The "Green Rush" and Humboldt County, CA Real Estate

The “Green Rush” is on!  People from all over California and  all over the nation are rushing to Humboldt County to buy up “grow properties,” land suitable for the growing of marijuana.  Has it affected the real estate market in Humboldt County?  I teased out some simple statistics to get a broad overview of this issue.

To get a baseline of the real estate market without the influence of “grow properties, “ I pulled up all of the single family homes sold in Humboldt County on city lots over the last 4 years.  These homes, by and large, shouldn’t be affected by the marijuana industry.  What I saw was a 17.6% increase in the average price of a home over a four year period, 2013 through 2016, with the number of units sold between 492 in 2014 and 520 in 2016.  That’s an average annual increase of approximately 4.4%, roughly on par with national trends.

Next I pulled all properties that have sold over the same 4 year period with at least 20 acres, including both homesteads and raw land.  While not all of these properties will be used to grow marijuana, most “grow properties” will fit into this sample.  These properties experienced an increased average sales price of 92% over the same four years, and a 69.6% increase over last year alone!

There’s no question that the “Green Rush” has had a huge impact in the Humboldt County real estate market, but it does seem that, for now, the effect is mostly limited to large agricultural parcels suitable for growing, and not general single family residential homes.

Real Estate Market Stats - Humboldt County, CA , February 2013

The statistics for Humboldt County's real estate market are very, very remarkable. I've had to tweak the parameters of my graph axis to keep the data on the chart!

The inventory of active homes in Humboldt County has literally fallen off the charts! I've never seen less than 500 homes on the market until last December, and now we are under 400! There is a real shortage of homes on the market right now!

But demand is up! We sold more homes in January than any of the past 5 years, and more than the average of the 6 years before that! Folks are buying homes!

With supply low and demand high, we should see rising prices. Well, not quite yet, but they are certainly not falling. We spent most of last year between $240K and $260K. We start this year right at $240K, a $17K improvement over last year!

Similarly, the median home price is up over last January, and right in line with our market performance last year.
 
The bottom line is that Humboldt County's real estate market is poised for some nice price gains. If you're thinking about buying, this might be your last chance to buy "at the bottom." If you need to sell, there is limited competition, so call me and let's jump in!

Humboldt County Real Estate Statistics for November 2012

I'm bragging!  I called the bottom of the market as January 2012 as early as last February! And sure enough, we seem to have hit it and bounced up a little bit! So, where are we going from here?

The good news is that inventory is really, really low! I don't think I've ever seen inventory this low! This usually means buyers fighting over the best listings with multiple offers, maybe even higher than asking price!

The big question is this: Will demand for homes continue? They certainly did through November; we'll see how the Presidential election results and the Christmas shopping season effect the economy, though. Bottom line: if the economy produces jobs, demand will continue; if not, we could be headed for another decline in the number and price of home sales.

When I say that we've bounced off of the bottom, it's not by a ton. The bottom seems to be around $225,000 average home sales price throughout Humboldt County, with the "normal" in the $250,000 range. Low inventory and high demand will certainly push that up; but if the economy falters, we could see prices start to go down...again.

So if you're thinking about selling a home, now is a great time to do it. Call me quickly so we can get your home on the market before the inventory picks back up. If you're secure in your job, low interest rates and prices make now a great time to buy as well. Give me a call at (707) 499-7111 so we can talk about your specific situation.

Was January '12 the Humboldt Co. Real Estate Bottom?

Everyone is wondering when we're going to hit bottom in the real estate market.  I predicted this past February that January 2012 was going to be it!  Why?

The number of active homes on the market has been at normal or below normal levels since December of 2011.

And demand in the form of the number of homes sold has been very solid since August of 2011!  When supply is down and demand is up, it can't help but to support prices!

Humboldt County's average selling pricing had been bouncing around $250K for the last half of 2011, and when it hit a low of $225K in January '12, I thought, "this might be it!"  February's active listing numbers came in low, and the number of sold units remaind strong, and sure enough, our average price bounced right back up to the $250K mark.

The median sales price had been tracking in the same direction as the average price.  All this convinced me that our likely bottom would be January 2012.  So far the fundamentals continue to show support for prices. 

