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Week of July 22nd-28th
Property Tips and Tricks
How to Find and Choose Your Architect
Embarking on a home project can be both exciting and daunting. One of the most critical steps in this journey is finding the right architect. Many homeowners struggle with this, often feeling overwhelmed by the sheer number of options and the importance of making the right choice. The information below will guide you through the process, ensuring you find an architect who not only aligns with your vision but also fosters a collaborative and respectful working relationship.
Clarifying Your Project Vision
The first step in finding the right architect is to be clear about what you want to build. Are you planning a modern minimalist home, a cozy cottage, or a sprawling estate? Knowing your project's style and scope will help you identify architects who have experience with similar projects.
Researching Potential Architects
Once you have a clear vision, start your search by looking at homes you admire. Drive around neighborhoods and take note of the homes that catch your eye. Often, you can find the architect's information by searching the address online or by visiting their websites, where they showcase their portfolios.
Making Initial Contact
Compile a list of about five architectural firms whose work you admire. Reach out to them to request a short 15-20 minute meeting. Don't worry about whether they will take your call—they will. Architects are almost always looking for new projects and clients.
Vibe Check
During your initial meetings, it's crucial to assess not just the architect's portfolio but also their "vibe." Can you communicate effectively with them? Are they good listeners? Do they seem personable and pragmatic? Observe how they interact with their team. Mutual respect and a collaborative spirit are essential for a successful project. Remember, you will be working with this person for the next 12-24 months, and it is essential that you feel you can build, and maintain, a good relationship with them throughout the process.
Reviewing Proposals
After your meetings, ask for proposals from the architects. These proposals should summarize your in-person conversations and outline the different components of their work, including:
- Site Plan Concepts: Initial concepts for the site layout and design.
- Concept Design: Developing the initial design ideas into a more concrete plan.
- Approvals: Obtaining necessary approvals and permits for the project.
- Design Development: Refining the design and preparing detailed plans.
- Construction Drawings: Producing detailed drawings and specifications for construction.
- Construction Administration: Managing the construction process, including quality control and timeline management.
- Interiors: Design and selection of interior finishes and fixtures.
Key Considerations
When reviewing proposals, pay attention to two critical aspects:
- Fee Structure: Some architects may front-load their fees, ensuring they get paid regardless of the project's outcome. A savvy architect will charge less upfront and more on the back end, aligning their success with the project's success.
- Hidden Costs: Be wary of wishful thinking regarding time estimates. Ensure that the architect's hourly calculations are realistic to avoid being charged repeatedly for underestimated tasks.
Finding the right architect for your home project involves a blend of research, clear communication, and careful evaluation. By following these steps, you can ensure that you choose an architect who not only brings your vision to life but also makes the journey enjoyable and collaborative. Remember, it's not just about loving their portfolio—it's about finding someone you can work with harmoniously throughout the project's duration.
Real Estate News
Insurance, Luxury Market, and Rates
Economic Crossroads
The U.S. economy showed resilience in Q2 2024, with GDP growth surpassing expectations at 2.8% annualized, well above the forecasted 2.1%. This positive momentum, however, is tempered by other economic indicators:
- Federal debt reached a historic high, approaching $35 trillion, with the debt-to-GDP ratio climbing to 122% - a 19 percentage point increase over five years.
- Inflation continued its downward trend, with the Core Personal Consumption Expenditures Price Index (excluding food and energy) dropping to 2.9% annualized in Q2 from 3.7% in Q1.
- All eyes are on the upcoming Fed meeting this week, with speculation about potential rate cuts (I am guessing no rate cut).
- The housing market showed signs of cooling, as existing home sales fell to an annual rate of 3.89 million in June, a 5.4% month-over-month decrease. This decline suggests a potential shift towards a buyers' market as inventory grows.
Local home sales data will be reported in the coming weeks, providing a more detailed picture of regional market trends.
Record Surge in U.S. Luxury Home Prices
In Q2 2024, U.S. luxury home prices soared 8.8% year-over-year to a record median of $1,180,000, marking the largest increase since 2022 and the highest in over a decade, excluding pandemic disruptions. This growth rate is more than double that of non-luxury homes, which saw a 3.8% increase to a record $342,500. Additionally, luxury home inventory rose by 9.7%, the most significant increase since 2015, reaching the highest level in three years. The ultra high-end luxury market is also booming, with sales of $100 million homes expected to double this year.
Insurance Matters
In 2023, U.S.. home insurers faced their worst loss this century. They experienced a $15.2 billion net underwriting loss.
This was the largest loss since 2000 and more than twice the previous year’s loss.
Natural disasters, inflation, and rising populations in high-risk areas were major contributors.
Insurance across California remains challenging, prompting recent reforms to the state's insurer of last resort, the California FAIR Plan. Here are the main points:
- Expanded Coverage: New "high-value" commercial coverage option with limits up to $20 million per building.
- Financial Stability: Improved financial formula to protect policyholders in extreme loss scenarios.
- Increased Transparency: Enhanced public reporting on FAIR Plan activities and customer service metrics.
- Breaking the Cycle: Reforms designed to reduce dependence on the FAIR Plan and encourage traditional insurers to re-enter high-risk markets.
- Broad Support: The reforms have garnered support from various stakeholders, including farmers, homeowners' associations, builders, and realtors.
The FAIR Plan's Role and Challenges
The FAIR Plan acts as a safety net, but its growing use creates a negative feedback loop. When more people rely on the FAIR Plan, traditional insurance companies withdraw from certain areas, leading to even more reliance on the FAIR Plan.
Potential Impact on Ratepayers
Part of these reforms could result in higher bills for policyholders. If the FAIR Plan's funds are depleted by a major event like a wildfire, it can assess insurance companies to cover the gap. Previously, these companies had no direct way to recoup these costs, but now they do.
- Cost Recoupment: If the FAIR Plan levies up to $1 billion in assessments on insurers in a year, insurers can ask the insurance commissioner for approval to charge temporary fees to policyholders, recouping up to 50% of their assessment.
- Full Recoupment: If the assessment exceeds $1 billion, insurance companies can recoup 100% of the costs.
Worked with me in the past? Share your experience.
Jonathan Balog
DRE# 01980970
Broker
M: 831.747.0310
[email protected]
Compass is a real estate broker licensed by the State of California operating under multiple entities. License Numbers 01991628, 1527235, 1527365, 1356742, 1443761, 1997075, 1935359, 1961027, 1842987, 1869607, 1866771, 1527205, 1079009, 1272467. All material is intended for informational purposes only and is compiled from sources deemed reliable but is subject to errors, omissions, changes in price, condition, sale, or withdrawal without notice. No statement is made as to the accuracy of any description or measurements (including square footage). This is not intended to solicit property already listed. No financial or legal advice provided. Equal Housing Opportunity. Photos may be virtually staged or digitally enhanced and may not reflect actual property conditions.
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