From Price to Expertise to Performance – Canadians Make a Great Choice
With all the noise President Trump is making about bringing back jobs from overseas and trashing the NAFTA agreement, you’d think global trade is coming to an end. And as wonderful as it is to see jobs come back to Los Angeles, San Diego, San Jose and San Francisco, California companies need to hire outside the US for a number of reasons which you’ll read below.
California businesses need to leverage experts in various disciplines, but at a cheaper price. Since US wages and USD are going to rise from 2017 to 2020, and US competitiveness will therefore drop, you have to look outward for solutions. Will you find them in India, Mexico or China?
If US Companies want to continue to grow domestic and International sales, their best partner is Canada
Funny thing is happening in Canada. Our money is losing its value which means Canadians have to work harder to get the same benefits. That makes some Canadians eager to be educated, grow, improve and offer outstanding results to clients. The lower cost is just icing on the cake.
Fortunately for California businesses, Canadian culture and values and language are very similar. There’s no cultural misfit, no friction, language barriers or emotional disconnect. Our economies, news, technology and laws are so similar, we don’t even see a border. The relations between US companies and their Canadian connections is excellent.
I’ve found working with American clients to be much better. Your business leaders are more open minded and confident (due to business culture and bigger markets) and that is what precedes success.
The Unique Value Proposition from Canada
The integration of Canadian/US business makes Canada a natural fit. Any aspect of production and marketing can incorporate Canadian providers
Canadians are in the same time zone
Canadians can work at 33% less cost
Canadians have a unique perspective that lets them see US business clearly and not possess blindspots that many US providers might have
Canadians work hard, are flexible, friendly and actually like Americans
As you’re putting together your 5 year plan for digital marketing and advertising, keep in mind that the best provider might not be in San Francisco, Sacramento, Los Angeles, San Diego, or San Jose. It’s up here in the great north. Our market’s not great here, which is why we’re very loyal and optimistic about working with our neighbors south of the border.
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Enjoy this look at the housing market and real estate opportunity in the San Francisco Bay Area market. There are plenty of stats and charts below to help you understand the market better.
In many big US cities, losing an apartment rental lease is a serious matter. For some, it could lead to living in a vehicle or on the street or in grossly over-occupied dwellings. New York, Miami, Los Angeles, and Seattle are cities where renters are exposed to low availability and high rent.
Why discuss apartment rentals in San Francisco? Because renters here in the Bay City are looking to become home owners to build equity for their lives. And investors across the US and other countries are looking for rental income properties.
The Bay area and San Francisco in particular are rated as the best locations for rental income investment. Builders have a grand sale or rental income opportunity in San Francisco.
How big is the need? It’s a textbook case of supply and demand where demand is huge and development is stunted and current homeowners have no intention of moving, even after retirement. This recent news about a Palo Alto commissioner quitting her job because it’s too expensive in Palo Alto says it all for everyone in the Bay Area and City of San Francisco. This woman and her family are moving 40 miles away to Vera Cruz.
“We rent our current home with another couple for $6,200 a month,” she wrote. “If we wanted to buy the same home and share it with children and not roommates, it would cost $2.7 million and our monthly payment would be $12,177 a month in mortgage, taxes, and insurance. That’s $146,127 per year — an entire professional’s income before taxes.” – experpt from a news report in Bizjournal.
From sfrealtors.com, the newest report shows dwindling supply.
Inventory continues to be tight. Active single family home listings in San Francisco saw a 21.7% decrease bringing the number of listings for sale down to a sparse 387. During this same time there were 509 condos, TICs, and coops on the market, a 20.6% decrease from this same time last year. Homes in San Francisco saw a 34% increase from this same time last year, bringing the median sales price to $1,216,500. Condos, TICs, and coops saw a 10 percent increase, bringing the median sales price of those types of housing to $950,000.”
San Francisco home prices are $1 million above the above the average detached home price of a home sold across the US. The forecast for San Francisco is an extreme version of the Los Angeles forecast.
More Development Forecast?
The Trump government is shining the light on special interest groups or local governments who may be deliberately thwarting housing development. This might be the biggest news in real estate in 2017 to 2020. Is exposure of municipal and state government restrictions and management of land and development going to a major break for new home investors and builders? Should the 2017 forecast be about the coming building boom?
Here’s the source of the problem in California communities:
The Legislative Analyst’s Office found that California’s coastal metros take about two and a half months longer, on average, to issue a building permit than in a typical California inland community or the typical U.S. metro,” the report admits. The result is housing gridlock. From a post in sfchronicle.com.
