Wow, June just whizzed by.
I didn’t push any new content to the site this month. It was expected, though. First half of June, Kelly and I were on vacay. It was lovely. We indulged in Anglophile and Francophile daydreams as we traipsed around London and explored cobblestone streets in Paris.
My favorite thing about London was the quiet, leafy green, stately parks. Hyde Park. St. James. Greenwich.
Also the stately buildings of Whitehall, Westminster – Parliament, 10 Downing, the Supreme Court, Westminster Abbey, Scotland Yard, and most government ministries are all in the vicinity.
We arrived in London the night of the London Bridge terrorist attack. Scary. Heavily armed police everywhere.
The same week was the important snap election which transformed Tory party politics and dealt a humiliating blow to Theresa May, prime minister, just as Brexit negotiations commenced. John Oliver did a fall-off-your-chair funny segment on it.
In Paris, my favorite thing was watching the sunset over Ponte Neuf. Wasn’t planned, but it was a postcard moment. The Seine at sunset really is as romantic as they say. 🙂
Paris bakeries gave new meaning to words like fluffy, flaky, buttery.
I salivate just thinking about those croissants.
Those were two great, great cities and I’ll remember their sights and sounds for a long time.
Meanwhile, in June I booked revenue of $3,642, up +45% over last year.
The reason for the year over year pop is that last year was particularly slow.
1. House hunting goes passive
With home prices making as little sense as ever here in the Bay Area, and good inventory being so sparse, our house hunting efforts have gone passive.
Interesting thing is, I’m now seeing homes sell below list price…and not infrequently. Is the market topping out?
In the couple weeks before our trip, and during the time we were overseas, we paused our house search completely. Just didn’t seem worth the energy to fall for a place when we knew it would be so hard to close while overseas. There were a couple interesting places that popped up last minute, but not enough to make us drop everything and change our plans.
And since I’m basically tied up until mid-August finishing side project stuff, we’re looking at late summer before we can really get back into the groove of house hunting.
Meanwhile, mortgage interest rates, somewhat surprisingly, have not moved much since last fall’s election, despite 3 interest rate increases in a row.
Currently, the jumbo rate on a 30 year fixed is still 3.875%, same as 6 months ago.
The reason is because the interest rate on long-term (usually 10 year) treasury bonds, which is what fundamentally determines mortgage rates, hasn’t really budged.
This is now causing the yield curve to “flatten,” because short-term treasury rates are increasing while long-term treasury rates remain steady. The more that curve flattens, the more unusual it is, because investors typically demand higher rates to lock up capital for longer time periods.
Who knows if the curve will continue to flatten as the Fed increases short-term rates further (which is all the Fed can do to stimulate or throttle growth).
In theory, long-term rates should increase in lockstep with short-term rates. But with all going on in the world right now – Brexit, North Korea, diminished expectations that Trump can actually stimulate our economy – investors around the world continue to pile into and hold long-term treasury bonds as they seek safety for their money.
It is this demand for long-term treasuries that is keeping long-term interest rates down. In turn, it is holding mortgage rates down.
Simple supply and demand.
It’s a good thing we’re not racing against the clock to get a low rate imminently about to increase. Still, we’re not holding our breath anymore about finding a house fast.
So, we’re now also starting to look for new rental options…at the same time as we continue to look for a home to buy. We have a concrete timeline for moving closer to Kelly’s job (farther away from mine), regardless of whether we successfully purchase or not.
This means buying for us could be a slower burn.
To be sure, if something comes up that we fall heads over heels for, we’ll move lightning fast to write an offer. I’m just not holding my breath that all the “fit” and “location” and “price” stars will align easily.
2. Growing traffic
I’m going to report my growth stats a bit differently going forward. I’ll report two stats every month: the number of subs acquired in the past month as well as the latest number of Twitter followers.
For a while, I reported my “grand total” number of subs each month. But that number occasionally dips – a lot – on purpose, because I periodically go in and delete a bunch of emails off my list.
Why do I do that? Basically I prune off everyone who consistently isn’t opening or clicking on my emails, because I don’t want dormant subscribers on my list. (They’re not getting value and I’m paying for deadweight.)
So instead, going forward I’ll just report the number of NEW subs each month, rather than the total, as that will better reflect acquisition velocity.
Subs in June: 33
Twitter followers: 1,621
1. House hunting on multiple fronts
We continue to look for a place to buy in the Bay Area, but given how challenging it is and how little inventory exists, we’re going to split our home search efforts into different fronts.
We’ll look for a place to rent closer to Kelly’s job first, since rental inventory is flush.
I’m also doing a LOT of analysis and gathering lots of intel on the Austin, Texas market because I know it reasonably well (from college days) and the prices – while pretty high – aren’t as consistently impossible as in the Bay Area.
If we buy in Austin, we could probably buy multiple units, or a larger multi-family, and then we’d just hold it as investment property while renting locally.
Thing to watch out for in Texas is the high homestead taxes. Texas doesn’t have a state income tax, so the primary local government revenue-raising mechanism is the homestead tax.
Lastly, we’ll still search for a home in the Bay Area, and if we’re able to find a great place before we set loose a bunch of capital into Austin, then we’ll be happy either way. After mid-August, I’m gonna start sleuthing out harder-to-get-at sources of info for potential leads:
- Probate records
- Divorce records
- Tax lien notices
These aren’t as straightforward as browsing MLS listings.
But if you have patience and diligence, you can get a lot of public records info about these pivotal life events that often precede real estate sales…in advance of the listing hitting the MLS. If you move fast enough, you might be able to convince the owner to sell to you directly.
To be sure, the conversion rate for this funnel is going to be really small. Especially in a place like the Bay Area, where there’s almost no incentive NOT to list on the MLS to escalate a bidding war.
So to make it attractive, you still have to purchase almost at market price. However, you can offer the seller a better deal if agents aren’t involved, because then they get to keep more money for themselves (no commissions), and you get a little discount.
Every once in a while, a deal like this can happen, even in the Bay Area. And you only need it to happen once (for your primary residence).
To that end, as I always ask, if you have a house you wanna sell but don’t want the hassle of cleaning, staging, marketing, and dealing with nosy neighbors parading over your nice stuff, AND you wanna keep more money in your pocket by deleting the middleman, holler at me.
Whatever your situation, I’ll probably be able to help you get the outcome you want.
2. Grow traffic
July new subs goal: 40
July Twitter goal: 2,000