Low inventory is beginning to hold us back a bit on volume, which will continue to support prices.  So if we can get loan underwriting standards back into a "normal" mode, we should see some home prices rising back to levels where they were purchased in the last several years!  This will enable more homeowners who need to sell to do so, increasing our inventory.  We should then see prices start to stabilize, hopefully sometime next year!

So, should you buy?  Is now the time to sell?  Call me at (707) 499-7111, and we can make a plan to accomplish your real estate goals!

Great Humboldt County 3rd District Supervisorial Forum!

Mark Lovelace

Humboldt Association of Realtors had a great candidate forum tonight between two great people, incumbent Mark Lovelace and challenger Karen Brooks, who are both running for Humboldt County’s 3^rd County Supervisor seat!  Both candidates did a great job of fielding some tough questions and communicating many similarities, but also some key differences in how they would respond to upcoming issues in the County.

• Karen Brooks said that she would like to take the county housing element “back to the drawing board.”
• Mark Lovelace noted that “infill only works if that’s what the people want.”
• Brooks, when asked about the issue of  “shaded parcels,” said that the shading that the county did was “unethical and illegal.”
• Lovelace is working to allow landowners to file “non-industrial timber management plans” at less expense to enhance their ability to manage resource lands.
• Brooks is open to the idea of outsourcing many of the planning department’s permitting processes to local agencies.
• Lovelace believes that a key government role in the planning process is to “balance the property rights of an owner with the property rights of his neighbors.”

Karen Brooks

I am thankful that both candidates came out on a rainy night to give us their thoughtful, sometimes provocative answers to some tough county problems.  It was an entertaining and informative forum!  Thank you, Mark & Karen, for your thoughtful responses and willingness to serve!

Tacky Neighbors Can Cost You Money!

The three biggest factors in real estate values are 1) location, 2) location, and 3) location.  So the old saw goes, but this photo proves that the quality of neighbors has to fit in there somewhere.  I drive by this pick-up truck on my way home from our local grocery store, and cringe every time.  And when my children are with me, I often think about pointing out some feature in the clouds on the left side of the street.  Fortunately, our home is another half mile or so away, so this pickup doesn’t affect us directly.

I got a call recently from a friend who owns the property just across the intersection from this pickup.  They live out of the area and have been renting their home to tenants for several years now, and are thinking about selling.  We talked about a lot of the neat features they built into their home, and the extra large lot, and the huge amount of privacy, especially considering the location in the middle of town.  But she had no idea what was on the tail gate of her neighbor’s truck!  She was mortified!

When the home hits the market, I will be sure to give directions for other agents to approach from the opposite direction; at least the offending neighbor has the consistency to park on the same side of the street, all the time. But eventually some potential buyers will drive by and see the tail gate, and will instantly be turned off on the neighborhood, and consequently the home. 

How much of a price hit will we take on this otherwise delightful cottage?  Fewer interested buyers means fewer offers, which means more downward pressure on the price.  Is it a $5,000 hit?  $10,000?  $25,000?  It might even be worth it to “buy out” the tenant’s lease and make it worthwhile for him to move into someone else’s neighborhood.  Maybe yours?  Maybe mine.

Why I Love Humboldt County, California!

I Love Humboldt County, California!

A picture is worth a thousand words!

But just in case you missed some of them, let me repeat.  The mountains trail down right to the ocean, so we Eurekans can walk on the beach, often in the warm sun, and see snow in the mountain peaks inland a few miles.  I love the way big waves crash against our rocky coast and spray foam everywhere.  I love to walk the docks and quiz my wife about the different types of rigs on the sailboats.  I love buying fresh crab or fresh tuna off the fishing boats in the marina.  70% of the oysters grown in California are grown in Humboldt Bay! 

And the Victorian seaport of Eureka is a fabulous place to wander and look.  The architecture is epic!  The Carson Mansion is widely considered to be the most prominent example of Queen Anne Victorian architecture, and there are so many gorgeous examples of Victorian architecture in the Old Town area!  There are tons of cute little stores for shopping.  Great food in a wide variety of restaurants.  And lots of interesting people!  I truly love Eureka!

Humboldt County, California Real Estate Market Report - February 2012

Could January 2012 be the bottom of the bust?

Our inventory hardly ever goes down for three straight months at the beginning of the year, but that's exactly what happened January, February & March of this year!  This can't help but to give prices some support, and keep them from going down.

