Enough is enough: Tenants join landlord in Bay Area exodus

SAN JOSE – Tony Hicks moved to San Jose in 1981, but he’s had enough.

Hicks told his 11 tenants he would soon place the three homes he owns on the market. He expected disappointment. Instead, most wanted to move with him to Colorado.

“It didn’t take them long,” Hicks said. “I was surprised.”

Rising prices, high taxes and his suspicion that the next big earthquake is just a few tremors away convinced the retired engineer to put his South San Jose properties up for sale.

The groundswell to leave Silicon Valley — the place of fortunes, world-changing tech and $2,500 a-month-garage apartments — has been building. For at least the last nine months, the San Francisco metro area has led the nation in the number of residents moving out, according to a survey by online brokerage Redfin.

San Jose real estate agent Sandy Jamison has seen many long-time residents and natives leave the state recently. The lack of available housing, leading to some of the priciest real estate in the country, is driving many from the region, she said.

Jamison has even drawn up a marketing flyer for the top five reasons people leave the Bay Area: high taxes, cost of living, quality of life from traffic to homelessness, politics and high housing prices. For many long-time residents, she said, “they feel like they don’t belong here any more.”

Hicks and his friends share the sentiment.

“I’ve been thinking about this for a long time,” said Dan Harvey, 60, a retiree in one of Hicks’ rentals who is concerned about the traffic he fights on his Harley Davidson and the high cost of living. “A fresh start.”

The landlord and tenants came together through Hick’s rental ads on Craigslist and in the newspaper over the last two decades. They grew close with common bonds of conservative politics, religious faith and motorcycles.

It’s an unlikely collection of 10 men and one woman — a retired engineer, a few military veterans, blue collar workers and others on fixed incomes. Few say they could afford to go it alone in the sky-high housing market in San Jose, where a typical two bedroom rents for about $2,500 a month, far more than what they pay Hicks.

Most of the men are divorced, widowed or never married, and many suffer from health ailments and a crankiness exacerbated by Bay Area traffic, crowding and the state’s liberal policies on crime and immigration.

Hicks, 58, was an engineer and marketing executive at IBM, Xerox and other companies before retiring in his early 40s to raise his daughter from his first marriage.

He bought a few investment properties in South San Jose, and looked for long-term returns when he sold them. He kept rents low — between $500 to $1,200 a month for one bedroom — and never raised prices once a tenant signed a lease.

Many of his tenants have been with him for more than a decade.

“We became brothers,” said Mike Leyva. The 64-year-old Army veteran and retiree signed a lease in 2004 and never left.

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Mike Leyva, 64, rents a room from Tony Hicks. Leyva is one of several tenants planning to move to Colorado with Hicks. (Dai Sugano/Bay Area News Group) 

In recent years, Hicks began to believe there was a better life outside the valley.

Vaulting real estate prices added incentive. He kept up on tax laws that could maximize the returns on his property. Selling his San Jose rental houses and buying new properties with the proceeds would allow him to defer taxes. “It’s a great financial move,” he said.

Hicks was also moved by discussions with his pastor and sermons at his church, the Vietnamese Living Word Community Church, about Biblical journeys.  His spiritual beliefs guided him to his decision to move with his new wife, Fidessa, 31, and her 8-year-old daughter.  

Cautiously, he broke the news to his friends.

“I was totally shocked,” Leyva said. “I thought he was joking me. I had a lot of questions about it.”

Levya spent two days researching the move and became convinced. He expects to slash his rent from $1,200 to about $800 a month, with more room in a newer home bought by Hicks. “I’m excited,” Leyva said. “It’s going to be a new journey in my life.”

Ed Blomgren, 70, pays $495 a month for one bedroom and a shared bathroom. The retired machinist, a Navy veteran, lives on a fixed income and couldn’t afford market-rate rent.

Blomgren grew up in Colorado, and he welcomes a chance to return to his home state, where he still has family. “At my age,” he said, “I think it might be a good thing.”