A hot economy in the Bay area but perhaps leveling off?
Reports on San Francisco’s jobs and income growth look excellent. And if you’re a Trump believer, and supporter of bringing back American jobs, you have to feel pretty good about the jobs outlook, unless you’re a renter.
SF CONTINUES TO LEAD STATE IN JOB GROWTH
The San Francisco Metropolitan District (MD) continues to lead the state in job growth, and with an annual 4% increase in employment as of March 2016, is expanding its workforce at one and a half times the pace of California as a whole (2.65%). The San Francisco MD added 41,900 new nonfarm positions to its jobs base from March 2015 to March 2016. — from Beacon Economics report on the San Francisco economy.
Forecasts available at beaconecon.com/products/regional_outlook_san_francisco
And another report has it that tech in San Francisco Silicon Valley is strong and invulnerable to drops:
The Bay Area and California are in for slower job growth this year and next, but the Bay Area, powered by its high-tech economic engine, will outpace the state in job creation, according to two new economic forecasts released Wednesday.
This year and next, the technology sector will add jobs at a brisk clip, propelling the Bay Area employment market and economy at a healthy pace, according to Christopher Thornberg, director of the Center for Economic Forecasting and Development at UC Riverside’s School of Business. “Tech is hot and will keep pushing the Bay Area forward,” Thornberg said. – exerpt from news report in Mercury News (http://www.mercurynews.com/2016/09/28/forecasts-bay-area-job-market-economy-poised-to-shine/)
Housing Affordability Sucks in California
Why? The housing affordability rate has dropped 21% in 6 years, likely the key driver, moreso than immigration, high tech business success, or income growth. In San Francisco, people have to pay whatever the market demands. And renters haven’t been looking really. Only 16% bother to contact a realtor.
Now in 2017, we’ve seen prices fall in most areas of the SF Bay, except San Francisco and Santa Clara. I’m getting calls from Realtors north of SF so it looks like those areas are becoming more affordable options compared to SF which just keeps heating up.
And with home prices staying or rising, the forecast for apartment rentals is high demand and high prices — great news for rental income property investors. Accommodation costs are a significant personal and professional problem for Californians which may never go away.
New Home/Condo Development in SF from Paragon Realty
Looks like developers are gearing up for even greater supply.
Infographic courtesy of Paragon Real Estate Group
Overall, the US homes forecast and the Los Angeles housing predictions and outlook are positive. The introduction of Donald Trump and republican government policies to loosen up restrictions on mortgages and perhaps development land could ease prices, but it may take quite a while. If the economy improves, there could be an additional rush of new workers to the area. Employment outlook: SF now has 547,000 employed people compared to 448,000 during the dot com boom era an increase of 99,000. Lots of high earning renters and buyers.
This recently published chart from Zillow reveals the California cities of San Diego, Los Angeles, San Jose, Sacramento, and San Francisco are the most expensive and least affordable places to buy a home. Combine the stressful commute times in LA, and the Bay Area, and you have a population feeling on edge, uncertain of their long term future. The word rent is one of the foremost ones in the vocabulary of Californians. Only 30% own their own home.
Fueling the frenzied demand for San Francisco apartment rentals is a growing affluent and young population whose incomes are rising. San Francisco has the highest apartment rentals prices in the US.
The national Apartment rental index chart from Apartment list shows how prices have jumped this year across the country.
And the rental apartment rates in San Francisco, San Jose and Los Angeles are in the top ten most expensive. An average apartment for rent in San Francisco will set you back a whopping $4700 per month.
The San Francisco Housing Forecast
See this exerpt from rereport.com with quote by California Association of Realtors president Pat Zicarelli:
The C.A.R. forecast sees a modest increase in existing home sales of 1.4 % next year to reach 413,000 units, up slightly from the projected 2016 sales figure of 407,300 homes sold. Sales in 2016 also will be virtually flat at 407,300 existing, single-family home sales, compared with the 408,800 pace of homes sold in 2015.
“Next year, California’s housing market will be driven by tight housing supplies and the lowest housing affordability in six years,” said C.A.R. President Pat “Ziggy” Zicarelli. “The market will experience regional differences, with more affordable areas, such as the Inland Empire and Central Valley, outperforming the urban coastal centers, where high home prices and a limited availability of homes on the market will hamper sales.
As a result, the Southern California and Central Valley regions will see moderate sales increases, while the San Francisco Bay Area will experience a decline as home buyers migrate to peripheral cities with more affordable options.”