And the number of homes sold is not only running at "normal" levels for February, but has been solid for 3 months in a row - Dec '11 - 92; Jan '12 - 74; Feb '12 - 77!

And sure enough we see our average home prices back up into the $250,000 range, where it averaged for most of 2011.

 



And our median home price is flat at the $225,000 range. 

There's no real estate gnome that comes out to ring a bell signaling the bottom of the real estate market, but if it turns out to be Jan '12, remember, you heard it here first!

How to Sell a Listing for an Extra 5.5%!

I made my sellers an extra 5.5% on their sales price!

Several other agents had told my clients that they couldn’t sell their home for more than $500,000!  I thought we could!  My CMA (Competitive Market Analysis) indicated that we could sell for somewhere between $500,000 & $540,000, so we listed it at $539,000 and went to work.

My team prepared our standard Big WoW Marketing Package (www.6243Rohnerville.com) and put the home on the market.  Within 2 weeks we had four showings and 2 offers. 

The first offer, from buyers in Portland & Santa Cruz, came in below $500,000.  When I presented the offer to my sellers, they wanted to know everything they could about the buyers’ interest level, and when I showed them our custom website hits by city, with Santa Cruz and Portland at #1 & #2, they realized that our buyers were very interested in their property.  We knew we had a 2^nd offer coming, so we prepared a counter offer at $535,000 and waited. 

When our 2^nd offer came in the next day under $500,000 as well, we decided to continue with our counter offer to buyer #1, and let them know that we had received a 2^nd offer.  When our first buyers heard that there was another offer on the table, they couldn’t sign our counter offer fast enough!  We opened escrow, and after our inspection period and some negotiations for repairs, we closed escrow at $527,500!

After the initial photos and the placing of a home in the MLS, most agents rely on the price reduction as their main tool to sell a home.  Hence, most agents thought this particular home would sell for under $500,000.  By engaging the buyers’ hearts and minds with our Big WoW Marketing Package, we were able to coax an additional $27,500 out of their pocket!  That’s an additional 5.5% of the expected value of the home!

So if you truly want top dollar when you sell your home, Big Wow Marketing is the ticket!  Obviously, I can’t guarantee you a specific sales price, but I can guarantee you the best marketing available in the real estate industry today!  And it won’t cost you a penny extra!

I Made My Sellers an Extra 6.7%!

I made my sellers an extra 6.7% on their sales price!

My client had been listed before at $1M with a different agent. He was shocked when I told him his property was worth $750,000. He really wanted to sell, and he loved my Big WoW Marketing package, with it's custom website, but he said he couldn’t go below $850,000. I told him I would market his property at $849,000, and we’d give it our best shot. If it didn’t sell, at least he knew that he was getting the best marketing possible, and we could either reduce the price or try again at a later date.

After 9 months at $849,000, the perfect buyers appeared from Los Angeles. They commented on each of their visits to the property how beautiful the website (www.15500DyervilleLoop.com) looked and how it showed off the property. So when they brought a cash offer at $700,000, we knew they were really interested.



I presented the offer, and my Seller decided to counter at $800,000. The buyers countered us at $750,000. I told my Seller that this was probably the best deal we would be able to get, and that I couldn’t even guarantee that it would appraise for more than this, should the next buyer need a loan of some kind. $800,000 was as low as he would go, though. I made the best case I could to the Buyers’ agent, and hoped for the best.



In the meantime, the website traffic for the home took off! Our weekly average went up over 300%. I can just imagine the Buyers asking themselves, “$800,000! Is this place worth it? What do they see in it? Let’s go look at that web site one more time!” And every time they did, the views and selling features wormed their way into the buyers’ hearts and minds.



Bottom line - they accepted our $800,000 counter offer and we closed escrow. My Big WoW Marketing made my Seller an extra $50,000, or 6.7%, in his pocket. And it didn’t cost him a penny extra!

If the only tool you have is a hammer, you tend to treat everything like a nail. If the only tool a Realtor has is a price reduction, the property seller is the one who gets beat on. Custom websites - with a 3-D custom floor plan, Virtual Tours with Hotlinks, and the unlimited ability to show off a property to a buyer- are changing the way we market properties. Embrace them, and put more money in your sellers' pockets. They will return the favor!

