This month, let’s check in on a few trends that are impacting the real estate market.
CAN I BUY AND SELL YOUR HOUSE?
If you are looking through home listings in an effort to buy a home, or perhaps to find an agent to help you sell your home, you have probably noticed quite a few changes in recent years. Some longstanding companies have gone away, closed or merged with larger firms. You might have noticed that Zephyr is now part of Corcoran Global Living, or that Compass has successfully grown into a huge market presence in the Bay Area. Your favorite agent might now be with another company, or might have struck out on his or her own.
Meanwhile, there have been some new entrants into the market, signaling a change not just in the competitive Realtor-on-Realtor business but in the inventory of available housing on the market.
In a recent political roundtable I moderate at The Commonwealth Club, investigative reporter Molly E. McCluskey noted a significant development. “Platforms like Zillow and Trulia and other platforms that used to be brokers, facilitators, are now buying houses directly from people who want to sell their houses. Once they start to control housing stock, once they start to be able to take things off the market and release them to the market at the prices that benefit them, that is incredibly concerning.”
This began in 2018 when Zillow launched an effort to buy homes, make necessary fixes, and resell the houses. According to a CNN report in late February, “So far, the company is losing millions every month on the new initiative. But [Zillow CEO Rich] Barton believes the big bet will pay off.”
Time will tell if Zillow will succeed at being your virtual MLS, agent, buyer, rehabber, and seller. But deep pockets can ensure they give it a good try.
I recently interviewed a candidate for a state legislative seat. Doesn’t matter which one; that’s not terribly important for the point I’m making. But I noticed a disconnect from reality that is worth sharing.
The candidate was clearly smart, young, and quite progressive. When we discussed housing matters, she said she supported a significantly large state investment in affordable housing. O.K., plenty of people can get behind that.
But, I asked, if you don’t address local resistance to new housing — especially affordable housing — what good does it do to have a large planned expenditure? You can put $44 trillion a year in your budget exclusively for new affordable housing, but if locals refuse to let you build it, then all you have is a campaign promise that makes you look like you care about a problem when in fact you’re not really doing anything to fix it.
I thought of that a little while later at that political roundtable I mentioned above. One of my panelists was Carson Bruno, a young academic who has focused on the state’s housing crisis for years.
He said everyone in Sacramento is talking about solving the housing crisis, but no one is willing to do the dramatic policy changes needed to make that happen, “which is actually taking more power away from localities. Let’s just put it out there. Local control has caused this problem.”
I assured him that our security staff was available to escort him from the venue.
Of note to those people who love to hate SB 50, the struggling legislation that aims to increase housing density and speed up housing production, is Bruno’s additional comment that in his opinion, SB 50 has been watered down and compromised so much that he doesn’t think it would actually do much of anything even if it somehow manages to survive the gauntlet of NIMBY legislators, pressure groups, and a governor he says is more interested with press releases than in exercising his political power to address housing.
So once again, everybody loses.
“This state does not have a future economically if people can’t afford to purchase houses here of any sort — a one-bedroom condo to a single-family home. This state does not have an economic future if people cannot afford to rent here. And we’re on a current path that puts us in that position. We currently are [there] in many parts — places like San Francisco, Los Angeles where I reside, and other parts of the state. And every single year, more and moreso as we creep inland, it becomes less affordable as well. Dramatic action has to take place.”
— Carson Bruno, policy analyst