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Portrait: Edwin Blomgren, 70, rents a room from Tony Hicks. Blomgren is one of several tenants planning to move to Colorado with Hicks. (Dai Sugano/Bay Area News Group) 

Hicks planned to stagger the sales of his properties over several months, to make the move easier. He went to Colorado Springs with his wife, Leyva and Harvey in December to scout properties.

He expects to get a lot more for his money. The median home value in Colorado Springs is $263,000, compared to $1 million for a single family home in San Jose, according to real estate website Zillow.

Hicks came to Jamison with a proposal: sell all three homes, so he could buy a half-dozen newer, bigger and cheaper homes in the small mountain town, home to the U.S. Air Force Academy.

Within a day of listing his Raposa Court home, Hicks had two offers in hand above the $998,000 asking price.

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Pictured is Tony Hicks’ family home in San Jose that he recently agreed to sell for $1.2 million. (Dai Sugano/Bay Area News Group) 

After an open house, Hicks agreed to a $1.25 million cash offer. Another interested buyer agreed to purchase one of Hick’s rentals for $900,000, even though Hicks didn’t list it.

In the next two months, several tenant friends will fill up moving containers with their personal possessions and several motorcycles. Hicks expects at least six tenants and another Bay Area friend to eventually make the move. He will bring his family to Colorado this summer.

Hicks and his wife plan to buy or build a large home for about half the cost of what they sold their San Jose house. He expects to buy another six homes in good neighborhoods.

Silicon Valley will be in the rear view mirror, he said. “I even bought cemetery plots,” Hicks said. “But I’m selling them.”

Article source: https://www.mercurynews.com/2018/02/23/enough-is-enough-tenants-join-landlord-in-bay-area-exodus/

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Portland is Now the Fourth-Most Popular Destination For People Fleeing Silicon Valley

About Elise Herron

Elise Herron grew up in Sisters, Oregon. She spent time in New Zealand and Central America before settling in Portland to finish out a degree in Journalism.

Article source: http://www.wweek.com/news/2018/02/22/portland-is-now-the-fourth-most-popular-destination-for-people-fleeing-silicon-valley/

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San Francisco’s housing market is so dire, people need to make over $300000 a year to afford the typical home

Melia Robinson/Business Insider

  • The household income required to buy a typical home in San Francisco is now $303,000, according to a report from Paragon Real Estate.
  • Only 12% of households in the city can afford the median-priced home.
  • The high cost of living is making it harder for tech companies and non-profit organizations to recruit and retain employees in San Francisco.

Being part of San Francisco’s middle class doesn’t mean you can afford middle-class living.

A new report from Paragon Real Estate reveals that the household income now required to buy a median-priced home in San Francisco reached an all-time-high of $303,000 in December.

That means a person who wants to buy property in the city needs a mid-six-figure salary in order to afford the 20% down payment on a $1.5 million home — the median sale price of a single-family home in San Francisco last quarter.

According to Paragon Real Estate, only 12% of households in San Francisco can afford it.

Patrick Carlisle, the chief market analyst at Paragon who worked on the report, has said low housing affordability is the greatest economic and social issue issue facing the Bay Area.

San Francisco, one of the epicenters of the tech industry, does not have enough dwellings to house all of its workers. Tech companies frequently locate their campuses in areas without much nearby housing, and tech workers often use their high salaries and stock options to bid up home prices.

Even tech workers can’t afford to live in the Bay Area

The report was unsurprising but still unsettling for Bay Area residents.

Katherine Maher, executive director of the Wikimedia Foundation, wrote on Twitter, “As a non-profit employer, I cannot see how we reconcile this with a future for our organization in San Francisco.”

The non-profit was founded in St. Petersburg, Florida, and moved to San Francisco in 2008. Maher said that fewer than two-thirds of Wikimedia Foundation’s staff work out of the city office. The organization has embraced remote work and seen “tremendous benefits.”