Do Custom Websites for Listings Work?

My sellers had already moved to Arizona when they called me in response to an expired listing letter. They had their home listed with another agent, it didn’t sell, and they weren’t happy with the agent’s efforts to sell their home. I explained my Big WoW Marketing package to them (see a sample at http://www.2972oldarcataroad.com/) and they listed their house with me, albeit at more than I told them it was worth. I suggested $325,000; they wanted to list it at $359,000.

A potential buyer called me soon thereafter. He was visiting from out of the area, and he had seen my directional sign on the main road, and had followed it to the property, where he pulled a flyer out of the flyer box. Intrigued by the photos and 3D floor plan, he called me to see the inside of the home. I called my assistant in that area, and she immediately met the buyer and his family and showed the home to them. They went home, and the next week called me to write up an offer.

They offered what I described to my sellers as “top dollar,” $335,000, and we put it in escrow. During our inspection period, the buyer found several key issues of which the sellers were not aware, including

• A failed septic tank.
• Significant pest issues.
• A failing roof.

Had we simply deducted the cost of these repairs from the purchase price, we would have been well below $300,000. Instead we re-entered the negotiating process. The buyer really wanted the property, and the seller was adamant about getting what they considered a fair price. Through much dialogue, we were able to arrive at a purchase price of $317,500, a price that was acceptable to both the buyer and the seller.

Toward the end of the escrow, I emailed my buyer regarding some final details, and asked if the Big WoW Marketing package we produced had helped him through the process. This is what he said:

Jeff,

… In regards to your website, it was very helpful and was instrumental in us making this decision. Its human nature to question a large purchase as time goes by and you can’t see what your contemplating buying…the fact that I could daily go to the site, share pictures with friends and keep the excitement going was probably the main reason we went through with the deal. I doubt we would have done the deal without the site.

Thanks again for all your help….look forward to meeting you at some point in the future.

John

Had we lost that buyer, we would have had to sell for under $300,000; instead we were able to sell for $315,500. That’s in increase of over 5%! The fact that Big WoW marketing engaged the buyer’s heart and mind on a daily basis from 250 miles away meant an extra $15,500 in the sellers’ pockets.

There's no question that custom websites for listings take more up-front effort and investment on my part. But not only does the increased sales price mean a bigger pay check for me and my sellers, the increased client satisfaction means more listings and more paychecks than I could accomplish without offering this Big Wow Marketing package.

Humboldt County, California Real Estate Statistics, July 2011

How is our local real estate market in Humboldt County, California performing, in the midst of all of the gloomy national and world economic news? Kinda yucky.


Our housing inventory, the number of homes for sale on the market, has been creeping up all year. We're not high beyond normal, but we are high enough that we might start seeing some downward pressure on prices.

The more homes we have that are selling, the better support we will have for prices. While we are up off of some of the scary bottom figures we've seen earlier in the year, we are not selling so many homes that it looks like prices are going to start moving up again any time soon.

And sure enough, our average sales price continues our ooze downward. Our average sales price has been lower than the year before for 5 of the last 7 months, and 25 of the last 31 months. But don't panic. This too will pass. We won't know it's the bottom of the market until we've already passed it.

The median price has graphed similarly to the average price.

There is no little man that comes out and rings a bell on the day that the market hits bottom. It could be next month, or today, or last week. We have a great selection of homes, the best interest rates in years, and you gotta live somewhere. And rents are very strong relative to price. We will look back some day, and say, "I sure do wish I had bought real estate in Humboldt County in ___," and there will be a date in that blank. We just don't know if it's today's date, or tomorrow's!

Good Video, Bad Video, for Luxury Homes

The marketplace is changing, and no place faster than real estate. One of the hot new developments in the marketing arena is the use of video. All of the guru’s are saying that we as Realtors must use video to show off our listings. Is this a good, necessary thing? If it’s done correctly, yes!


Many agents are using smart phone technology to do a video “walk through” of their listings. Beware. These are often of a poor technical quality and not well thought through. I’ve actually experienced the beginnings of motion sickness after watching some of them, and others don’t really give a good overview of the selling features or the feel of the home.

