Thanksgiving is perhaps my favorite holiday, if for no other reason than it's still relatively unspoiled by commercialism, religion or politics. Irrespective of one's faith or beliefs, families young and old, will gather around a table to carve a turkey, hold hands, and EAT! For one day, we will put aside our skepticism, collectively give thanks, and share a common objective on a national level, which in and of itself is nothing short of miraculous. Gobble, gobble, gobble!
Save for a fantastic meal and a lavish table, there's little else that's required to come together and entice one's kids to return home. (A BIG flat screen TV probably doesn't hurt either.) "Gather ye rosebuds while ye may." The years really do speed by all too swiftly. So while there's a good deal of cooking and cleaning that goes along with the holiday, there's no frantic gift buying. (A fact I'm truly grateful for.)
Since this is the first time Cliff and I will be seeing our son, Case, since he graduated from the University of Arizona last June and moved to Austin, Texas, I couldn't be more excited for the break. As his mom, I applaud his hard-won independence, but what's wrong with a little apartment in Oakland and a job in the Bay Area, I ask?
To which Case replies, "Mom, I need to strike out on my own, but can you pay for my airplane ticket?" (Gladly, as long as you come home once in awhile.)
As the new house (and by "new," I mean very old and decrepit house) is decidedly under construction, I won't be tending to the bird this year and cooking for 30 guests, as is my usual fare. In fact, I have booked a lovely VRBO in Santa Cruz for a little R & R and some football on the beach, so the day will be a much more intimate affair and dinner will take place at the Shadowbrook Restaurant along the creek. (I'm really taking this mini vacation to heart.) I'm only too happy to have someone else oversee the cooking and the cleaning for a change.
I'll also be taking next week off from writing The Perspective, so it seems appropriate to give thanks now. (Thank you.) It's been a year of change for my family on nearly every level, from the sale of our own Piedmont home, to the purchase of the Calmar "fixer," to our son's college graduation, to an impromptu relocation, to my mother-in-law's move into assisted living, just to name a few . . . and you have been there every step of the way with your words of encouragement, your kindness, your support and your presence.
How do I thank you enough? Your friendship and faith are so deeply appreciated.
And while juggling life on "life's terms," I was also riding the crest of my industry's biggest year in nearly a decade. To no one's surprise, The GRUBB Co. enjoyed more than its share of success and I gratefully, went along for the ride. Personally, it was a banner year (again, thank you) as the economic recovery coincided perfectly with a decade of diligence and experience on my part.
In short, 2014 has been an exuberant year for Real Estate and I suspect 2015 will prove equally as fruitful for those of you buying, selling - or buying AND selling - in the coming months as well. This projection is positive news and comes by way of the National Association of Realtors and every other economic guru with a horse in the race. As things currently sit, there's no reason to expect anything but continued growth. Give thanks.
However, with buyer demand still outflanking good, available inventory, Sellers retain a distinct advantage for the foreseeable future, which is great to hear if you are a Seller, but tougher news if you're on the buy side of this equation.
What can I say? Let's talk turkey and (at the risk of mixing fowl metaphors) get your ducks in a row so that you are in a position to compete in a very meaningful way come the spring. You will need to.
BTW - if a move is in your future, it's NOT too early to reach out to your Realtor NOW to set a calendar and begin preparations. Sellers can begin to inspect, purge, pack, clean and paint their homes while Buyers should be getting their financial house in order and meeting with a local lender. As an aside, if you have a college-age child returning home for the holidays, this is an opportune time to have him/her go through their rooms and discard, donate and deconstruct. Good-bye Boy Band posters, soccer trophies and the like . . .
For the sake of parity, there's a good deal of work to be done on both sides of the transaction so that come next spring, you are poised to be "in the right place at the right time," and that's where I come in. (Please feel free to refer me to your friends and family.) I have years of experience guiding both Buyers and Sellers through the process. Moreover, there are few things as professionally gratifying as seeing a family happily ensconced in their new home. What can I say? I'm a girl who believes in the dream.
But let's all take next week off to enjoy family time with one another, to gather in circles large and small, to watch marathon football matches, to take a walk with our dogs, to eat more than we should, and to experience grace in all of its fine forms. Ain't life grand?
(P.S. - You can follow my renovation escapades, missteps and misfortunes at www.renovationriptide.com. It's full of "oh wow" photos and "OMG" moments. Or put another way: What can you do when you live in a zoo? It's going to be great when it's completed. At least that's what I keep telling myself!)
"Now that the ceiling is open, can we remove those struts and square off the ceiling to capture more height?" I asked.
"Yes, you can," my architect, Ahmad, explained. "In fact, I like the idea very much."
At which point we turned to our contractor, PJ, who affirmed that the struts were purely ornamental.
