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Welcome to Palo Alto, home to some of the most expensive real estate in the country. If you're looking for a place to call home, you'll find that prices here are well out of reach for the average person. But don't despair – even in a city as pricey as this one, there are ways to find affordable housing. One option is an accessory dwelling unit (ADU), which is a small housing unit that can be attached to or separate from a primary residence.
Earlier this year, Palo Alto passed new regulations governing ADUs. But now, the California Department of Housing and Community Development has determined that these rules are too restrictive and run afoul of state regulations. As a result, Palo Alto will have to revise its new laws.
The Department's ruling is a setback for the city, which has been working for years to increase the availability of affordable housing. But it's also good news for people who are looking for a way to afford to live in Palo Alto. The revised rules will likely be less restrictive, making it easier to build ADUs.
So if you're thinking about moving to Palo Alto, keep an eye on this space. We'll update you as soon as the new regulations are announced. In the meantime, if you have any questions, please don't hesitate to contact one of our local realtors. They would be happy to help you find your dream home in this amazing city.
Palo Alto is one of just 13 cities or counties in California that have received "review letters" from the state department notifying them that they need to revise their ADU plans. Atherton, Santa Cruz, and Pittsburg are the only other Bay Area municipalities that have received such warnings.
This development is a setback for Palo Alto, which has been working for years to increase the availability of affordable housing. But it's also good news for people who are looking for a way to afford to live in Palo Alto. The revised rules will likely be less restrictive, making it easier to build ADUs.
So if you're thinking about moving to Palo Alto, keep an eye on this space. We'll update you as soon as the new regulations are announced. In the meantime, if you have any questions, please don't hesitate to contact one of our local Palo Alto realtors. They would be happy to help you find your dream home in this amazing city.
Menlo Park City Council unanimously voted on Tuesday to disband the housing plan's Community Engagement and Outreach Committee (CEOC) and enlist a community-based organization to take over the group's work, after several members resigned in frustration due to the limited scope and other dysfunctions of the committee.
City Manager Alex McIntyre explained that with a goal of 100 percent participation in Menlo Park's new housing program, "there was no room for even one member who didn't agree." He said that extending an invitation would have been disingenuous.
"It's time to look at the next step," McIntyre said, calling for new leadership. "We go forward with new life."
Members of CEOC had spent weeks on outreach activities before submitting ideas to the council, but their suggestions were soon thrown out by staff and council members who felt that they didn't align with broader strategies. [...]
When asked what community-based group would be best suited to fill the void, Councilman Ray Mueller responded: "I don't know if there is one right answer." He suggested bringing in several groups to present options during a work session so as not to waste any time.
Councilman Peter Ohtaki agreed that finding an organization would be key. "It's important to establish some credibility," he said.
Councilwoman Catherine Carlton added that working with an organization would be "a new opportunity to get the right people at the table." She suggested starting with Menlo Park-Atherton Education Foundation, which recently met with CEOC members about its joint project with College Preparatory School to host a speaker series on housing issues. [...]
The city has been looking for ways to spread the word about its housing program since it was introduced last year, but efforts have been difficult because of both budgetary constraints and resistance from some community members. [ ... because of...resistance.]
"It's really sad because we want everyone in Menlo Park to understand what is going on so they can participate," Mueller said. [ ... participate.]
"The next outreach effort should be more inclusive," he added, referring to the fact that CEOC was not open to all Menlo Park residents. [ ... Menlo Park residents.]
Councilman Rich Cline agreed with Mueller and called for finding a volunteer group instead of an organization. "People don't want to follow the lead of the city," he said. [...]
Community activist Ilyse Magy suggested working with Atherton, which has taken a different approach by hiring its own consultants and holding regular meetings about its housing element. She noted that most members of CEOC had worked on both elements; it would make sense for them to apply their knowledge in another capacity, such as finding a consultant to work with Menlo Park.
"At this point, we need something more cohesive and less divisive," [...] "It's time to try something different."
When it became clear that council members were committed to working with another organization, Magy asked whether they would be open to bringing CEOC back in the future if it wasn't successful. Carlton responded: "I think I can speak for everyone here that we are willing to revisit this." [ ... willing.]
Councilwoman Kirstin Keith said she wouldn't mind seeing Menlo Park Community Foundation step up as a coordinator between organizations that have been actively involved in housing issues. She noted that the city has an agreement with the foundation to consulting services on environmental impact reports. "We've reached out to them, but not in this matter," she said.
One council member who did not attend Tuesday's meeting was Ray Mueller, whose term will end on Dec. 31. Mueller had urged the council last month to allow CEOC to complete its work and inform residents of what has been accomplished so far. [Mueller urged...]
The city plans to spend approximately $2 million in a competitive bidding process with a community-based organization that would conduct outreach activities going forward. [ ... going forward.] The City Council also wants an organization to provide support for Menlo Park's ongoing effort to update the housing element of its General Plan, which was adopted in 1988 and is due for review by July 2017.
