Why Should You Start Looking for a House During the Holiday Season?

Posted on November 3, 2011 by S. Onder Kustu, MBA

You probably have heard that the Holiday Season is a good time to look for a house, as most people would be more worried about family dinners, holiday parties, and shopping for presents than looking for a new house.  With fewer buyers on the market, the sellers would be willing to accept lower offers.  Intuitively this makes sense.  But, is it supported by the sales data?

Seeking factual support for the above hypothesis, I analyzed  the sales data for single family homes in San Mateo County for a six year period from 2005 through 2010 (raw data  source:  MLS through San Mateo County Association of Realtors®).  The results of the analysis are summarized in the following three charts:

Monthly home sales as percentages of annual sales are the lowest during the months of November through February. This supports the claim that there are less buyers in the market between September and January (allowing 30-45 days from offer acceptance to closing the sale).

Number of days it takes from listing to closing starts increasing in August and it is the highest in January. In other words, it takes about twice as long to sell a house during the Holiday Season as in the summer months.

Buyers who begin looking for a house early in the year do not have much bargaining power, as they pay almost the full asking price. Those who don't mind shopping for a house during the Holiday Season are rewarded with an almost 2.5% discount, on the average, from the asking price.

The charts are self explanatory  and the data points represent averages of the numbers for the six years, 2005 through 2010.  “Sale” refers to the closing of escrow, which occurs 30-45 days after an offer is accepted and a sale contract is signed.

In summary, the sales data for San Mateo County support the claim that the “Holiday Season” is the best time for buyers to look for a home. The buyers who are willing to go house-hunting instead of holiday shopping will be rewarded by the home sellers who are willing to accept offers that are 2.5% lower on the average than they would have accepted during the peak sales period.

Happy Holidays and Happy House Hunting!

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The First Seismic Retrofitting Project in the World!

Posted on October 16, 2011 by S. Onder Kustu, MBA

A few weeks ago I had an opportunity to visit the Hagia Sofia (Aya Sofya) in Istanbul, Turkey.  Built originally as a church in the 4thCentury by a Roman Emperor, it was damaged by earthquakes and fires over the centuries, and it was repaired, restored, and rebuilt several times by various Roman and Byzantine emperors.  In 1453 it was converted to a mosque by (Fatih) Sultan Mehmet II, the Ottoman Sultan who conquered the City from the Byzantines.  Mustafa Kemal Ataturk, the founder and then president of the current Turkish Republic converted it to a museum in 1935.  It is now open to all visitors to observe its magnificent architecture, construction, and its Christian mosaics along with its Islamic decorations and Calligraphy.

During the period between 1566 and 1577, Hagia Sofia was strengthened to better resist earthquakes by the Ottoman Architect (Mimar) Sinan, who added massive exterior buttresses to brace the structure.  Sinan is said to be the first Earthquake Engineer,  and the strengthening of Hagia Sofia the first seismic retrofitting project.

I also visited the Chora Church in Istanbul, which is also a museum now (Kariye Muzesi).  It is much smaller than Hagia Sofia, but it has a similar architecture and construction.  Its walls, arches, and domes are covered with fascinating mosaics and icon paintings.  It was very interesting to observe, however, that it had the same exterior buttresses as the Hagia Sofia.

I have not found any information indicating when the earthquake-resisting buttresses of the Chora Church were built, whether they were indeed retrofitted, and if Sinan was indeed the earthquake engineer responsible for this project as well; there seems to be less information available on Chora Church than Hagia Sofia.  Never the less, the seismic reinforcements have worked very well for both of these structures as they have survived at least 450 years without any apparent earthquake damage.  My greatest admiration goes to Sinan (and any other earthquake engineer) who designed and constructed these projects using only brick, stone, and mortar  without having any knowledge of advanced structural or soils mechanics or analyzing “finite element models” of these complex structures with advanced structural analysis software on super computers (or their lap-tops)!

A general view of Hagia Sofia. The buttresses that brace it for earthquakes are on each side of the central dome structure (perpendicular to the plane of the picture).