"Great, let's do it then," Cliff and I agreed.
There's nothing quite as startling as seeing your home deconstructed (that's not bomb damage folks, it's demolition) but it does give you and your team the opportunity to see the "bones" of the house and to make changes early in the process.
Interestingly, the bones of our house look a lot like an upside down ship's hull. There are rounded corners and coved ceilings in many of the rooms, which add to the overall charm and elegance, but unfortunately, shorten the ceiling height considerably.
Moreover, coved ceilings - while pretty - make for an absence of square angles. As this room is set to be Cliff's new study, the plan is to add bookshelves, thus the coved ceilings are problematic. On the other hand, I wouldn't dream of removing this lovely design detail in the hallway where it makes a dramatic entry even more so.
Since the house is all but down to the studs, now IS is the appropriate time to make such changes. Once PJ's crew begins framing, I suspect there will be a few more change orders in store for us (and by us, I mean him) as well.
Renovations are like that. Sometimes what makes sense on paper, doesn't necessarily work once the walls begin to go up and are put into place.
"Hmmm, I thought there would be more room in the hall closet."
"Can we move the washer and dryer over here instead?"
"What about if we . . ."
At our last house, we moved a bedroom wall a foot and a half after framing to make the two bedrooms more equitable in size; a decision that ultimately made better sense, but did add additional expense to the job. (It was worth it.) It's not something we noticed on the blueprints, but once the framing was in place, there was no question but to adjust the dimensions.
I'm expecting a similar journey with the Calmar house but on a much larger scale. We had pursued the purchase thinking we would simply redo the bathrooms and kitchen, add a downstairs apartment and live through construction. Voila!
Uhhh, maybe not. Once we moved in, it was clear we couldn't stay (nothing functioned properly) and when a second sewer lateral was discovered only after it backed up into the basement, that was our cue to beat a hasty retreat and abandon ship. "Abort, abort, ABORT!"
I feel a little like "Alice" in Wonderland as she fell down the rabbit hole. The house now has doors that open up to nothing and staircases that lead to nowhere. (That's ALL going to change.) As luck would have it, the job has morphed into a reinvention, instead of a renovation. Still, now that we are squarely underway, there's nothing to do but embrace the change. Or as Alice was fond of saying, "Curious and curiouser."
I realize now that the other five renovation projects Cliff and I undertook over the past 25 years were merely warm-ups to what I hope, will be our final renovation (but in all likelihood, won't be). It's inevitable that as homes get older, they are going to need some updating.
BTW - "change orders" typically add to the expense of your project, so DO get a sense of what those changes are going to cost upfront so as to avoid unwelcome surprises when you are billed for them later on. Your contractor has bid on the project - as presented; therefore, if you show up on a daily basis to question the process and ask for "changes," be prepared to pony up!
Removing a few ornamental studs from the framing should be a nominal expense while removing an entire chimney will cost much more, so if you are on a tight budget, consider what trade-offs you are willing to make to cover the additional work. Whatever your projected costs, DO pad the budget by 15% to absorb the unexpected along the way - some of which you'll naturally create because you can (and will) and others due to discovery when opening the walls on site.
Finally, I'm often asked, "Should we renovate or move?" In our case, Cliff and I did both simultaneously, which is a story for another column and another day, but the short answer is: "It depends."
If you enjoy making a million and one decisions, if you have the wherewithal, if your marriage is sound (I mean really sound), if you can roll with the punches, if you love your neighbors and the street on which your current home resides, if your lot is virtually irreplaceable, and IF you enjoy the process of rebirth - than yes, you should renovate your current home.
On the other hand, if you hate the upheaval, can't live with the mess, don't like workmen in your home on a daily basis, will go ten rounds with your mate over every decision, and will wonder half way through why you ever began this horrific remodel (?!?), then please let me help you find a replacement home. From my experience, it is actually less expensive to buy UP in many cases, than it is to renovate and stay put (although your tax base is likely to increase so there is THAT to consider).
Whatever the journey, I'm here to guide you along the way.
How can I help you?
(PS - You can follow my renovation escapades, missteps and misfortunes at www.renovationriptide.com . It's full of "oh wow" photos and "OMG" moments. Or put another way: What can you do when you live in a zoo? It's going to be great when it's completed. At least that's what I keep telling myself!)
My dog, Buck, has perfected the art of being in the "right place at the right time." He knows that if he patrols the kitchen while I'm preparing dinner, chances are that something delicious is bound to slip off the counter, the cutting board or the stove and PLOP squarely onto the floor. (Okay, given that he's a dog, it needn't actually qualify as "delicious;" anything semi-edible will do.)
When it does, Buck pounces. On nights when he is really lucky, I'll let Buck lick the pan. (Just for the record, the dish hits the dishwasher immediately thereafter.) Life is admittedly, much easier (and far more straightforward) if you're a well-loved dog.
