Despite making progress, we’re still not yet ready to submit plans for building approval in Pebble Beach.

The property came with plans that the city and county had approved, but it was not a shovel-ready project. Our architect and team of engineers have been putting together the “real” detailed plans for building approval.

Big wins: We persuaded the city to allow us to shift the house position on the lot. As a result, we will have more privacy from the neighbors and be more centered on the parcel. Future owners will appreciate the extra yard space and better aesthetic. We are also incorporating the second bedroom suite into the property instead of it being an attached ADU.

Setbacks: Weeds invaded the land and two trees died, suddenly. We must engage an arborist to officially pronounce the trees dead before we can apply for a permit for their removal. When designing the landscape plan, we need to plant two new tree for each one dead tree removed.

While we inch along, the finish line feels like it is shifting further ahead. My hope is that being thoughtful and thorough now will yield positive results. Who knows? Maybe construction costs will decline over time. (Yeah right!)

#1105Wildcat #PebbleBeach #BuildingAHome #DevelopmentProcess

The real estate market has been on fire. During the first half of 2021, Bay Area sellers have realized new price-per-square-foot records. Yet, I believe dynamics will soon shift to more of a buyer’s market, or at least come back into balance. The basics of supply and demand support my hypothesis.

-HOUSING SUPPLY WILL RISE: Typically, there is a surge of inventory after the Superbowl. Sellers are enthusiastic that the weather gets a little nicer. They think more buyers will be in the market, not distracted by football. And, these sellers want to get a head start before more homes come to market. Inventory tends to build in March. For many soon-to-be empty nesters, they consider that they might market the home for a week, a typical buyer will need 30 days to complete the mortgage loan process, and mortgage lenders allow for a maximum 59-day rent-back period. If school is out in early June and you want a buffer to move, then you back into an on-market date of early March. Many sellers want to close escrow on the sale of their home prior to moving because they use their sales proceeds to buy their next homes.

The COVID pandemic changed so many things, including the timing of this surge. Fewer people were willing to show their homes while being owner-occupied. Some students remained in home schooling, and parents did not want to disturb school schedules with showings. The Bay Area market had less inventory this spring, causing pricing to rise, and planting seeds of optimism for some sellers.

In the second half of 2021, I believe pent-up supply will come to the market. School is out, so many families have moved and will soon be selling. My stager is overwhelmed helping to prep homes to hit the market! With recent strength in the real estate market, there might be added inventory from sellers trying to maximize their returns.

More inventory leads to lower pricing.

-BUYER DEMAND WILL FALL: For the first time in over a year, many families are able to travel with less worry. Many would-be buyers will be visiting loved ones or exploring the world this summer instead of looking at houses.

Interest rates are starting to rise. While still at historically low levels, interest rates rising can have a chilling effect on home prices, particularly at entry level price points. Many buyers determine their housing budgets based on how much they can borrow.

Less demand leads to lower pricing.

A shift in the market may take a bit of time. Listing agents will likely see a changing spread in offers. Some offers may be grouped together, and then there will be one or two high-priced outliers from buyers. Those buyers may just want a house after trying for so long. Or, perhaps they will not yet realize the market is in flux.

If you have been a buyer waiting on the sidelines, now is a great time to start exploring, and we can help. If you are a seller, we will share with you our unique strategies and give you a realistic range of what you can expect from this changing market. At Canopy Realty, we are here to protect your interests.

I’m looking forward to sharing progress reports as 1105 Wildcat Canyon Rd in Pebble Beach becomes a gorgeous modern home.

Identifying this opportunity was somewhat easy because the land and concept drawings were posted on the MLS. The listing sat dormant for four months. As luck would have it, once my partners and I started digging into the opportunity, others also took interest. In the end, we became the owners.

The property has been through the planning stage. This means that the town of Pebble Beach and the county of Monterey have reviewed and approved the concept for the home. We are creating a contemporary three bedroom, three and a half bathroom home with an ADU suite and a cool loft that one will be able to access through a secret door in the office. My kids can’t wait to see that door in action.

Now, we need to engage the architect and a team of engineers to develop construction drawings. The building department will review these detailed plans to hopefully issue permits. The general contractor will solicit bids for materials and subcontractors. If all goes as planned, we anticipate the project will be “shovel ready” in about three months.

We have also engaged a construction lender to help finance the development. With a construction loan, we still make a down payment, but we are able to borrow money to build the property. The lender monitors the builder’s progress, and we approve draws on the loan on a monthly. A key component of a construction loan is that we pay interest only on the funds drawn. In the beginning, our interest payment will be low because the project is just starting.

If you have ever been curious about the process to build a house, please follow along as I share the joys and frustrations of the creation process.

#1105Wildcat #PebbleBeach #BuildingAHome #DevelopmentProcess

Someone recently asked for data of my sold price vs. list price for the past year.  This was an awesome opportunity to consider the topic of whether this should matter.  I LOVE data.  After all, I was a strategy consultant and Wall Street analyst. I earned a living parsing through data, then applying my understanding to predict the future.  But not all data is created equal.

Let me highlight two examples for consideration.  A few years ago, a single family home in Palo Alto was not selling.  The listing agent reduced the list price to just under $1mn, which was far below the market value.  An acquaintance thought she could buy the house for the list price. I had to break the news that the house would sell for over $2mn, as it should, and that the list price was a “marketing stunt” to grab attention.  Did the listing agent outperform by listing the house for less than half of its market value? If an agent touts their ability to achieve a significant premium above the list price, I would question whether the agent really has their pulse on the market or whether the agent sets artificially low prices to bolster that particular data point to prospective sellers.

A second example points to the wonderfully human element of selling real estate, which is a core reason why I love my career.  My sellers received numerous offers and chose one offer that left about $20k on the table.  Why?  Because the buyers’ story really resonated.  They were a young family with a newborn.  We learned that the mom was battling cancer, and the family wanted a peaceful home where the mom could comfortably get through her recovery.  The sellers had lost their father to cancer and were immediately taken by this family’s story.  In this case, the sellers were thrilled that they could bring joy to the buyers, even if they did not maximize the price of the home they were selling.

While I love data, what I value above all else is doing the right thing, in partnership with my clients.  You determine what is most important to you, and we will be “Here to Protect Your Interests.”

#listingdata #realestatedata #datageek #canopyrealty #heretoprotectyourinterests

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