An inside view of the Hagia Sofia.

Buttresses on the oppposite side of those shown in the first picture.

The Chora Church. Note the buttress in the forefront.

A close-up of the buttress that braces the Chora Church against earthquakes. Note its similarity to buttresses that brace Hagia Sofia.

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Housing Affordability Highest in a Generation!

Posted on August 17, 2011 by S. Onder Kustu, MBA

According to the National Association of Realtors’ research (http://alturl.com/aoxoj), the housing affordability index is now higher than it has ever been since the 1970’s. The index stands at about 175%, which means that a family with the median-income is earning 75% more than the minimum income required to purchase a median-priced home. The increase in affordability is mainly due to declining home prices and low interest rates. I think young families that have stable incomes should take advantage of this window of opportunity and buy their first homes now.

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An ABAG Workshop: “Shaken Awake- Creative Ways to Strengthen Housing and Promote Community Resilience in Today’s Economy”

Posted on August 16, 2011 by S. Onder Kustu, MBA

The search words that lead some readers to this blog site indicate that many home owners and home buyers are worried about their vulnerabilities to earthquakes, how to reduce their earthquake risk exposure, what makes a house earthquake-resistant, and how they can retrofit their homes to reduce their earthquake risk.  The articles I write here provide answers to some of these concerns and direct the readers to reliable information sources elsewhere.

One of the most reliable information sources for earthquake-related information I often refer to is the website of ABAG (Association of Bay Area Governments): http://www.abag.ca.gov.  ABAG recently held a workshop entitled “Shaken Awake” and posted a workshop summary and the presentations on their web site.  Those who would like to learn more about “the Next Bay Area Earthquake,” how the Bay Area may look like following a large earthquake, liabilities of property owners to third parties, earthquake insurance, and residential retrofit programs should definitely visit this site and read and/or download for future reading the workshop summary and the presentations.  Here is the URL:  http://quake.abag.ca.gov/housing/shaken-awake/.

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An Afternoon at Treasure Island

Posted on June 28, 2011 by S. Onder Kustu, MBA

We took a ride to the Treasure Island recently for a pleasant Sunday afternoon.  I posted a small slide show on our website about the trip.  You can view it here:  http://boomerese.com/TreasureIsland.html

While you are at it, you may like to check out the other pages of “Our Neighborhood.”

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A New Location Parameter- “Walkability”

Posted on June 21, 2011 by S. Onder Kustu, MBA

This site http://www.walkscore.com/ lets you calculate the “walkscore” of  a location.  Interesting concept!  It is like the MPG rating for cars and the energy rating for appliances.  You may like to check the walkscores when you are looking for real estate.

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Natural disasters and risk to homeowners associations

Posted on June 18, 2011 by S. Onder Kustu, MBA

Here is an interesting article that goes with what I have been talking about…

Disaster! ~ No reserves. No Insurance. What’s Left if a Natural Disaster Destroys a Community Association? – Article by Tyler P. Berding, Esq. and Steven S. Weil, Esq..

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Your Earthquake Risk Exposure Part II- Seismic Retrofitting

Posted on June 16, 2011 by S. Onder Kustu, MBA

In the previous article, I talked about your earthquake risk that is related to indirect effects of earthquakes on your house, such as liquefaction, tsunamis, flooding caused by dam failures, landslides, firestorms  triggered by the earthquake, etc.  Your best option for managing this type of risk, short of moving elsewhere,  is purchasing earthquake insurance.

The other part of your earthquake risk is the likelihood that your house will be damaged due to a direct earthquake effect― ground shaking.  The extent of earthquake damage to your house is determined by the characteristics of the ground shaking and the characteristics of the house.  You cannot do anything about the ground shaking, but you can do something about your house:  design your new house to be seismically safe & sound, or retrofit your existing house!

If you are building a brand new house, you must make sure that your house is well-designed to resist earthquake shaking.  We at OAK Structural have been designing safe & sound homes in the Bay Area for many years; we would be happy to design your next home.  You can email me at onder@boomerese.com to start the process.