Maher said the findings of the Paragon Real Estate report are “nonsensical” to the group’s staff and donors, and the high cost of living hurts their ability to recruit and retain employees.

“Our local employees, particularly the younger ones, struggle to make ends meet. They leave when they start families. How can we be an equitable employer when only those who can afford to work for us, do?” Maher said on Twitter.

Mike Rosenberg, a reporter with the Seattle Times who previously worked at the San Jose Mercury News, responded to the report with some free advice for millennial homebuyers.

“You’d need to avoid eating 33,600 avocado toasts a year to generate $303,000,” he said.

Article source: http://www.businessinsider.com/income-required-to-afford-a-home-in-san-francisco-2018-2

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High or low end, Bay Area home values continue to climb

In most parts of the country, inexpensive starter homes are making the greatest gains in value for buyers.

But once again, the Bay Area is running counter to national housing trends.

Owners in the San Jose metro area buying into the lower third of the market saw an 18 percent return last year, while high-end buyers saw a slightly higher 18.9 percent appreciation, according to real estate marketplace Zillow.

In the San Francisco metro area, which includes Alameda County, starter homes appreciated 9.5 percent over one year while luxury homes went up 11.6 percent.

Aaron Terrazas, Zillow senior economist, noted that Seattle is the only other metro area where high-end properties offered greater returns than low-end properties. Nationally, starter homes appreciated 8.5 percent last year, while homes in the top tier gained 3.6 percent in value, Zillow estimated.

The fast-rising home values across the San Jose market, he said, can be attributed to the relative affluence of the region’s buyers. “The bottom tier in San Jose is so high.”

The real estate website estimates entry-level homes in the San Jose metro area, which includes Santa Clara County, have a median value of around $750,000 — higher than the top-tier in all but five metro areas, Terrazas said.

The median sale price for a single family home in the nine county region was $765,000 in December, according to real estate data firm CoreLogic. A typical single family home in Santa Clara County went for $1.17 million, a boost of 35 percent from the previous December.

The median home value in Alameda County was $800,000, an increase of nearly 17 percent year-to-year, according to CoreLogic.

The robust annual gains in home valuations have vaulted far beyond normal returns for homeowners and investors. Historically, San Jose homes have seen values grow between 7 percent and 8 percent per year, according to Zillow statistics.

During the last five years, values for San Jose homes at both ends of the market have nearly doubled. Starter homes values have been driven up 88 percent, while luxury homes, with a median value of $2.1 million, have appreciated 74 percent.

William Doerlich, an agent with Realty One Group in San Ramon, said Bay Area luxury homes priced at more than $3 million can take as much as two months to be sold — typically because owners are willing to wait to get their price.

Sales for low- and middle-range homes have been “off the charts,” he said. He cited one client trying to purchase a condominium in Emeryville and competing with 22 other offers.

Values for entry-level homes were the hardest hit real estate segment during the 2008 housing mortgage crisis and recession, Terrazas said. The recent gains in that part of the market were recouping some of the value lost a decade ago, he said. The segment has seen the highest demand and it’s out-pacing supply, he said.

The median price for a bottom tier home in the U.S. last year was $120,000, while a top-tier home went for $363,000, according to Zillow. Entry level home prices made the biggest gains last year in Tampa, Fla., and Las Vegas, each increasing by about 20 percent in the past year.

The Bay Area recovered from the real estate crash and recession faster than other parts of the country, Doerlich said. “We caught up three or four years ago,” he said.

Article source: https://www.mercurynews.com/2018/02/20/high-or-low-end-bay-area-home-values-continue-to-climb/

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Team Howe Earns Zephyr Real Estate’s Top Producing Team Award

Article source: https://globenewswire.com/news-release/2018/02/20/1362149/0/en/Team-Howe-Earns-Zephyr-Real-Estate-s-Top-Producing-Team-Award.html

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