Recent report states that California has the worst quality of life in the U.S. (Recent report is crazy.)

The headline jumped out at me immediately: “California ranked as the worst quality of life in the U.S.”

I dismissed it as more fake news, or possibly a satirical headline written by The Onion.

But then I saw it again, and it was referencing a study conducted by the well-respected US News & World Report.

In fact, this same headline about California’s dubious rating was being reported by just about every media outlet across the country. Ludicrous as it sounded to anyone who actually LIVES in the Golden State, my curiosity got the best of me, so I clicked and read the entire article.

My conclusion? They’re flat-out crazy.

In fact, California should rank right at the top of any list for quality of life in the U.S.

Before I make that case, let me rewind and tell you a little more about this news story.

U.S. News & World Report released their annual study based on two years of data and 30,000 respondents, in the end ranking all 50 states for several factors and revealing the best state in the U.S. to live.

When they added it all up, Iowa ranked #1 as the winner. Let that sink in.

Second was Minnesota, and the rest of the top five went like this:

3. Utah
4. North Dakota
5. New Hampshire

To be clear, the study didn’t conclude that California was the WORST state to live in, just that it ranked dead last for criteria number 8 on the following list of factors, quality of life.

The survey’s categories were:
1. Health Care
2. Education
3. Economy
4. Opportunity
5. Infrastructure
6. Crime & Corrections
7. Fiscal Stability
8. Quality of Life

Overall, California ranked #32 (which still isn't that hot), way behind perennial hot spots like New Jersey (#19) and Nebraska (#15). Riddle me this: when was the last time someone said, "I really want to move to New Jersey," or wrote a song about Nebraska?

(For the record, there are 583 songs about California and only one, Bruce Springsteen’s curious ‘Nebraska’ about the state with that name.)

Earning dead last overall as the best place to live was Louisiana, with Mississippi #49 and New Mexico #48.

But let’s refocus on the topic making headlines: California ranking #50 for quality of life. North Dakota won top honors, with Minnesota #2 and Wisconsin #3.

Dubious choices, at best. So, how was the quality of life determined? The scores were based on two meta-categories: social environment (50% of the score) and physical environment (the other 50%).

According to their study, Social Environment includes:
1. Community engagement
2. Social support
3. Voter participation

The first two items make perfect sense, as they polled how often respondents engaged in community events as well as spent time with family and friends.

“In addition to a healthy environment, a person’s quality of life is largely a result of their interactions with those around them,” explains the U.S. News & World Report editors. “Studies show that when people feel socially supported, they experience greater happiness, as well as physical and mental health.”

But voter participation as means to measure social environment? They just measured the average voter turnout for the 2016 congressional and presidential elections and used that outcome.

When it comes to social environment, Alaska, Montana and North Dakota were at the top of this list.

The next factor is Natural Environment, which includes:
Drinking water quality
Air quality
Total toxic chemical pollution per square mile.
Risk of chronic, long-term health effects due to pollution

Understandably, places like LA (and even Sacramento Valley during allergy season) may drag down the air quality index, but I can’t envision the great state of California, with all of its national parks and natural wonders, being such an atrocious place to enjoy the great outdoors?

But while California did represent in the ‘economy' category (#4 in the U.S.), it also was #46 in citizen opportunity, #43 in fiscal stability, and, like we mentioned ad nauseam, #50 in quality of life.

Of course, California is a big place, and you rarely hear people complain about how terrible their quality of life is in San Diego, how un-social it is in LA, or how the natural environment is lacking in San Francisco.

As for our own local Greater Sacramento area, there’s a whole lot going for us – right here at home and also nearby – that speaks to an amazing quality of life:

• San Francisco and the Bay Area is an easy drive or train ride away.
• Incredible pro sports like the Warriors, 49ers, Raiders (if you consider them incredible!), A’s, Giants, Sacramento Kings, and the like.
• Napa Valley and some of the best wine (and wine country) in the world.
• Lake Tahoe!
• Speaking of which, we have some of the best skiing, snowboarding, etc. in the U.S. right in Tahoe.
• Unlimited hiking, camping, fishing, boating, and nature-loving in NorCal.
• Some of the best of California history in and around Sacramento.
• Plenty of sunny, warm weather but also the chance to see the seasons change.
• Easily affordable real estate compared to prices in the rest of the state!
• A fast-growing economy, rapid redevelopment, and outstanding Sacramento civic pride!
• Some of the friendliest, coolest, and most friends and neighbors people in the world!

Come to think of it, I'm starting a new poll and, according to this guy, California ranks #1 in Quality of Life in the entire U.S.!

What's old is new; why farmland is the next great real estate investment.

Savvy investors are doubling down on an unexpected class of real estate that may just be the next big thing – farmland. While we’ve seen institutional investors, REITS, and builder’s focus on condominiums, shopping malls, and office spaces in the past, the winds of change have definitely shifted toward farmland and agricultural property.

