Multi Generational Households are on the Rise

The weekend birthday circuit. Need I say any more?

Once school starts, it’s only a matter of time before the invitations start coming home crumpled and wet at the bottom of their backpacks. 

Open House or Birthday Party???

There are a lot of tough choices for Angel and me when it comes to the weekend schedule. Who does the Open House and who takes the kids to the Birthday Party?  

Often we settle the matter with a good old-fashioned, reliable and very mature round of Ro-Sham-Bo.  (For the record, it’s always 2 out of 3 to win.)

As I’m enjoying the company of 3 other families at this last party, the conversation turns towards housing.  It’s a very common, and often heated, topic here in Santa Cruz.  Family A, B, & C all are 2-parent working households, with the average of 2.3 kids. All parents are gainfully employed.

The Families

Family A’s current situation is shared rental housing with a grandparent. Parents wouldn’t otherwise be able to afford to live in this house without grandma’s financial contribution. Likewise, grandma wouldn’t be able to afford any rental or housing situation on her own. Rents and housing prices have just skyrocketed!

Family B owns their home. They were able to buy a starter home back in 2009, pre-kids, at the bottom of the market, and with a generous 20% down payment gift from their parents.  Family B has outgrown their home and wants to up-size but can’t make the numbers work without a significant contribution from their extended family again.

Family C's income doesn't keep
up with their $3000/month
rent payment

Family C is in a rental. 3 bedrooms, 2 bathrooms, clean, safe neighborhood, nothing fancy.  Sometimes they struggle making the $3000 rent payment a month and have to ask for assistance from a set of parents to get them through the tougher months. 

The Question

I would be lying if I said these types of conversations or family circumstances were a first-time occurrence.  In fact, the housing affordability topic frequently comes up.  I hear about all kinds of living situations, family compounds, assistance, generous down payment gifts, properties being willed to grandkids.  I’ve heard it all. 

Through the course of these conversations, I usually offer some contribution to the discussion, pick a few brain’s, throw in a couple ideas, and then inevitably follow everyone else into the yard for cake and piñata.  There is no real concrete solution to offer.

What are people going to do to stay here in Santa Cruz?

The Numbers

755 14th Ave, Santa Cruz
Swan Lake Gardens
Measure J County Affordable Housing

If you look at the raw data, the median household income in Santa Cruz County is $67,000 (I’m rounding up.)  Based on that income, one might be able to qualify for a $300,000 loan.  That’s assuming great credit and no debt. Yet, the median value of owner-occupied housing is $557,500.  That’s a $250,000+ discrepancy.  Even if the family saved 25% of their income, it would take them 15+ years to save enough to bridge the gap between wages and housing values. 

Again, I come back to the same question. 

What are people going to do to stay here in Santa Cruz?

--and--

HOW are they going to do it?

So… How are they going to do it?

Upwards of 16% of the population are already living in multi-generational households.

One third of adult children expect to share a household at some point. Why? The 65+ population is expected to double.  Long term care costs continue to rise. Millennials are entering a shrinking workforce with increasing college debt. To name a few.

It's very common in other countries for grandparents to
live with their grown children and family.

Multi-Generational Households aren’t coming, they’ve already arrived.  

Listen at the next birthday party.  Ask about people’s current living set ups. Talk with me. I’ll tell you how homes with a "granny unit" are selling for a premium.  Duplexes are being snapped up before the first open house. Family compounds are IN! Buyers want to know where they can put in a guest unit or divide a large home into two separate living spaces. 

If you own a multi-unit property or family compound that you’ve outgrown, now is the time to consider selling. If you’re considering a multi-generational purchase, see me so we can come up with a serious strategy.  Housing costs are not going to go down. It’s time to talk about how to secure your future here in Santa Cruz. 

Aimee Thayer-Garcia is a Real Estate Broker Associate at Bailey Properties. She is Top-Producing Agent and practices Real Estate full time with her husband, Angel Garcia. Mom of 3.  831-435-9146. ATGarcia@BaileyProperties.com

This is what $10,000,000 looks like in Santa Cruz

4660 Opal Cliff Drive, Offered for $10,690,000

It's been 4 months since Santa Cruz County has had a $10,000,000+ listing on the open market and nearly 9 months since the last closed sale.  When this uber-luxury listing popped up for sale on Opal Cliff Drive, I was excited.  Finally.... maybe Santa Cruz will finally breech it's glass ceiling.

I was really, really, really (to the 10 millionth "really") ready to be inspired, awed, and rendered speechless.

For the younger generations,
this is the adult
equivalent of MTV's "Cribs."

I had grandiose visions of previewing this property and transporting myself into my own real-life episode of "Lifestyles of the Rich and Famous."  For those of you that don't know, this was a TV series hosted by, none other than, Robin Leach in the 80s and early 90s.  One of my favorite shows to watch, I might add.










So what does $10,000,000 get you in Santa Cruz?

Strictly speaking numbers, it will buy a 4100+ square foot, 1939 home with 5 bedrooms, 5 bathrooms, a 3 car garage and bonus room on 1.23 acres spread over 3 parcels.  So the value must be in the amenities and the view, the estate setting, right?

