Tustin Litigation & Appeals Law Blog

Homeowners in California may be making critical mistakes as it relates to valuing their properties. For instance, some might rely on an algorithm to determine how much their homes are worth. This can be problematic because algorithms may not reflect changes in market conditions or other variables that can drastically alter a home's true market value. As a general rule, real estate websites should be used to track trends in a given area.

Even if an appraiser estimates a home's value, that is still just an estimate based on prior sales and other information. It's just a subjective assessment that can't be proven accurate unless the home is actually on the market. Homeowners may want to scrap the renovations that are planned for just before the home sells. This is because it might not yield a worthy return on investment or a positive return at all.

As developers anticipate the next big trends in California real estate, they may look next to the youth of Generation Z. This generation that follows the Millennials consists of people born in 1996 or later. While many members of Gen Z are too young to purchase commercial real estate, the oldest individuals are graduating from university, entering the workforce and developing their own property and investment portfolios. By paying attention to youth trends as well as timeless needs for real estate developments, investors and designers can create projects that will retain their appeal and utility for many years to come.

Trends in housing point at this direction. Multifamily apartment or condo buildings are opting for more technical integration, including connected buildings, "smart home" services and the most advanced wiring for speedy service. In addition, many young people are interested in earth-friendly construction, so sustainable materials and certifications of eco-friendly developments not only can add to their current appeal, but to the long-term viability of the projects. Young people are also interested in mixed-use developments that allow people to live a walkable, urban lifestyle even in a suburban location.

As homes in California and throughout the country continue to get more expensive, even midsize cities are starting to become too pricey for buyers. In Nashville, the median home price has increased to $263,000 and saw several years of double-digit price increases. That played a role in net migration falling to 18,700 in 2017. Kansas City has also seen home values increase significantly. In 2017, prices went up 10.3 percent. However, sales dropped 10 percent in that same year.

While Kansas City is experiencing a shortage in available homes, smaller markets tend to have a better balance of supply and demand. Locations like Winston-Salem and Boise have seen home prices rise by 6.4 percent in the last year. Despite this growth, the median home prices in such areas is $246,000, which is below the national median of $264,000.

California residents who enter into commercial real estate deals should understand that they have different terms compared to residential transactions. For instance, individuals may see a term called usable square footage (USF). The USF number lets them know how much space they can use to meet clients or produce goods. Examples of unusable space include hallways or exits.

This figure is separate from the rentable square footage in a building. It includes everything from an office space within the building to any bathrooms or lobbies that it may have. Typically, the total square footage of a given commercial space is what is used to determine the rent. In some cases, a tenant will be given the right of first refusal to take on any additional space that may become available within a building.