s doing it on purpose … to push forward the wealth effect even though the job market totally sucks. “We’re still teetering on the edge of recession, so that tells you that housing is not enough,” he added, referring to the national economic picture. “I think artificially low rates driving prices up; that is a dynamic impacting things,” said Lundquist. “And if that were to change that would change the face of the market.” The housing price bubble in San Francisco is benefitting local players like Grenz, the broker, flipper and custom home builder. The target buyers for Grenz arewhat he calls “refugees” coming from the San Francisco Bay Area to escape the high housing prices there. “The property we’re building right now is an empty nester target property, so that’s a Bay Area refugee,” he said, noting that many coming from the Bay Area are retirees who have cashed out of a property. “We have sold to Bay Area refugees that just pay all cash.” Bay Area Refugees
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SOURCE: RealtyTrac
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