While we may not think of owning vast tracks of tillable soil in the boonies as a sound investment, the facts paint quite the opposite picture. Since the end of World War II, farmland and agricultural land has risen steadily in value – even outpacing conventional home real estate – without the bubble-bursting downside. In fact, farmland has appreciated in value every year since WWII except for four – 1983, 1985, 1986, and 1987. According to the latest USDA figures, average Midwest farmland values have risen 128% over the past decade.

Why is dirt such a prolific appreciator? There are many benefits to owning rural or farmable agricultural property. But investors seem to be intrigued by hands-in-the-soil wisdom you might find in the Farmer’s Almanac; farm land is tangible, not some over-inflated balloon of tech concepts in Silicon Valley. You can walk the rows and touch the stalks. They aren’t making any more of it. And the population is growing – which means there’s an ever-increasing demand for food. 

According to the Food and Agriculture Organization of the United Nations, “the rise in local land prices has been fueled mainly by a worldwide agricultural commodity boom that has driven food prices up by more than 100 percent since 2003.” That’s a thirsty market for the most basic of necessities, and smart money wants in.

The farmland boom isn’t just in the United States – from Bulgaria to China to Africa (especially Africa,) huge institutional investors, sovereign wealth funds, and even the Mormon Church have been snatching up tillable acreage in the last few years with the ferocity of those betting on a sure thing.

The data confirms; farmland has outclassed the stock market since the late 1990s.  Iowa State University recently reported that someone who bought in 2000 and sold last year would have earned a 12.6 percent annualized return on his investment. While that’s remarkable in its own right, the lure of agricultural land goes further because it’s income-producing property.

“Me, a farmer? But I kill all my houseplants, and I don’t even own a pair of overalls,” you may be saying right about now. Of course we don’t recommend moving out into the country and dropping your briefcase for a pitchfork. Instead, agricultural land can easily be leased out to a farmer who does know what he or she is doing. Once investors acquire the farmland, they rent it out to a tenant like any other income producing property, but this tenant plants soybeans or corn or wheat and split the profit with the landowner. In areas where large plots of agricultural land sit, there are plenty of farm-management companies who place landowners with eager farmers, based on the prevailing rent-to-value ratio of the land.

Thanks to the tornado of investors that have touched down in farmland, the amount of owner-operated farms in places like Iowa and the Midwest have dropped from 55% in 1982 to less than 40% in 2012.

What else makes agricultural land so attractive?

The sheer enormity of supply and demand based on our rising population is hard to ignore. Land is, of course, the definition of a fixed supply. A population in developing countries is expected to rise to 9 billion by 2050, up from our current 7 billion. Even in wealthy and developed countries like the U.S., higher demands for meat require more grazable acres and livestock grain supplies. Therefore, on a per capita basis, the amount of arable land available will decline over the next few decades, from 0.218 hectares per person today to 0.181 hectares per person in 2050.

But just like residential real estate, farmland allows leveraged buying; the bank is your partner. Your debt to income ratio will be lower than typical residential real estate, where you traditionally put 20% or less down, but farm owners and operators can also get loans for operational costs at low interest rates.

No different than the duplex you buy and rent out to tenants, your farmland can be leased to a professional farmer. But there are far more ways to generate revenue streams on agricultural land – including crops, livestock, hunting leases, recreational leases, marketable timber, water rights, or mineral rights.

Despite what you’ve seen in all the cliché farm movies, the government is actually your biggest ally when it comes to keeping your investment fertile. There are numerous of State and Federal programs to cost share, subsidize, and offer cash flow assistance to farmers. (Think about it – the government wants to incentivize food production and keep real consumer costs as low as possible.) They even have conservation programs for wildlife habitats or water filtration practices that could put cash in an owner’s ever-expanding wallet.

On top of all that, the demand for biofuels is skyrocketing. According to the Renewable Fuels Association, ethanol production now accounts for 23% of all corn crops in the U.S. That’s one of the reasons why corn prices have more than tripled between 2005 and 20012. So with farmland, you have an appreciating asset used to produce an appreciating asset.

Similarly, the tax benefits are profound. Mortgage interest for your farmland is deductible, but that’s just the start. Farm leases, improvements, planting costs, and equipment purchases are all tax-beneficial, and farmland  - as a class of commercial property – is eligible for 1031 exchanges, where it can be sold and exchanged for like-kind property without capital gains tax hits.

Investors also love the fact that farmland is a fantastic asset to diversify their portfolio. In fact, agricultural income-producing land is negatively correlated with assets like stocks and bonds and even run on different tracks than residential income properties, which means farmland is a major hedge against rising inflation.

