Thursday, February 15, 2018

10 Real Estate Trends to Watch in 2018 (part 2)

2018 is already well underway and that includes the real estate market, as homeowners, sellers, and buyers alike all have critical questions about what the rest of the calendar year will hold.

For the third year in a row now, we've combed the best research by economists, analysts, and experts and summarized it for you with these ten real estate market trends to watch for the rest of 2018 – and beyond. 

In part one of this blog, we covered the first six of these ten trends to watch, so here are the final four (plus, a bonus trend).

Are you thinking about selling your home and moving up to your dream home this year? Finally investing in rental properties? Or maybe selling and downsizing? How will interest rates affect the real estate market?

You'll definitely want to read this so you can make the best, well-informed decision.

7. The GREAT news – experts predict a “soft landing”
Will home appreciation slow in 2018? We certainly hope so.

That may sound contrarian coming from someone that makes their living selling real estate, but the simple truth is that we all still feel the sting from the housing crash and Great Recession, and want to avoid those mistakes at all costs. 

Thankfully, white-hot home appreciation that is based on the "Gold Rush mentality," artificially-low interest rates, and reckless bank lending is a thing of the past.

In today’s real estate cycle, expansion is slowing, which is a completely normal and even healthy process of any market. There are still a whole lot of factors encouraging people to buy homes, as well a few economic fundamentals that point to caution. But that’s the sign of a balanced market, which is always best for everyone. 

Caution, common sense, and the impetus to buy or sell a house ONLY if it’s priced fairly act as parachutes, keeping the housing market from ever falling too quickly. 

And in Sacramento, there are even more factors that point to a home price gains this year, albeit a little bit slower and more measured than the last few years. That should inspire even more consumer confidence that the highs will be rolling hills, not sheer cliffs, and the real estate market will be strong for a long time to come.

8. Housing technology science fact not fiction
We often talk about breakthroughs in new technology for homes and real estate, but it usually applies to space-aged appliances, really cool TVs, and state-of-the-art remotely operated security systems, etc. 

But technology is shooting past luxury amenities and this year, as practical high-tech housing will rule. For instance, the incredible demand for affordable housing (homeownership rates are at an all-time modern low AND rents are rising steadily in most major markets) is pushing companies, investors, and inventors alike to create new solutions. Prefab homes that can be helicoptered in and dropped on location, homes that are 3D printed within one day, and other ingenious home construction advances aren't just a thing of science fiction, but present-day fact.  

Tech evolutions in the luxury marketplace, like sinking floors, shape-shifting walls, and complete automation of every light, door, and system in your home are sure to continue, but technology will really skyrocket when it solves real-world problems for the entire housing market. So,  2018 will be the year we look back and say it was a “tipping point” in that technology. 

9. Inventory better, but still lags
We still don't have enough houses for sale around the country to fulfill the demand, whether new construction or existing homes. In fact, while more projects that were initiated in 2016 and 2017 are finished in 2018 and available for a resident, the inventory shortage still has a long way to go. Somehow, rental prices are surging in most metro markets at that same time as home prices because of this shortage, and that double-edged sword is especially true in the Sacramento area.

Of course, no one could have anticipated the additional home shortage caused by the myriad natural disasters we suffered through in 2017. In some cities and states around the country, millions of homes were lost – for both owners and renters – due to flooding, tornados, wildfires, etc.

But the need for housing also presents incredible opportunities for landlords, investors, savvy homeowners, and even first-time buyers who put in the time and work to find the right home in 2018.

10. Tax bill shakeup
No matter where you sit on the political spectrum, the recent passing of a historic tax bill still poses more questions than it does answers. Will a rising economic tide “lift all boats” – including the real estate market? Did saving (although capping) the Mortgage Interest Deduction make it a non-factor for homeowners? Or, will the sting from new property tax rules further slow homeownership rates? We’ll find out in 2018!

Bonus trend:

Interest rate roundup
In part one of this blog, we pointed to a possible interest rate “nudge” this year, as we predicted 30-year mortgage rates settle somewhere between 4% and 4.5% this year. Since writing that only 45 days ago, guess what happened? As predicted, rates are already hair higher than we enjoyed in 2017, but rates are still FANTASTIC if you view them through a long-term lens. 

Just as important, banks will continue to ease lending standards and loosen their guidelines as the economy bustles, making homeownership a reality and more affordable for tens of millions of Americans. 

2018 is already turning out to be a great year to buy or sell a home!

Wednesday, February 7, 2018

The Evolution of City Planning in America.

“A city should be built to give its inhabitants security and happiness.”- Aristotle

Way back when America was still a smattering of outposts and colonies, not even a country yet, little conscious thought went into planning towns. The first settlements, such as Jamestown, Boston, and New Amsterdam, followed no systematic design.

However, as early as 1638, the first evidence of modern town planning was seen in New Haven, Connecticut. In the birthplace of the Yale University campus, New Haven featured nice large squares of common areas carefully arranged in rows of three (still to this day called the “New Haven Green”). With a church in its center and business and government buildings on its perimeter, this layout became the standard for planning many subsequent Colonial towns.

