gmhTODAY 24 gmhTODAY Feb March 2019 - Page 12

California Housing Market — A Year in Review By CAR, Richard Westlund F rom devastating wildfi res to high-impact state propositions, California captured more than its share of national headlines in 2018. But beyond the stories that made national news, the state’s real estate market was also affected by changes to U.S. immigration and foreign trade policies,new brokerage models, technology advancements and other key trends. With 2019 fast approaching, take a moment to pause and look back at some of the biggest news stories and trends of 2018 and their impacts on California’s local and regional markets. WIDESPREAD WILDFIRES More than 5,500 wildfi res had already plagued the region by late August, according to the California Department of Forestry and Fire Protection. Those included the Mendocino Complex Fire, which burned more than 459,000 acres to become the largest wildfi re in the state’s history. Wildfi res generally destabilize local housing markets, slashing the price of houses near the devastation and raising the prices of those farther away, and it often takes years for those markets to return to normal. As the risk of fi re continues to increase and the fi res them- selves continue to grow in size and intensity, fi re preparedness — from building standards to fi re insurance — will be a hot topic for all residents of the affected and at-risk regions. INTERNATIONAL BUYERS International transactions involving buyers and investors from China have dropped. Many Chinese buyers want to purchase and invest in California properties, but they’re facing obstacles. “The trade war with China has caused tensions, and there are also issues with obtaining U.S. visas,” says Linda Lee, broker associate with Keller Williams. “However, it’s not just the U.S. potential buyers who are running into problems getting money out of China. The government also appears to be blocking access to some U.S. websites and slowing downloads, and many REALTORS®’ emails are bouncing back.” INVENTORY SHORTAGE A shortage of homes for sale affected many California markets in 2018. “The greatest trend impacting our business this year, and for the foreseeable future, has been the inventory shortage as there is a razor-thin supply of homes,” says Chris Anderson, “This has led to greater competition for homes and rising prices across the board. Listing agents and their clients are seeing homes sold quickly and for top dollar, while agents are helping homebuyers put offers on multiple properties.” Plus, with fewer homes available, affordability has become an increasingly pressing concern. The median price for a single-family home in the second quarter of 2018 was $596,730, nearly double the nationwide median of $269,000. Top Producing Team Gilroy Offi ce, 2015, 2016, 2017 Sean Dinsmore, Realtor Intero Real Estate Services 408.710.2855 DRE #01966405 Marta Maloney, Realtor GRI Intero Real Estate Services 408.710.0571 DRE #01352339 12 PROPERTY TAX PORTABILITY – PROP 5 The Property Tax Fairness Initiative would remove the moving penalty for seniors, the disabled and victims of natural disasters, making it easier for these groups to move — and freeing up housing stock in the process — while still ensuring they pay their fair share of taxes. Without Proposition 5 on the books, senior homeowners have little fi nancial incentive to move, even if that move would better their quality of life. Arnold recalls that when she moved from Los Angeles to Orange County more than 20 years ago, she faced a stiff increase in her property taxes. “There are many seniors today who would love to downsize their homes, provided they could transfer their tax assessments,” she adds. Like real estate professionals across the state, Arnold was a strong supporter of Proposition 5 on the November ballot. “We need to do what we can to help our residents age 55 and over match their homes to their lifestyles.” LOCAL RENT CONTROL – PROP 10 In contrast, Lee, Arnold and other real estate professionals across the state came out strong against Proposition 10, which would allow local governments to control rents on single-family homes and new construction. The CALIFORNIA ASSOCIATION OF REALTORS® condemned the proposition as deeply fl awed, a threat to private homeownership that would ultimately worsen California’s housing crisis. Lee agrees: “I have clients who rely on income from their rental properties. Imposing local controls would have a major impact on their lifestyles.” Arnold adds that Proposition 10 limits an owner’s ability to rent at a competitive rate, thus affecting private property rights. It also discourages new construction and single- family home rentals, both of which have been exempt from rent control under California’s Costa-Hawkins Rental Housing Act. GILROY • MORGAN HILL • SAN MARTIN february/march 2019