Real Estate Round-Up: X is for X-it
Last updated 9/23/2021 at 5:26pm
Never in our 25 years selling real estate have we experienced more homeowners who are selling and leaving California. Easily 8 out of every 10 of the sellers we work with are leaving California to find more affordable housing, lower taxes, and a different political culture.
Retirees are leaving California. They want to stretch their retirement funds out as far as possible, so giving up great weather in exchange for a lower cost of living and lower taxes, are worth the move. Middle-class families are leaving California to find housing, employment, and education that would provide the lifestyle that California once offered.
This migration is not unique to Fallbrook. Between 2010 and 2020, California experienced an outbound migration to other states, of 6.1 million people. A study by UC Berkeley's Institute of Governmental Studies found that the key reasons for leaving were the cost of housing at 71%, the high taxes at 58%, and the political culture at 46%.
The top 10 states that Californians are moving to are Texas, Arizona, Nevada, Washington, Oregon, Colorado, Florida, New York, North Carolina, and Utah. Of those states, four have no personal income tax. They are Texas, Nevada, Washington, and Florida. All the others have lower state income tax rates than California, which is easy to achieve, since California has the highest state income tax at 13.3%, one of the highest sales tax, and one of the highest gas tax.
If you’re thinking about leaving California, you’re not alone. More than half of California registered voters polled and reported, in the UC Berkeley report, that they have considered moving out of state. If you move you will most likely end up meeting other former California residents, which may make you feel right at home. I recall when I moved to California, in 1978, when residents from other states were flocking to California, how often I ran into another former Ohioan. Now, it’s just happening in reverse.
So, how do you prepare for your X-it?
If you are considering leaving California, meet immediately with an experienced, local Realtor. They will bring you up to speed on the current market conditions. That includes not only the price that homes are selling for and the time you can expect it to take, but also what trends they’re seeing in buyers’ preferences.
Over the past two years, buyers have been prepared to pay remarkably high prices for homes, but they expect them to be perfect. That means new flooring, updated color schemes, modern cabinetry, updated kitchens with the best appliances you can acquire, updated bathrooms with tiled showers, fashionable sinks, and statement hardware.
We offer, as a service to our clients, contractors who can provide all the above services. We oversee the process, so the activities take place in the correct order, and proceed from start to finish without gaps waiting while the contractor jumps to another job. Because our team of contractors work only on our clients’ projects, you don’t have to worry about if they are going to show up or not.
The day the contractors start your project, is the day they work for you until the job is complete. The other benefit to you is the cost of these improvements is well below market cost. We have collaborated with our main contractor for over 20 years, with the others being part of our team for over 10 years. We know their work ethic and we know their pricing schedule. Our past clients have experienced a minimum of a 4 to 1 return on their investment, which makes any updating easy to stomach.
When we realized the trend in what the buyers’ want in a home, we introduced this improvement concept to our sellers. They have all experienced incredible financial rewards for buying into the plan and being patient while the improvements are being completed.
We had a client with an opening price point home that invested $12,000 into their home and earned $60,000 more than the home would have sold for without the improvements. We had another client invest $40,000 into a home they had as a rental for the past 10 years, who earned $200,000 over the appraisal they had on the property right before we listed it. One current seller we are working with is projecting to spend $35,000, in anticipation of receiving an additional $170,000 for the home once the improvements are complete.
Your X-it strategy should not just be “we want to move,” unless you’re willing to accept much less for your home. If you want to leave California with maximum equity in your bank account, you need a well-thought-out, extremely coordinated, strategy. We can help you, just like we help all our clients. The best adios is one with a lot of OOOOOs.
Kim Murphy can be reached at [email protected] or 760-415-9292 or at 130 N Main Avenue, in Fallbrook. Her broker license is #01229921, and she is on the board of directors for the California Association of Realtors.