August 6, 2021
Market Update + Prediction
Welcome back for another edition of the Artemis Real Estate newsletter! The fog seems to be particularly unrelenting this year, so we hope this message finds you swaying in a hammock somewhere warm and breezy.
The market has somewhat synced back up with its normal seasonality - that is - a robust spring/autumn and quieter summer/winter. This summer we’ve noticed a dip in activity but not as much as previous summers, due to a legendary surge in demand that is far from being satisfied. Buyers that stick around this summer will be rewarded with slightly less competition than during the spring months, but that’s not to say it’s easy-going out there. Well-priced, desirable homes are still hot commodities despite seasonality, and multiple bids are the norm.
A few days ago we wrote an offer for a buyer client at 265 Henry in San Francisco’s Corona Heights. Listed at $2,795,000, the home was renovated within the past decade and really resonated with eligible buyers, including our client. The property received over 10 offers and just closed for $3,700,000! Another buyer client of ours, an out-of-state couple who found us online, just purchased 219 Poplar in Kentfield, a lovely home we found for them using our off-market connections.
As for the team, all of us remain very busy and are taking minimal time off this summer. The market is too active for extended trips, so the team at Artemis is finding ways to squeeze in shorter, but much-needed breaks. We hope you find some time for yourself this summer as well!
Monthly Prediction: HOAs Under the Microscope
This is where we'll attempt to make a prediction about the future based on all the inputs we receive each month - whether it be boots-on-the-ground experience, roundtable discussions we're participating in, or the countless articles, podcasts, industry reports, and other media consumed. Read at your own risk!
The condominium tower collapse in Surfside, Florida is absolutely tragic and anyone who works in real estate, engineering, architecture, inspections, or construction has been captivated with this developing story— due to how closely we all feel to it. Reviewing the documents, meeting minutes, inspection reports, and recommendations sends chills up the spine. Working in real estate, we can almost hear the HOA meetings in our heads - the disagreements, the lack of leadership, and the bandaid approach to gaping wounds. It’s a depressing series of events that lead to loss of life and property. And that brings us to this month’s prediction: assessing the health of a building and the HOA that manages it may never be the same.
Because of what transpired at the Champlain Towers, we predict the following:
1. Inspection reports will be more stringent. Look for inspectors to take this as a lesson to tighten up their language, point out more flaws, and make more recommendations. This will likely occur across all building types and locations.
2. HOAs will take a good look at themselves. Look for HOAs, especially in buildings with a significant number of units, to use this opportunity to audit their processes, perform more detailed reserve studies, and (hopefully) act sooner rather than later on key maintenance items. We predict more HOA assessments across the board in the coming months and years. HOA dues could also spike in the wake of this tragedy.
3. Municipalities will change their rules/requirements for large buildings. We’re not yet sure how the rules change, or what they will be, we just predict that the cadence of inspections will be more frequent and more to-do items will be handed out to property owners and their respective HOAs.
4. Buyers will never look at HOAs the same again. When buying into a condominium community, informed buyers will take an even harder look at HOA meeting minutes, reserve studies, and assess the health of an HOA before proceeding forward with a purchase. If an HOA gives off an odor of incompetence, irresponsibility, or is underfunded, look for buyers to pass and the overall values of particular buildings to decline. The gap between well-run and not-so-well-run buildings will widen.
5. Lenders and insurance companies could also generate new requirements. Again, we’re not sure what these will be, but our antennae is out for upcoming changes.
6. Single-family homes will become even more desirable. Yep, another shot in the arm for single-family homes…
Sorry for the depressing prediction this month, but this story is quite simply too big to ignore in the world of real estate. We’re continuing to track it closely, so stay tuned to our newsletter for future updates should this event send any type of ripples through our market over 3,000 miles away.
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