But if you're a buyer or a Seller, how do you know when it's the "right time" to buy or sell?
The short answer is: YOU DON'T.
"Timing" the marketplace is a skill that few of us have ever perfected (even those of us who do this for a living) in spite of financial forecasts, pie charts and economic graphs put out by experts with advanced degrees (and LOTS of important initials behind their names).
With all due respect to Buyers who claim bragging rights for having bought at the bottom of the marketplace; they were often more lucky, than smart. (Which isn't to imply that they weren't smart, but does suggest that they were also VERY lucky.)
With respect to my own buying and selling history, Cliff and I have experienced both ends of the spectrum and only in hindsight could we have charted the peaks and valleys accurately. Our first home was a small flat in a two-unit building in San Francisco we had purchased with a partner. The market was down at the time and although the building needed MAJOR TLC, there was little competition so we scraped together the money and bought it. Ditto for house number two. (How I wish we still owned either of those homes today.)
By the time we crossed the Bay Bridge into Piedmont, the market has appreciated substantially and like today's marketplace, we found ourselves in heavy competition on virtually every home in which we had an interest. Eventually Cliff and I ponied up and paid what seemed like a small fortune at the time for an out-of-reach house that had just reduced its listing price, but was still a major STRETCH.
Luckily, markets (for better or for worse) tend to be relative and our San Francisco home had received seven offers, allowing us to make the BIG jump. Happily, we could almost (almost) afford the property as a result. (For those of you tracking, the East Bay, by comparison, is still the best buy around.)
Cut to 2008 and like every home in our community, our property values had plummeted. (Ouch, that's never welcome news.) Yes, even here in Piedmont, where values are often buffered by strong school performance, home prices took a sharp correction based on the financial crisis and bail outs. As poor timing would have it, the house still needed major renovating and the banks weren't exactly throwing money our way. (Not to worry, we weren't selling but the refi appraisal was a very sobering moment, to say the least.)
Gratefully, we had banked quite a bit of equity over the years so we stayed the course, did the work and came up with the funds from other streams of investments. Last year, that home sold for far more than we ever expected (thank you) and we turned around and bought yet another "fixer." (Truly, there should be a 12-step program for serial renovators. I can't seem to stop.)
What's the moral of the story?
Don't worry about "timing" the marketplace. In my experience, luck is largely a matter of when "opportunity meets preparation." Like all markets and investments, real estate is cyclical. It goes up, it goes down and sometimes, it holds steady. Bubble or not, home ownership has historically proven to be a very sound investment over time.
That being said, here are my two cents, for what their worth, and a few caveats as well . . . just for good measure.
Your home shouldn't become your piggy bank. If you expect this investment to turn into your "nest egg" years from now, that plan requires you to pay down the mortgage. Thus when the market is UP and you decide to take advantage of it, your equity will not only be intact, it will have grown considerably.
If you borrow money against your home, make sure its put to use improving the house (not buying a boat or going on vacation). Home ownership requires ongoing maintenance. Maintain them and you'll be well rewarded. While it's tempting to use your home's equity like an ATM, you'll pay dearly for it later on.
Homes are NOT short-term investments. The cost to buy and sell alone in California will add another 10% to your move up (or down) so settle in and stay awhile. Transfer taxes, commissions, loan origination fees, title and escrow fees, etc., etc., etc., are an expensive process so plan on staying seven to ten years in your home before moving on, moving up, or moving out.
Don't stretch, but do reach. It's not about the price as much as it is about your carrying costs. A house shouldn't break the bank, but if you outgrow your new home in just a few short years, you'll likely end up paying far more for the next property you should have bought the first time around.
Finally, if you've identified the house of your dreams, pay the going rate (assuming you can afford it). While you may hear it over and over in marketing, the majority of homes here in the Bay Area truly are, unique. Unlike the suburbs where the next development offers a fresher, newer model, our housing stock IS in fact, one-of-a-kind. If you're waiting for the market to go down, it's likely that turn of events will coincide with interest rates going UP (!) and that can very likely cost you much more in the long term.
As all of us who have more than a few decades of marriage and child rearing under our belts, know that life doesn't necessarily happen at the "right time." We can plan ahead for the unexpected (and we should) but babies arrive, parents depart, kids go off to college, markets expand and contract, and our housing needs change and adjust as we grow up, grow out, and grow older - irrespective of the best suited 'timing.'
If you're as quick as my dog, Buck, you'll pounce when the opportunity arises.
How can I help you?
Julie Gardner, has been writing The Perspective for 15 years and has published more than 600 essays. She is also a frequent contributor to the Sound Off column in the Real Estate section of The San Francisco Chronicle.