Deciding to retrofit (strengthen) your existing house requires a consideration of the cost of the retrofit versus how much the retrofitting is likely to reduce your seismic risk.   A precise analysis of a wood-framed house to determine how much damage it may incur in an earthquake (before and after it is retrofitted) is next-to-impossible (yes, even in the 21st Century).  So, instead of a complex technical discussion, I will give you my opinions on when you should not worry about retrofitting and when you should.

When to Do Nothing or to Just Do Minimal Retrofitting

If your house fits the following description, you should probably not worry about retrofitting it, but you should consider purchasing earthquake insurance:

  • Your house is built on a flat lot;
  • It is a one-story house;
  • It is not an “Eichler House;”
  • It is not a split-level house (the floor is at the same level in all rooms of the house);
  • The floor is either a concrete slab-on-grade, or  it has  wood sheathing over 1.5” wide joists (usually at 16-inch spacing);
  • There are no cripple walls (the floor joists are directly supported on sill plates that are set on the concrete footings);
  • The sill plates are bolted to the concrete;
  • There is wood or plywood sheathing on the exterior walls;
  • There are no unusually large rooms;
  • All rooms have flat ceilings;
  • At all sides of the house, there are as much or more walls than windows and doors;
  • It does not look like a “U” or “L” in plan;
  • It does not have a slender brick fireplace chimney.

There are few caveats I need to add here:

  • If your house does not fully fit the description above, but it is less than twenty years old and it was designed by a structural engineer, you may still not worry too much about retrofitting.  If the house was indeed designed by a structural engineer, it should have approved permit plans that are stamped and signed by him or her at the City or the County Building Department.  There should also be records of the building inspections made during the construction.
  • If your house fits the description above, except that it is built on cripple walls (wood stud walls between the floor joists and the concrete foundation) with no plywood sheathing on them and/or the sill plates are not bolted to the foundation, you should hire a licensed contractor to install plywood sheathing on the cripple walls and bolt the sill plates to the foundations.  This is the most basic and cost-effective residential seismic retrofit scheme; your money will be well-spent.
  • I think brick fireplace chimneys do not belong in this Earthquake Country.  I have seen many cases of older (and some recent) brick chimneys falling down  in earthquakes.  My recommendation to homeowners is to remove the brick chimneys above the fire-box, and build new wood-framed chimneys with metal flues in their place.  Light-weight brick veneer may be used on the exterior of a wood-framed chimney, if one really likes the brick look.

When to Consider Seismic Retrofitting:

If your house has some of the following characteristics, and it has not been designed by a structural engineer during the last twenty years or so,  your house is a candidate for seismic retrofitting:

  • The house is on a hillside;
  • It has two or more floor levels (including split level houses) and/or has a room over a garage;
  • It is an “Eichler House;”
  • The 1st floor is supported on 4×6 beams, spaced at 4-feet (except for the Eichlers).
  • There is no wood or plywood  sheathing on exterior walls;
  • It has very large rooms/openings;
  • It has spaces with vaulted ceilings;
  • Some of the upper level exterior walls are offset from the lower level walls (inward or outward);
  • At some sides of the house there are more windows than the walls;
  • The house plan looks like a “U” or “L.”

If your house is a candidate for retrofitting because of the above issues, you should consult a structural engineer and discuss whether or not, and to what extent, you may need to retrofit your house.  I do provide consulting services as a partner in OAK Structural; please email me at onder@boomerese.com to arrange for an on-site consultation.

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Your Earthquake Risk Exposure

Posted on April 13, 2011 by S. Onder Kustu, MBA

Do you know your earthquake risk exposure and what you can do to reduce it?  Most people don’t.  In this article,  I will talk about your earthquake risk related to where you live:  Your home.  Your earthquake risk related to where you work (which could be substantial) is not addressed here.

“Risk” is the probability of certain consequences occurring.  For example, your life-safety risk from earthquakes is the likelihood that you may die or be injured in an earthquake.  Similarly, your financial risk is the likelihood of certain financial losses that you may suffer as a result of direct and indirect effects of earthquakes.