These common greens, wide streets, canals within the city, etc. served two other important purposes. Too often, densely packed and ill-planned population centers in the 19th century were susceptible to the spread of fires and also disease, but modern planners were wise enough to create buffer zones to help contain both. 

Thereafter, cities were expected to offer solutions to social problems – not just cause them.

City planning took a step forward in 1748, when an architect named Giambattista Nolli was the first to map out an entire city, including streets, parks, common areas, and important buildings, from a bird's eye view with no central focal point – called the Nolli Map.

The task of preparing for the growth of cities soon spawned a new field: city planner, as well as organizations and groups meant to empower its members. In fact, the American City Planning Institute was formed in 1917, and The American Society of Planning Officials in 1934.

In the 1800s and the first part of the 20th century, cities were built fairly haphazardly, with communities springing forth in a spiraling outward pattern without rhyme or reason. However, the advent of steel in construction changed all of that in the 20th century, with industrialists taking advantage.

Soon, cities were being built upwards towards the sky, with a focus on population density – not growing outwards. In major cities like New York and Chicago, skyscrapers exploded towards the heavens, with banks, department stores, theaters, and office buildings following suit.

Suddenly, the concept of city planning was no longer a two-dimensional task envisioned at ground level, but in 3-D with the element of altitude. For instance, newly laid streets had to adhere to the Setback Principle, developed by architect Hugh Ferriss in 1916. Streets had to be 50' to 100' wide in order to accommodate wider and taller skyscrapers, following a standard ratio of 11:2 (height to street width).

To service the growing number of new workers who needed to access these centralized downtowns, mass transit evolved, too. Most people that worked and played in the city centers no longer lived there, but commuted in from “streetcar suburbs,” which were new subdivisions laid as an extension of the downtown grid and sold parcel by parcel to homeowners, developers, and businesses.

In response to the rapidly over-crowded new cities, iconic architect and designer Frank Lloyd Wright was perhaps one of the fathers of the modern suburb. He took the model for the urban grid and transposed it into the countryside, planning structured and aligned communities where each family had exactly one acre of land.

Likewise, urban planner Le Corbusier wanted to solve the issue of overcrowding in cities by building mass housing up, not out, and his ideas became a major influence in designing high-rise public housing decades later.

Through the 1950s and 60s, architect Kevin Lynch looked to plan cities not from a top-down approach, but considering the actual experiences of regular people and inhabitants within the city. This bottom-up approach to city planning changed the landscape of blossoming metropolisis forever after.

In 1961, city planner Jean Gottamn also started considering a new phenomenon among cities – “megaregions.” He was one of the first to think about cities not as individual self-sustaining units, but within the context of other mega population centers in the region. Therefore, issues of transportation, the economy, and the environment were considered on a regional or multi-city perspective.

A renowned city planner named Andres Duany expressed his vision for the next era of urban planning in 2000 with his "Transect" approach. These take the traditional grid system but section it off into six zones, each progressively more green and less urban. Starting with SD (Special District, then T6 (Urban Core), the Transect continue with T5 (Urban Center), T4 (General Urban), T3 (Sub-Urban), T2 (Rural), and then T1 (Natural).

You know which city follows this general outline, although unwittingly? Sacramento has its Old Town as the Special District, downtown giving way to midtown, and then more rural and green East Sacramento and wooded campus of Sacramento State.

So what’ss the future of city planning? Smart cities that are walkable or easy to navigate via public transport, integrate urban forests and plenty of green areas, and are equipped with usable smart technology are on the horizon.

Look for part two of this blog where we cover the advances in technology, environmental control, and planning that will go into our smart cities of the near future.

Thursday, February 1, 2018

The Mark of Success: 50 Common Traits of Prosperous People (part 2)

What can we learn from the most successful people in the world? In fact, just about every individual that’s become a leader or icon in their chosen vocation have the same traits in common.

Some of the most successful people in recent history include Bill Gates, Warren Buffet, Jeff Bezos, Richard Branson, Mark Zuckerberg, Oprah, and Elon Musk, establishing important legacies that benefit society. But apart from being ultra-rich and powerful, they have far more in common than you might think.

In part one of this series, we covered 25 traits of the world’s most prosperous people, which was warmly received with your questions, comments, and observations. So, we’ve worked hard to isolate the next 25 common traits of the rich, successful, and powerful here:

26.      Incredible communication skills.
High achievers are almost always great communicators, interacting with others efficiently using simple, clear, and concise messages, whether in person or in writing.  This also includes the ability to actively listen – a vastly undervalued skill.

27.      Masters at conflict resolution.
Industry leaders and icons don’t shy from conflict. Known as straight-shooters, they understand that it’s a healthy and necessary function of growth. That doesn’t mean they’re necessarily aggressive or combative, but let others speak their minds, vent, and advocate for their own opinion, just like they do. By facing conflict head-on, they’re able to work through it, solving problems instead of letting them fester.