The Exodus of Buyers and Renters
Renters used to stay in town, but they are forced ever more into the surrounding countryside along with those who can buy, to search for cheaper places. The commute times for renters and buyers will get much longer and automobile insurance, maintenance and fuel costs will add to their cost of living. Despite a rise in condo developments, buyers are looking far outside San Francisco for a new home.
Where to buy Homes in San Francisco?
Wondering what is being developed in San Francisco? SF Curbed has a listing of 26 proposed high rise developments in the works. Check them out in the link at right.
The new developments on Fremont St perhaps carry the most weight for renters with hundreds of units coming available.
The Rincon Hill development is the first neighborhood plan adopted by the SF Planning Commission in more than 10 years. Combined with the Transbay area development, it is a major housing development estimated to create housing for as many as 20,000 new residents. High rise towers in San Francisco? Yes, the Rincon development is for construction of 4 to 8 story buildings, and slender residential towers ranging in heights of 250 to 550 feet. The tallest towers are slated for the top of Rincon Hill, where they will form a distinctive new element on the City’s skyline.
Conclusion on the San Francisco Real Estate Forecast
You’ve read the stats – record high and continuing job growth, huge multinational high tech firms with boatloads of cash, a changing mood toward land and housing development, and a new US president who may be biased toward real estate development. The investment opportunity in SF looks to be as strong as it is anywhere, with the potential of extreme profits on investment. Home flippers, new construction developers, and small builders should find plenty of room for profit if they can get property owners to sell their land.
Gord Collins Los Angeles Real Estate Marketing — I generate leads for realtors in Los Angeles, Anaheim, Beverly Hills, Malibu, San Diego, San Francisco, San Jose, Fresno, Santa Clara, Sacramento, Mountainview, Palo Alto, Sunnyvale, Riverside, Rancho Cucamonga, Costa Mesa, Thousand Oaks, Simi Valley, Oceanside, Long Beach, Huntington Beach, Carlsbad, Santa Clarita, Temecula, Stockton, Palm Springs, Chula Vista, Escondido, Santa Monica, and more. Find a Los Angeles Real Estate Agent who actually wants to work with you.
California Homebuyers – Who Understands their Pain?
A little empathy goes a long way. Our clients have hopes, needs, dreams and sometimes a frustrating reality. If you’re a realtor, mortgage agent, home renovator, home developer, building product supplier, or financial services provider, you probably need to get intimate with the pain of home buyers in LA, San Diego, New York, and San Francisco.
Understanding their real lives is a powerful way of connecting way with them online.
In this post, I’m going to help you reach into that emotional realm where they live to build a brand and content strategy that will appeal to them, and make them adore you.
It’s all about empathy (and a little humor). Owning a home is a still strong value in California culture even if fewer feel it’s possible. Donald Trump pointed out how few people own their own home. In Los Angeles, it’s the worst because of limited housing stock and wickedly high prices. This stress and feeling of helplessness is a key thing you can help them with. It has to be dealt with before any of them will buy a home. Trump struck a chord by identifying American’s severe frustrations, but his lack of humor didn’t win everyone over.
5 Key Sources of Frustration:
feeling of falling behind – can’t buy a home the right time or place, have insufficient income, rising debt, and mounting costs they have little control over
life/work balance out of whack and less enjoyment of anything – out of shape and feeling guilty they can’t see the kids or their spouse and family and friends enough
tiredness, lack of sleep, and exhaustion from work and commuting – worries about health that joga and healthy food won’t fix
can’t make enough money and are unable to build equity in their lives – no hope of owning a home and saving money
can’t find a cheaper/better apartment so they can save money and time in order to one day buy a home and start a family
Californians are Pessimistic about Owning a Home
The latest report from Fannie Mae shows the Home Purchase Sentiment Index has dropped significantly across the nation. Even though prospective homebuyer’s incomes are up, it seems they’re more pessimistic than ever. Will the new President Elect Donal Trump come to the rescue as he’s suggested in his campaign promises? We’ll soon see.
Fannie Mae’s 2016 Home Purchase Sentiment Index (HPSI) decreased again in October by 1.1 percentage points to 81.7. Overall, the HPSI is down 1.5 points since this time last year.
Only 30% of Americans say now is a good time to buy a home
15% say this is a great time to sell a home (up 4%)
Homebuyers expect mortgage rates to rise
The Theory: According to Fannie Mae, only 34% of California home buyers could afford to purchase the $465,280 median-priced home (in the first quarter of 2016, up from 30% in fourth-quarter of 2015). 41% of home buyers were able to purchase a $389,910 median-priced condo or townhome. An annual income of $77,575 was required to make a monthly payment of $1,939. But if mortgage rates and fuel prices rise, and the economy blips, those numbers will fall.