1 Thayer Rd sold for $13,700,000 in December 2014

In the last 5 years, Santa Cruz County has had only ONE sale (on the open MLS) above the $10,000,000 mark. That property was located in Bonny Doon and sold for $13,700,000 in December 2014. It was a 5000+ square foot ranch on 147 acres with a caretaker's cottage, guest cottage, and all of the modern amenities a luxury buyer could want. Multiple barns, a wood shop, surfboard storage, crystal clear pool, views to the Ocean, and a fully restored and updated main residence.







Back to Opal Cliff Drive-
The view was amazing. There's nothing like opening up the sliding door and smelling salt-rich air from the Pacific Ocean. An acre of ocean front property is also unheard of in Santa Cruz. It really is a once in the lifetime opportunity to gobble up a limited piece of prime coastal front property.  The reality is we can always build more homes, but it's not like we can "make" more coastline.







But here's where I feel a professional obligation to set the record straight.  If you're looking for all of the bells and whistles, keep looking.  You won't find a 3-car garage with pristine epoxy coating, so clean you can eat your dinner off the garage floor. The garage looked barely worthy of hosting a Tesla. There's no infinity pool with waterfall spa or a high-tech home-system hub that is so futuristic it requires you to download an app for the app.  The most updated section of the home was probably a mother-in-law wing with it's own kitchenette, fireplace, and sitting room.  Hardwood floors, sure.  Crown moulding, yup.  But overall, there  was no consistency with the updates. A long, inviting and modern hallway would lead to a 1950s wallpapered bedroom with the old windows in metal casing and hand cranks.

Dilapidated Play Structure

No epoxy coating here.

"Bonus Room"

Here's what $10,000,000 looks like in other areas

$9,995,000 Highland Beach, FL

$9,900,000 Rye, NY

$9,995,000 Harwich Port, MA

In the past 12 months there have been 42 luxury property sales ($2,000,000+) in Santa Cruz County. With close to 50% of those being all cash purchases, the real money is coming in from the Silicon Valley. These "new money," affluent, GenXers expect the latest in updates and amenities. They don't want CAT-5 wiring, they want CAT-6.  Energy efficient systems don't mean anything unless they're plugged into the latest and greatest NEST system to be operated remotely from their iWatch.  No Uber or Lift service in the area? Forget it.

These young, high end buyers are of the mindset, "I want it. I want it now, and I'll pay a premium for it."  Trust me, as a Cupertino-raised and educated person I know how these people think. I grew up with them, went to high school with them, I took my SATs with them. In 2011 tech start-up Punchd was acquired by Google for a $10,000,000+ price.  Niket Desai, one of the developers, hailed from the same high school I attended.

My point is the money is here in Santa Cruz County. It's not just one commuter bus leaving from Scotts Valley; there are multiple commuter buses shuttling high-tech employees to Google, Apple, Netflix, and Yahoo!.  The next $10,000,000 buyer is already eating at Penny Ice Creamery, surfing the waves off 38th Ave, and dining at Suda.  It's not the price tag that scares off the new buyer, it's the horrific lack of updates.  Out with the OLD. In with the MODERN. Let's give them a house they want to spend $10,000,000 on.

On a final parting note.....
The drought doesn't discriminate. Even the uber-wealthy have dead grass. 

Aimee Thayer-Garcia is a Real Estate Broker Associate at Bailey Properties. She is Top-Producing Agent and practices Real Estate full time with her husband, Angel Garcia. Mom of 3.  831-435-9146. ATGarcia@BaileyProperties.com

Commitment to GIVE BACK to SANTA CRUZ CITY SCHOOLS

Being able to give back to our home community has been a long-standing part of our long-term goals.

In the past, we've made contributions here and there to the Red Cross, American Cancer Society, local sports teams, and donated cash during fundraising drives. 

We've also been regular givers of our time- coaching teams, volunteering weekly at the school, and encouraging our children to join us in local fundraisers.

The goal, though, is to be able to give consistently, regularly and with abundance. At the start of this year, Angel and I made a commitment that for every home we closed we would donate a portion of the proceeds to local schools, with no maximum limit.  It didn't matter what price the home sold for, what our expenses were, or how much time we spent. We would give.

We've started 2015 at a $500 donation amount per sale, to be donated to a local school of the client's choice.  In 2014, we sold 22 homes so we are confident the regular, consistent donation will add up to an amount that can make a difference.

In order to spread the word, Angel has been going door-to-door in the Prospect Heights neighborhood.  He's knocked on about 200 doors so far and has received an overwhelmingly warm response from neighbors, friends, and fellow Delaveaga Elementary families. 

If you see Angel or myself out there, we'd love to say Hi. We're not coming by asking you to sell your house (unless you're interested, of course!)  We're coming by to ask for the community's support in helping spread the word. 

Spread the word, let your coworkers and friends know.  If you, or anyone you know is interested in buying or selling, their sale can help benefit local schools.  If they're already working with a Realtor, encourage them to ask their Realtor to make a contribution to local schools at close.

Give us a call.  We'd also love to hear of any other charities or organizations that would benefit from others giving back.

Aimee Thayer-Garcia is a Real Estate Broker Associate at Bailey Properties. She is Top-Producing Agent and practices Real Estate full time with her husband, Angel Garcia. Mom of 3.  831-435-9146. ATGarcia@BaileyProperties.com