The Palo Alto City Council on Monday night gave initial approval to a new "planned home" zoning designation, despite the lack of interest from developers.
The goal of the proposed legislation was to give residential developers who choose to build housing under this new designation an opportunity to make adjustments related to permitting requirements in exchange for producing new housing. Palo Alto, which is struggling with affordable-housing woes, needs 300 new dwelling units per year just to keep pace with its population growth rate, according to Palo Alto staff reports.
But so far no one has submitted a planned home project application under the current rules because they are too restrictive and don't compensate them enough compared with other zones, said Palo Alto Senior Planner Jonathan Lait. So Palo Alto planners have suggested a number of changes to make Palo Alto's planned home designation more attractive to developers.
If the Palo Alto City Council votes to approve these amendments, it would be giving "final approval" for Palo Alto residents to build up to three homes on a lot under the new zoning designation, according to Lait. In order for Palo Alto residents or their partners to qualify, at least one of them must have been living in Palo Alto for at least six months before applying and not be an employee of another development company that has applied for the special zoning designation in Palo Alto.
Applicants would also still need to abide by current height restrictions and other zoning regulations related to building setbacks and landscaping. After meeting all these requirements, they could then add an additional floor.
A Palo Alto staff report explained that this would add an incentive for developers to build in Palo Alto since low-rise projects are the most common type of development in Palo Alto and "offer the lowest return on investment." According to Palo Alto planners, the planned home designation could be perfect for Palo Alto residents who own a bigger lot and want to add more Palo Alto homes for sale without demolishing their houses.
"The 'planned home' designation can provide benefits beyond what is available through traditional residential zoning," Lait told the Palo Alto Planning and Transportation Commission earlier this month. "And it can help accommodate changing demographics as well as sustainable growth patterns such as those proposed by Plan Bay Area 2040."
But Palo Alto residents have demonstrated a general reluctance to apply for the designation. Palo Alto officials have received just one inquiry from a resident about applying under Palo Alto's "planned home" zoning since it was adopted in 2020, according to a Palo Alto staff report.
The lack of interest has been frustrating for some Palo Alto City Council members, despite recognizing that Palo Alto's height restrictions and other regulations have limited the number of developers who would consider converting their properties into rental housing or adding more units.
"It seems as though we haven't been able to develop any momentum with this program," said Councilman Eric Filseth during Monday night's council meeting. He suggested amending the ordinance so that each council member could designate up to 1 percent.
Even in today’s sellers’ market, there are still ways for buyers to win big.
Build a team of trusted professionals and make strategic plays as you budget and pick your desired neighborhoods. Then, be ready for the competition by getting a pre-approval letter and leaning on your expert advisors to draft a winning offer.
In a sellers’ market, you can still be the champion if you have the right team and strategy. Let’s connect today to make your game-winning play. Looking to buy a house in Menlo Park Ca or buy a house in Atherton. Please give us a call.
One key question that’s top of mind for homebuyers in Silicon Valley this year is: why is it so hard to find a house to buy? The truth is, we’re in the ultimate sellers’ market, so real estate is ultra-competitive for buyers right now. The number of buyers searching for a home greatly outweighs how many homes are available for sale.
While low inventory in the housing market isn’t new, it’s a challenge that continues to grow over time. Here’s a look at two reasons why today’s housing supply is low and what that means for you.
The graph below shows new home construction for single-family homes over the past five decades, including the long-term average for housing units completed. Builders exceeded that average during the housing bubble (shown in red on the graph). The result was an oversupply of homes on the market, so home values declined. That was one of the factors that led to the housing crash back in 2008.
Since then, the level of new home construction has fallen off. For the last 13 straight years, builders haven’t been able to construct enough homes to meet the historical average (as illustrated in green on the graph). That underbuilding left us with a multi-year inventory deficit going into the pandemic.
Then, when the pandemic hit, it fueled a renewed appreciation and focus on the meaning of home. Having a safe space to live, work, school, and exercise became even more important for Americans throughout the country. So, as mortgage rates dropped to at or below 3%, buyers eagerly entered the market looking to capitalize on those low rates to secure a home that would fulfill their changing needs. At the same time, sellers hesitated to put their houses on the market as concerns about the pandemic mounted.
The result? The number of homes available for sale dropped even further. A recent article from realtor.com explains:
“Last month, the number of home listings dropped 26.8% compared with the same time a year earlier. This meant there were about 177,000 fewer homes listed in what’s already typically a slower month due to the holidays and colder weather. . . .”
For a buyer, low inventory can be a challenge. You want to find the home of your dreams, and you don’t want to settle. But what if there just aren’t that many homes to choose from?