28.      They keep their egos in check.
Successful people want to learn from others so that they can constantly grow and improve.  Instead of taking things personally and quickly becoming defensive, maintain perspective and seize the opportunity.

29.      Adopting others’ viewpoints.
The mark of a great mind is that it can consider two opposing viewpoints at the same time.  Leaders and succeed-ers can do the same with people, having empathy for others by adopting their viewpoints. They are always looking to add information to their existing opinion, which remains open and flexible.

30.      They outsource. 
We may think that top producers are control freaks and do everything themselves but, in fact, they actually maximize time, energy, skills, and income by outsourcing whenever possible. They do the math and figure out when it makes sense for them to handle certain tasks, or when to assign it to someone else. 

31.      Teamwork.
Achievers work with the best financial planners, tax professionals, attorneys, and other skilled professional they can find.  They build epic teams, and outsource as much of their systems as possible, understanding their role and focusing on their own strengths.

32.      Focus on interpersonal relationships.
Genuine, personal relationships are invaluable. Prosperous people don’t rely on technology to establish and fosters relationships for them.  They call and talk, set up meetings and take the time to interact – face-to-face whenever possible. They also give you their undivided attention and interest when speaking with you.

33.      Eating right.
Hi-power thinkers, achievers, and do-ers take great care of themselves, and that starts with eating right. The brain won't run optimally without the right fuel, and a healthy routine is essential for the heights they are climbing every day.

34.      They heed their creative/energy time.
It’s fascinating when you look at the creative cycles of geniuses; not only do they understand their optimal thinking and working times, they block that time and protect it fiercely.

35.      Stay active.
Just like with food, exercise is a big piece of staying on top of success. No matter how busy they get, successful people have a very regular exercise routine as well as making their health a priority.

36.      Relaxation.
Successful people are able to breathe, stay calm, and think clearly because they regularly decompress to shed the extreme stress of their day.  Their relaxation ritual can be simple meditation, yoga, getting a massage or going for a walk. 

37.      Stamina.
This trait is usually overlooked, but successful people work long hours and expend incredible amounts of energy day after day. They understand that special achievements take special perseverance over the long haul. 

38.      Quality time.
No matter how busy they are, successful people schedule time off to spend time with their families, see friends, and enjoy their lives. 

39.      Fun!
Likewise, winners embrace the journey, not the destination and have fun as they work, play, or whatever they’re doing. That positive outlook rounds out their lives.

40.      Financial discipline.
The billionaire not-quite-next-door is extremely careful and structured with his or her money.  Even before they achieve wealth, they track all of the income and expenses, whether it’s by inputting them into a spreadsheet, saving receipts, or using tracking software. 

41.      Lack of conspicuous consumption.
Research shows that when people have earned large amounts of money, they still rarely show off their wealth.  In fact, owning things is not really the point of their existence. Instead, they save and reinvest for the long term, using their wealth to pay for experiences, rather than things.

42.      Quality of life.
The wealthy do go on adventures, occasionally treat themselves to luxury items, and will go all-out for their families, but they do these things within a larger framework of smart planning and understanding value.

43.      Big picture thinking.
People who live meaningful and comfortable lives don’t buy assets with the exception of quick riches or short-term gains. Instead, they make quality investments and hold them, with the eye toward creating something that will pay them back many times over the decades.

44.      Invest young.
Even in their 20’s, these folks understand the power of compounding.  By putting money into 401k’s, Roth IRA’s and the like early, they benefit from high returns as they get closer to retirement.

45.      Automated savings.
Whatever they earn, successful people break off a tiny piece and stash it, deducting it directly from each paycheck. This is what they mean by “pay yourself first,” as it gives them a solid foundation to invest and grow before they ever touch the rest of the funds for basics or play.

46.      Plan for rainy days.
Successful people may take risks, but they definitely are pragmatic as well, planning and preparing for the unforeseen. They keep a good amount of savings, make sure they are well insured and protected, and generally minimize liability in every aspect of their lives.

47.      They pay off bad debt.
Interest from credit cards, car loans, and other credit is a silent killer for many family budgets. In fact, successful people universally pay off credit cards, car loans, small installment loans, and don’t carry personal debt on a month-to-month basis. While they often pay off their mortgages as well, they distinguish between “good debt” that helps with investment, taxes, and credit, and “bad” debt that just depletes their bank account.

48.      They can be great because they can serve.
These people reach a certain height of success where happiness is measured by how much they can positively impact the world, not just themselves. To do so, they serve on Boards, advise, mentor, attend community meetings, vote, and even support politicians that serve in their civic interests.

49.      A core of altruism.
From Bill Gates to Warren Buffet to the Oprah, just about every notable accomplished person donates significant sums to those in need. But they create the convenient excuse that they’ll become rich first, and then start giving; they make it a part of their life from early on.

50.      They love to work, and never want to quit.  
People who lead truly exceptional lives rarely look forward to a time they can retire and stop working Instead, they are extremely passionate about what they do for a living. Their work brings them joy, so they want to keep being productive as long as they can!