Other agents are using photo viewers to give the appearance of video, utilizing the basic still photos they’ve already taken of the home. This serves the purpose of “using video,” but little else. On several occasions I’ve noticed people standing, frozen, in the “video.” This is no better, and perhaps worse, than some good, quality photos.

Video shouldn’t take the place of good photos or virtual tours, but should show off an aspect of the home that can’t be captured through these other media. Video is great at showing movement and character and interaction. That’s why I employ a professional videographer experienced in the medium. He can capture the features and ambiance of the home in a way that best shows it off to prospective buyers.


Sometimes he will interview the owner or builder of the home, using their vast knowledge of the property in a tour through the home. (See the video link at www.6243Rohnerville.com for an example.) This enables us to communicate a historical or personal angle easy to miss through traditional media. It also allows the seller or builder to highlight features that only he knows about.

Other times my videographer will video the actions of the home itself. A fire burning in the fireplace; a creek rippling across the land; wildlife admiring the view; raindrops falling on a pond; trees swaying in the breeze; waves crashing on a beach. All very provocative images that help imbed your home in the hearts and minds of potential buyers. You can see a great example by pressing the video link at www.290Barley.com .

Other times he will create a webisode, a program featuring characters and a plot line, with the house as the star. This shows people interacting with and enjoying the home in a way that potential buyers can relate to. A luxury home is just as much about a luxury lifestyle as the home itself.

Using video, especially bad video, won't help to sell a home. Good video, done right, will hook that buyer's heart and mind, giving my listing that little edge over the competition.

How Do I Rent-To-Own?

Lots of times potential buyers ask me about a rent-to-own home purchase.  In California, rent-to-own purchases are most commonly done as a "lease-option," where the buyer makes an offer to lease the property over a defined period, with the option to buy it in the future at a pre-agreed price and set of terms.

 

The first stage is to offer terms of a lease. Often a buyer might offer to lease a $300,000 property for a year at $1500/month, with $200 of that being applied toward the purchase price, should the buyer exercise his option to buy the property at the end of the year. Other lease terms regarding insurance and damages and such would be included in the terms.

 

 

 

Then, along with the lease offer, an option to purchase is offered. The option might be exercised in a time frame of 30 days before the lease expires, although any time frame is negotiable. The offer sets an agreed price of, say $300,000. And the offer includes "option money," a fee that should motivate the seller to agree to the whole process, say $5,000. Additionally, the other terms of a sale such as paying for title and escrow fees, inspection periods, and such are agreed upon in the option agreement.

So, in this example, the Seller get's a $5,000 fee up front in cash that he gets to keep, whether or not the option is exercised by the buyer. The Buyer gets to live in the home for $1500/mo, $200 of which will come off the purchase price when he buys. And when the year is up, he gets to buy at a prearranged price...if he still wants it. If the market tanks, he can walk away, and the seller can put it back on the market.

 

Of course, all of these terms are negotiable, but this illustrates the basic framework of a lease-option purchase.  Very few lease-options ever come to close, but for some buyers they can provide a creative way to get into a property that otherwise wouldn't be available.

Humboldt County, California December Real Estate Statistics

I’m a little late getting these stats our, but the real estate market in Humboldt County, California is hanging in there during the month of December!

At the beginning of 2011, there were 550 homes on the market, which is right in our “normal” 500- 550! Fewer homes on the market, of course, supports prices and keeps them from falling. That’s good.

And we had an uncharacteristically high 75 homes sold in December in Humboldt County! That’s the highest count since September, and during what is historically one of our lowest months!. Of course, more homes sold puts upward pressure on prices.

The average sales price of a home came down from November, but remember, that was a very uncharacteristic month. There were 6 homes sold in November for over $500,000, one for $2.2 million! So while December’s average home sales price was down from the previous month, it was a solid $270,993, pretty close to the average for the year of $278,000!

The median home sale price in Humboldt County for December was a little scary, though, down to $235,100, a recent record low! We’re still 3 for 4 so far in the statistical categories!

Are we turning the corner? Have we bottomed out and started looking up? So far in January ’11, things continue to look solid. Over the last 30 days we have sold 78 homes for an average sales price of $261,499, and a median sales price of $243,450. Our lead indicator is volume; as it moves up, prices will follow. So, are we turning a corner? Just asking that question honestly is a good sign!