I am not aware of anyone ever dying in California in a wood-framed single-family house as a result of an earthquake (there may have been some injuries).  So, without going into highly technical analyses, we can say that the likelihood of you dying in your wood-framed house in California during an earthquake is negligible (I admit that I am a bit concerned about the future in light of the recent tsunami in Japan).  However, your financial risk can be substantial depending on the location and characteristics of your house.

Earthquake risk arises from the “direct” earthquake effects on your house, such as the damage caused to your house by ground-shaking,  and from the “indirect” effects, such as the damage caused to your house by liquefaction, ground deformations near the earthquake faults, landslides, tsunamis, fires, and inundation due to failures of levees and dams.  Changing the characteristics of your house by seismic retrofitting can reduce your risk only for the damage caused by ground shaking.  I will talk about seismic retrofitting in the future.  Let us consider now your risk exposure due to the indirect effects of earthquakes, which are primarily location-related.

There is very little you can do to protect your house from liquefaction, ground deformations, landslides, tsunamis, firestorms, and inundation that may follow an earthquake.  You could perhaps reduce the landslide potential by constructing retaining walls at your site, and improve the fire-resistance of your house by changing its roofing and exterior siding to fire-resistant materials.  Otherwise, the only way you can reduce your risk from indirect effects of earthquakes is to buy earthquake insurance (of course, you can also buy a house in an area that is not subject to any of these earthquake-related hazards).

Association of Bay Area Governments (ABAG) provides all the information necessary for home-owners to determine, at least qualitatively, whether their houses are subject to any risk from the indirect earthquake effects of earthquakes.  At their site “Earthquakes and Hazards Program,” you can find the various maps that will tell you if your house is located in a potential liquefaction zone, inundation zone, etc.  If your house is located in one of these hazard zones and the total loss of your house is something you could not or do not want to deal with, do yourself a favor and buy earthquake insurance.  Do it today, as today might be the day we will be hit by the “Big One.”

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A New Earthquake-Preparedness Strategy: Cross Your Fingers!

Posted on March 29, 2011 by S. Onder Kustu, MBA

The Cypress Street Viaduct in Oakland, California collapsed in the 1989 Loma Prieta Earthquake and killed 42 people.  The Viaduct’s lack of earthquake resistance was well-known within the structural engineering community.  There is no doubt that this was also known to Caltrans administrators and engineers.  But, nothing was done to remedy the situation.  Caltrans was busy installing cable ties across the supports of multi-span bridges, so that the individual spans would not pull away from the supports and fall down.  By doing this relatively inexpensive and easy-to-do fix, they appeared to be very busy preparing for an earthquake, while avoiding the bigger, more difficult, and more-expensive-to-solve problems.

Earlier, in “Seeing, Believing, and Earthquake Preparedness” I wrote about how seeing what earthquakes (and tsunamis) can do should make a believer out of those who do not know about or take such disasters seriously, and hopefully, should encourage them to prepare for the next “Big One.”  It was wishful thinking on my part, as I have seen over and over how people (particularly,  the politicians) get excited after a disaster, but in a year or two they forget all about it.  Things go back to normal:  they have more important things to worry about and spend money on.

This article in The Economist: “Fingers Crossed- A row over a rickety viaduct” discusses a similar situation developing in Seattle, Washington.  There is this “Alaskan Way Viaduct,” which they know is vulnerable to a large earthquake.  Apparently, the experts estimate that “the odds of an earthquake bringing it down are one in ten over the next decade.”  And, 110,000 vehicles use this viaduct every day! As they will have a new tunnel to replace the viaduct, they will let 110,000 vehicles drive over it every day until 2016, when supposedly the tunnel will be finished.  The Mayor of Seattle apparently proposed to close the viaduct next year, but he immediately was accused of “fear mongering” and “endangering the local commerce.”  Apparently, the compromise solution was to install new gates on the viaduct that will “automatically block access―one minute after a quake is detected.”  No thank you; if I am ever in Seattle,  I will do my best to avoid driving on that viaduct.

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