Of course there are concerns and drawbacks. For instance, farmland is extremely illiquid, so an investor should plan for the long term when formulating an exit strategy. Value of the land and income is also volatile in the short term, as it’s tied to crops that can be affected by draughts, floods, climate, insect infestation, disease, consumer trends, and global-macro events.

The good news is that we’re not just taking about hundreds of acres in places like Kansas, where the downside is that…well, that you’d have to live in Kansas. Virtually every state has agricultural and farmland available, based on localized crops. Napa Valley’s grape production is a good example of that, as well as the various orchards, ranches, and dairy farms in Northern California. 

Contact us to find out more about available farmland in your area!

Placer County's gold country a hidden treasure for wine lovers.

Did you know there's a special place, nestled in Northern California's foothills, close enough to the ocean but with enough sunshine and just the right temperatures to grow some of the best grapes and produce some of the best wine in the world?  No, were not talking about Napa Valley - it's all about wine country in our own Placer County, California.

Napa may be a household name when it comes to wine, but Placer County's grape country holds some of the best kept secrets in vino.  Follow the Placer Wine Trail (map included here) on a perfect autumn Sunday to find your favorite red.  Or, there's no better way to spend a chilly winter day than visiting several wineries in our own Gold Country backyard.  Whether they are big, established vineyards with grand tours and sprawling grounds, or small, family-owned shops driven by passion and love of grapes, drink a Cabernet, Merlot, Chardonnay, or Reisling with great food and great friends.  And remember, always have a safe driver on your wine tasting excursions!

Here is a list of some of our favorite vineyards and wineries in Placer County.

Bear River Winery 2751 Combie Road Meadow Vista, CA 95722 530 878-8959 Tastings: Saturday - Sunday 12:00 - 5:00	Bonitata Boutique Wine 291 Auburn Folsom Road Auburn, CA 95603 530 305-0449 Tastings Wednesday - Sunday 1:00 - 6:00
Casque Wines 9280 Horseshoe Bar Road Loomis, CA 95650 916 652-2250 Tastings Friday 11:00 - 8:00 Saturday & Sunday 11:00 - 5:00	Ciotti Cellars 3750 Taylor Road Loomis, CA 95650  916 534-8780 Tastings Wednesday - Sunday 12:00 - 5:00
Cristaldi Vineyards 3750 Taylor Road Loomis, CA 95650 916 759-1291 Tastings Saturday - Sunday 12:00 - 5:00	Davis Dean Cellars Rocklin, CA 95765 530 888-0101 Tastings: By Appointment
Dono Dal Cielo Vineyard & Winery 6100 Wise Road Newcastle, CA 95658 530 888-0101 Tastings Thursday - Sunday, 12:00 - 5:00	Fawnridge Winery 5560 Fawnridge Road Auburn, CA 95602 530 887-9522 Tastings Friday - Sunday, 10:00 - 5:00
Green Family Winery 3420 Pine Ridge Lane Auburn, CA 95603 530 888-8866 Tastings Saturday - Sunday, 12:00- 4:30	Lone Buffalo Vineyards 7505 Wise Road Auburn, CA 95603 916 663-4486 Tastings Friday - Sunday, 12:00 - 5:00
Mt. Vernon Winery 10850 Mt. Vernon Road Auburn, CA 95603 530 823-1111 Tastings Thursday - Sunday, 11:00 - 5 :00	PaZa Vineyard & Winery 3357 Ayres Holmes Road Auburn, CA 95602 916 834-0565 Tastings Saturday - Sunday 12:00 - 5:00
Pescatore Vineyard & Winery 7055 Ridge Road Newcastle, CA 95658 916 663-1422 Tastings Saturday - Sunday 12:00 - 5:00	Popie Wines 3750 Taylor Road Loomis, CA 95650 916 768-7643 Tastings Wednesday - Sunday 12:00 - 5:00
Rancho Roble Vineyards & Winery 340 Fleming Road Lincoln, CA 95648 916 645-2075 Tastings Saturday 12:00 - 4:00	River Rock Ranch Lindemann Winery 6024 Prairie Way Lincoln, CA 95648 916 410-7105 Tastings Saturday - Sunday 12:00 - 5:00
Rock Hill Winery 2970 Delmar Ave Loomis, CA 95650 916 410-7105 Tastings Saturday - Sunday 12:00 - 5:00	Secret Ravine Vineyard & Winery 4390 Gold Trail Way Loomis, CA 95650 916 652-6015 Tastings Saturday - Sunday 12:00 - 5:00
Vina Castellano Winery 4590 Bell Road Auburn, CA 95603 530 889-2855 Tastings Thursday - Sunday, 12:00 - 5:00	Wise Villa Winery 4100 Wise Road Lincoln, CA 95648 916 543-0323 Tastings Thursday - Sunday, 11:00 - 5:00