Humboldt County, California November Real Estate Statistics

I’m a little late getting these stats our, but the real estate market in Humboldt County, California is hanging in there during the month of November!




There are currently 568 homes on the market, which is just a hair higher than our “normal” 500- 550, and close to our recent low of 550. Fewer homes on the market, of course, supports prices and keeps them from falling. That’s good.

The bad news is that we only sold 57 homes in November in Humboldt County, a recent record low for the month. Fewer homes sold puts downward pressure on prices. Perhaps these 2 figures balance each other out?

We’ll have to wait and see, because there were 6 homes over $500,000 that sold in Humboldt County in November, one for $2.2 million! That really skewed our average sale price up to a 30 month high of $325,809!

And the median home sale price in Humboldt County jumped up to $250,000, which is right in line with the average median home sale price all year!

Overall, this report, like so many others this year, points to a bottoming out of the market. When is the market going to improve? Nobody knows, but there’s only one direction to go from the bottom; up!



What Are Closing Costs?

First time home buyers often ask about closing costs, and it can be very confusing, especially when they have limited funds to bring into escrow for closing, or when they are shopping multiple loan products with different costs structures. It’s important for all home buyers to remember that there are 3 different types of closing costs.

Title and escrow fees, and county (or city) transfer taxes comprise the first general category of closing costs, often know simply as escrow fees. These are fees that must be paid to sell a home; and all three items are specifically addressed in the California Real Estate Purchase Agreement. While the responsibility of paying these fees is completely negotiable, in Humboldt County, California these fees are most often split 50/50, with both the buyer and the seller each paying half.

The second general class of closing costs is prorations or prepaids, most often taxes or insurance payments. If a home is sold on Nov. 30, but the seller has paid his taxes through the end of the year, then the buyer must pay the seller back for the December taxes he has already paid; these are paid back on a prorated basis. Similarly, lenders often require that a new home owners insurance policy be paid up a year in advance. This is prepaid at the closing of escrow. In Humboldt County, these are typically thought of as buyers expenses, as they go to service the home during the period after the buyer has taken ownership.


Similarly, the third class of closing costs is the buyers’ loan fees. Each lender will charge a variety of up-front loan costs that range from small administrative fees up to much larger commissions or origination fees to pay the loan officer. These are fees a buyer pays for the privilege of getting a loan; a cash buyer would not pay any of these because he’s not getting a loan. Therefore, in Humboldt County, they are most often seen as a buyers’ expense.

Prorations and loan fees are not specifically addressed in the California Real Estate Purchase agreement, but they, as well as title and escrow fees, can be negotiated in the contract. The buyer can pay them all, or the seller can give a credit to pay them at the close of escrow, or they can be split in any way agreeable to both parties. It is important for a buyer to know what the different closing costs are and how much they will cost so that they can have confidence that they can meet all of the terms of the agreement.

If you’re not sure whether you have enough money saved up to buy your dream home, give me a call at (707) 499-7111, or email me at Jeff@RealtorJeff.net, and we can discuss options.

October 2010 Humboldt County Real Estate Market Statistics

What do our October 2010 Humboldt County, California real estate statistics look like?  We seem to have started a downward trend in prices again in Humboldt County, California. The number of active homes on the market, while not a huge number, is creeping up in relationship to previous years. We now have 677 homes active on the market; that’s much closer to 2008 levels than 2009 levels. And more homes on the market will mean downward pressure on prices.

Especially when the number of homes sold is down as well. At 72 homes sold, we’re just a hair below 2008 levels, but well below the 88 homes sold in 2009. While not by much, this is the lowest number of homes sold in the month of October in recent memory. This, too, will put downward pressure on prices.

The average home sales price for the month of October was $256,572; not the lowest of the year, but the lowest for any October in a long time. It also continues the downward trend started from the most recent peak in July.

And the median home sales price in Humboldt County was $236,375, which does represent a new low for the year and for recent history.

It seems that the large number of short sales and bank owned properties, or REO’s, in the market is causing our downward trends. 26% of the homes sold in October were either short sales or bank-owned properties; that’s up from 18% for all of 2009. And not only do short sales and bank-owned properties sell for less, they compete with regular sellers, thereby putting downward pressure on all real estate prices. While the rest of the country has been dealing with this level, and even higher levels, of bank controlled sales, this is a first for Humboldt County. Is there a bright spot in the clouds? Yes: it is a great time to BUY real estate!