It’s a seller’s market, particularly in Los Angeles, San Diego, and San Francisco regions. The pessimism of buyers is reflected in their belief as well that home prices will rise and affordability drop, and their stressful commute to work will worsen.
Californians Fight Long Commutes
Only Washington DC commuters suffer a longer daily commute, and now that Donald Trump is going to drain the swamp, LA will likely to rise to the top spot as the toughest commute in the country. L.A. has 6 of the 10 most packed roadways in the country and let’s not forget the heat and smog of driving very slowly on Los Angeles highways.
The pain of a long commute is a headache for a lot of homeowners in LA, SD and SF. Not that new home development will solve the lengthy drives to work. LA may be in the market for more commuter trains. Even California pets get a little edgy behind the wheel!
Where LA Area Workers Are Commuting to
This is such as cool animated gif created by the California Association of Realtors showing LA drivers daily commute.
To purchase fictitious median-priced homes, LA, San Diego, Central Valley or SF Bay Area workers are having to live further away and that’s clogging already congested highways. Does anyone want to drive in from Riverside, Sacramento, Oakland, San Bernardino, Anaheim, or Vista? As this commuter infographic shows, LA drivers need to be innovative to get to work on time.
Here’s an exerpt from the LAist.com regarding perhaps the biggest pain homebuyers have in California: Commuting. And this was several years ago.
“While the numbers are slightly dated, rewinding back to 2006-2010 and 2011, they’re still relevant today. 11.9% of workers ages 16 and over in L.A. County suffered a commute of 60 minutes or more in 2011, which was slightly above the 8.1 national percentage. Another area where L.A. topped the national average was in commute time. The average commute time for county residents was 29.4 minutes in 2011, compared to the nation’s 25.5 minutes.”
Along with the deadly commute is perhaps frustration of needing to move away further from where they want to live. They may resent the relocation and have a negative attitude to their new community, and are more even more tired and stressed when they return home every evening.
In the Los Angeles housing forecast report, we discovered that the commute situation will probably worsen. Will improved highways ease the commuter nightmare? Will cheaper gas prices and electric cars make the pain go away? Will higher wages resolve the problem or make it worse?
Will the California government begin to open up more land to development and provide incentives for companies to move out of LA, San Diego and the Bay Area to ease the commuter problem? Likely not until the next elections bring forth Californian’s smoldering fury. LA and the Bay area have the same growing pains as any other major city, however mass transit actually contributes less as a solution.
Creating Empathy and Giving Compelling Solutions
You can gain a lot in terms of appearing informed about homebuyer’s situation and look to have viable solutions for easing their pain, including finding a home at a great price. It’s important to remember that as a business person online, you are your content. If it’s irrelevant, unresponsive to their pain, and doesn’t appear to offer the solution, they will not only leave, they’ll consider you irrelevant.
10 Vital Topics you should explore on your website:
how to ease commuting stress
how to lower financing costs and find starter homes to build their equity
where to buy a better commuting vehicle
how to find a new job farther away from the city
how to find a great community in rural areas for their kids
how to talk their bosses into telecommuting for at least one day a week
mention local elected officials and what they’re actually doing to ease homebuyers purchasing and traffic congestion and commuting pain
showing homeowners how they can sell their homes for fortunes and find a better life elsewhere
how finding a home in your community with precisely the key features that will make their lives better
how to relax and enjoy their homelife in a distant community
By building content that relates specifically to homebuyer’s pains, and demonstrates concern and solutions, they’ll see you as the most credible professional, someone they will look forward to hearing and doing business with.
Californian’s have plenty of other dreams, pains and frustrations, and perhaps we can research them all and give them some comfort. Researching and writing good content that ranks well in Google and converts like crazy isn’t easy. You’ll need some help!
Gord Collins Los Angeles Real Estate Marketing — I generate leads for realtors in Los Angeles, Anaheim, Beverly Hills, Malibu, San Diego, San Francisco, San Jose, Fresno, Santa Clara, Sacramento, Mountainview, Palo Alto, Sunnyvale, Riverside, Rancho Cucamonga, Costa Mesa, Thousand Oaks, Simi Valley, Oceanside, Long Beach, Huntington Beach, Carlsbad, Santa Clarita, Temecula, Stockton, Palm Springs, Chula Vista, Escondido, Santa Monica, and more. Find a LA Real Estate Agent who actually wants to work with you.