There is some good news. Experts are projecting more homes will soon become available thanks to sellers re-entering the market. Danielle Hale, Chief Economist at realtor.com, shares this hope, but offers perspective:
“We expect that we’ll start to see a turnaround and inventory will stabilize and start to go up a little bit in 2022. . . . But that means we’re looking at inventory levels of roughly half of what we saw before the pandemic. For buyers, the market is likely to continue to move fast. If you see a home you like, you want to jump on it right away.”
Basically, inventory is still low, even though more homes are coming. But you shouldn’t put your plans on hold because you’re waiting for those additional houses to hit the market. Instead, stick with your search and persevere through today’s low inventory. You can find your next home if you’re patient and focused.
Remember your goals and why finding a home is so important. Those things should be the driving force behind your search. Share them with your agent and be clear about your priorities. Your trusted advisor is your greatest support as you navigate today’s low housing supply to find the home of your dreams.
If you’re planning to buy this year, the key to success will be patience given today’s low inventory. Let’s connect to discuss what’s happening in our area, what homes are available, and why it’s still worthwhile to prioritize your home search today.
If you’re looking to buy a home, you may want to put these items on your to-do list to ensure you hit your goals.
It’s important to start working on your credit and saving for a down payment early. When you’re ready to begin your search, work with a real estate professional and get pre-approved so you know how much you can borrow.
Connect with a real estate advisor so you have the guidance you need to achieve your homebuying goals this year.
To succeed as a buyer in today’s market, it’s important to understand which market trends will have the greatest impact on your home search. Danielle Hale, Chief Economist at realtor.com, says there are two factors every buyer should keep their eyes on:
“Going forward, the conditions buyers face are primarily dependent on two things: mortgage rates and housing supply.”
Here’s a look at each one.
As a buyer, your interest rate directly impacts how much you’ll pay on your monthly mortgage when you purchase a home. Rates are beginning to rise, and experts forecast they’ll continue going up in 2022 (see graph below):
As the graph shows, mortgage rates are expected to climb next year. But they’re still low when you compare to where they were just a few years ago. That presents today’s buyers with some motivation to lock in a low mortgage rate before they climb higher.
The other market condition buyers need to monitor is the number of homes available for sale today. The latest Existing Home Sales Report from the National Association of Realtors (NAR) shows the current supply of inventory sits at just 2.4-months. To put that into perspective, a 6-month supply is ideal for a balanced market where there are enough homes to meet buyer demand.
However, there may be good news for buyers who are waiting for more options. A recent realtor.com survey shows more sellers are planning to list their homes this winter, meaning more choices will likely be available soon.
Even if your options improve some this season, it won’t significantly shift market conditions overnight. According to NAR, many more listings need to be available to move closer to a more neutral market:
“Given the average monthly demand . . . , 3.55 million homes should be on the market to meet a level of inventory equal to six months of demand, implying a shortage of homes for sale of 2.24 million.”
So remember, even with more homes expected to come to market this season, competition among buyers will remain fierce as there still won’t be enough homes for sale to meet the current demand. That means you’ll need to act quickly when you’re ready to make an offer.
If you’re planning on buying a home this winter, more options are welcome news, but it doesn’t mean you should slow down. Let’s connect today so you have an expert on your side to help act as quickly as possible when the right home for you hits the market.
The game of chess can provide incredible lessons to apply to all aspects of life, including the homebuying process. Chess requires you to plan and think about your strategy from the very beginning of the game.
The homebuying process, like chess, requires strategy and planning. Here are a few things to keep in mind to ensure your plan is as strong as possible when you begin your home search.
It’s important to have a great opening play when you’re buying a home. And the best move you can make when you begin your home search is getting pre-approved by a lender. You’ve probably already heard this is an important step, but what exactly is pre-approval and what benefits does it provide you?
“The pre-approval letter from your lender tells you the maximum amount you are qualified to borrow. Getting a pre-approval letter is not a loan guarantee, it simply states how much your lender is willing to lend you. . . .”
And while determining how much you can afford at the start of your search is critical, the pre-approval letter also serves another important purpose. Freddie Mac also notes:
“This pre-approval allows you to look for a home with greater confidence and demonstrates to the seller that you are a serious buyer.”
In the game of chess, a strong opening move signals to your opponent that you’re a serious competitor. As a homebuyer, your pre-approval letter signals to the seller that you’re a serious, interested buyer.
Every step you take to create your strategy as a buyer is important in today’s market. Why? Mortgage rates are still low, but increasing. Prices are going up. There’s a limited supply of homes for sale. These are just a few key variables in today’s market you need to be prepared for.
That means leaning on expert guidance as you plan every move is more important than ever. Have a team of professionals – like your trusted real estate agent and a loan officer – every step of the way to make sure you make the right moves.
Getting a pre-approval letter isn’t just good strategy, it can be game-changing. It allows you to get a full understanding of what you can afford, and it signals to sellers that you’re serious. Let’s connect today to ensure you’re playing chess and being strategic during the home buying process.