What questions do you have about short sales or bank-owned properties? Give me a call at (707) 499-7111, or email me at Jeff@RealtorJeff.net.

A Lesson for Victorian Homes from the Eureka, CA Earthquake

Many of you will recall that Eureka, California made national news on January 10, 2010 when a 6.5 earthquake rocked the city. We counted our own blessings, and were promptly forgotten by the rest of the world, when 2 days later when a 7.0 earthquake destroyed the country of Haiti. We in Eureka were truly fortunate, as there were no injuries, and relatively little property damage. My family lives in a 1902 Queen Anne Victorian home in the Henderson Center neighborhood of Eureka, and we sustained some property damage as our home rolled with the ground – lots of broken glasses, some dumped bookshelves, and our spice rack got de-alphabetized. (tear, sniffle)


Like all Californians, though, I know the “big one” is coming, so I immediately vowed to put a concrete perimeter foundation under my Victorian as soon as I could afford it. When a friend asked me how we had fared during the earthquake, I mentioned my plans. He gravely told me that was a bad idea, as the rigidity of the concrete perimeter would transfer more of the force of the earthquake to my home, thereby causing more structural damage; but the original post and pier foundation would allow the home to roll with the ground wave, and minimize the structural damage. “Why in the world do so many other updated Victorian homes have concrete perimeter foundations?” I thought. Hmm. What to do?

A couple of months ago I was visiting with a local civil engineer, Neale Penfold Sr., about the home of a client, and it was evident to me that he was in the talking mood after a long day. I decided to make it productive talk, so I asked his opinion; “Which is the better foundation for a Victorian home to survive the next big Eureka quake, a post and pier foundation, or a concrete perimeter?” He said, “Neither.” Mr. Penfold confirmed that post and piers allowed a home to flex, and that a concrete perimeter did indeed transfer more shock to the home.

He went on to explain a 3rd way. He said that lots of folks in the Eureka area have had lots of luck with a reinforced, braced post and pier system, whereby the posts are set on structurally enhanced concrete footings much bigger than the originals. The house is then attached to the posts, and the posts to the piers. Finally, the piers are cross-braced pretty extensively to one another. He said that this combination had the flexibility of the post and pier foundation, and the strength of the concrete perimeter foundation, and with the added bonus of being cheaper to boot!

Any other California Victorian owners out there? What experiences have you had with your home and earthquakes? Send them to me at Jeff@RealtorJeff.net!

Humboldt County, California Real Estate Statistics, September, 2010

What is the state of the real estate market in Humboldt County, Califorina? Our "Active" homes, while starting out the year lower than last year, crossed over 2009 in August, and have been tracking slightly higher than last year since. While this certainly isn't bad news, it does neutralize one of the good pieces of news we had through the first half of the year. If real estate inventory is down, it would certainly seem to put upward pressure (or neutralize any downward pressure) on home prices. Moving from under to over 2009 just removes a little reason we have to be optimistic.

Similarly, our monthly "Sold Homes" numbers were running higher than last year until July. They dipped under 2009, and started tracking pretty closely with 2 of the 3 most recent years. Again, this isn't bad news in itself, but it does take away one of the main real estate market factors for keeping home prices flat or rebounding. It seems to indicate that the same ooze south we've been seeing for the past 2 years is not finished.

Sure enough, while it's not a lot, the average home sales price insists on tracking just a bit below last year. Indeed, our real estate sales prices do seem to be going ever so gradually lower.

Our median home sales price is a little more decisively lower. It has been below our psychological $250,000 floor for over half of the months so far this year. It is pretty clearly indicating that Humboldt County home prices, while not falling dramatically by any means, are in a pattern of gradually lowering.

Does any of this worry me? No. One day in the future, you will be sitting around with your friends, and someone will say, "Dang, I wish I would've bought real estate in Humboldt County back in ____." And there will be a date in that blank. It could be September, '10. It could be October, '10. It could be January '11. It could be May of 2013. We don't know, but I am relatively sure that, with the elections coming up in a month, that both the Federal and California state governments will be making some changes that will improve our economic situation, and with that improvement will come a bottom and a turn up for the real estate market.