Have you seen our 2011/2012 Red Book?

How do you commemorate the 150^th anniversary of one of our country’s most influential architects, Bernard Maybeck?

If you’re the owner of one of his masterpieces, you open your home for others to appreciate. If you’re a historian, you write a book. And if you’re a real estate brokerage closely connected to the San Francisco Bay Area community and its architectural heritage, you educate your agents about the man whose focus on craftsmanship, natural materials and elegant lines had a significant influence on the character of our most attractive neighborhoods.

Last month, The Grubb Company and 60 of its agents began their celebration with a tour of one of Maybeck’s largest East Bay homes, the Guy Hyde Chick House in Oakland. “The character and soul of a Maybeck is truly unique,” said DJ Grubb, “and I wanted our agents to experience the details that make Maybeck a true pioneer of today’s ‘green’ living movement.”

Art collector Foster Goldstrum, who has been the owner and loving caretaker of this showcase for over 30 years, was generous in providing a private tour. Mark Wilson, an architectural historian whose new book “Bernard Maybeck Architect of Elegance” was published last August, joined the group to share his insights into the full body of Maybeck’s work.

Owning a Maybeck

Unlike some architects who make their name creating monuments to their own creativity, Maybeck designed homes that were sensitive to the environment and fit the unique personalities and lifestyles of his clients. In this way, each house has its own very individual personality.

The Guy Hyde Chick house was designed for a gregarious couple and their four sons and daughter. You can feel that personality, both in the house and its seventh owner, Foster Goldstrom. Mr. Goldstrom honestly enjoys sharing his home, proudly pointing out the details that make it so inspiring: floor-to-ceiling sliding glass doors and enormous windows that maximize air circulation and frame the views, thousand-year-old clear-heart redwood paneling, recessed lighting in coved ceilings, perfectly proportioned fireplaces, and the 400-year old oaks that surround the house.

“There is not a negative space in the whole house,” says Goldstrom. “Every room is filled with light, views of the lush gardens, and joy.”

While the house has been blessed with owners who have carefully preserved the integrity of its original design, it has also been blessed by nature itself. When the 1989 Oakland Hills fire roared down the canyon toward the house, it burned everything in its path, including the home’s garden and sheds. But it left the house completely intact. Was Maybeck so in tune with its surroundings that he sited it out of the direct path of danger? Such luck defies logic, but Goldstrom and the architectural community are grateful for it.

Changing Hands

Maybeck homes don’t change hands frequently. When a house is made expressly for you, it’s hard to leave. But when a Maybeck home does go on the market, it seems as if it chooses its new owner—someone whose personality or needs complement those of the people the home was originally built for.

Perhaps it was not a complete coincidence that shortly after touring the Guy Hyde Chick House, The Grubb Company was asked to list one of Maybeck’s most unusual homes, the Kennedy-Nixon house, also known as the Maybeck Recital Hall, on the north side of Berkeley.

The Kennedy-Nixon house has had only three owners. The Nixon family built it in 1914 as a live-in studio for their daughter’s piano teacher, Mrs. Alma Kennedy. It was designed to include a recital hall, a waiting area for students’ parents, a reception room with a small kitchen and an upstairs sleeping quarters. The recital hall, with its cathedral windows and clear-heart unfinished redwood paneling became well-known for its pristine acoustics.

When Ms. Nixon herself became a piano teacher, she built a small house adjacent to the recital studio and connected the two buildings by a second floor bridge. When Ms. Nixon died in 1980, jazz pianist Dick Whittington purchased the property with the intent of creating a commercial concert venue. Over the next 15 years Concord Records recorded 42 solo piano recitals and 10 jazz duets in the Maybeck Recital Hall.

In 1996, Gregory Moore, a young music composer, was looking for a house to buy in Berkeley, following a serious car accident that left him reassessing his life. After viewing several homes and finding nothing appropriate, he was just leaving his realtor’s office to return to his home in Los Angeles when the phone rang. Dick Whittington was putting the Kennedy-Nixon house on the market.

There was no question that this house was made for Moore. It provided the perfect place for him to begin his career as a composer. The recital hall also had over a year’s worth of concert bookings , which would introduce him to musicians from around the country who came to Berkeley to play.

In the 15 years he has lived there, Moore has composed and hosted recitals and musicians in residence. He has also become a Maybeck expert, reproducing the Maybeck-designed furniture that was taken out of the house and discovering the architect’s signature details, such as the dragon in every building he designed (a decorative cap to a gutter in this house) and the “A” hidden discretely as a tribute to his wife Annie. He has developed a relationship with the house he never could have imagined was possible.

“I believe that the house tells you about living in it,” claims Moore, “such as the way the sun moves through the house throughout the day, encouraging me to move with it. After awhile I realized that without thinking about it, I started each day in the kitchen, moved to the living room and ended up in the Recital Hall at the west end of the house. Even after 15 years, there are things I learn about the house that surprise me.”

Moore is moving on to the next chapter in his career but hopes he can pass on the home to someone who has the same reverence for what Maybeck created here. He believes the property will sell itself but understands the importance of good representation.

“When someone owns a documented Maybeck home,” says historian Mark Wilson, “it’s like owning a really important piece of artwork. Selling it requires someone who appreciates its historical significance and has the ability and integrity to ensure that all documentation is intact. The Grubb Company has the best standards and qualifications in the East Bay for this kind of sale.”

Angela Grubb, who will be representing Mr. Moore, sees this opportunity as an honor. “What better way to celebrate Maybeck’s 150^th anniversary than to help one of his homes find its new owner.”

A Place in History

Bernard Maybeck designed countless structures over his long career including San Francisco’s Palace of Fine Arts. Of the 185 constructed, 160 have survived. Because of the significant influence he had on both his contemporaries and future generations of architects, in California as well as across the nation, Mark Wilson has proposed that he be inducted into the California Hall of Fame. You can add strength to that process by nominating him at www.californiamuseum.org/exhibits/halloffame.

To learn more about Bernard Maybeck and his works, look for one of these books:

Bernard Maybeck Architect of Elegance, by Mark A. Wilson, 2011

Bernard Maybeck: Visionary Architect, by Sally Byrne Woodbridge, 2006

Bernard Maybeck. Artisan, Architect, Artist by Kenneth H. Cardwell, 1996

 

 

At a celebratory breakfast and awards ceremony hosted by The Grubb Company last week, D.J. Grubb and John Karnay congratulated 80 personnel, 65 agents and 15 staff members, for what was accomplished in 2011. Despite the economy, it was a growth year for the company.

“The Grubb Company is now 47 years old, and yet we’re the young company in the business,” said Grubb in his opening remarks.
“Though it’s been a tough few years for the industry, together we have outperformed the market.” echoed Karnay.

The celebration culminated with an awards ceremony honoring the company’s Top Producers in 2011, and the announcement that Bebe McRae of North Berkeley was the top realtor for the entire company.

“She’s a remarkable person,” said Grubb during the presentation. “She has stamina and drive to lead our company, and the gift to us all is that she is a lovely human being.”

After receiving gifts from Grubb and Karnay, including the opportunity to donate $1,000 to any charity of her choosing, McRae announced to her colleagues that she would be directing her donation to the Berkeley Food and Housing Project. (www.bfhp.org)

Grubb and Karnay also presented awards to other producers, including: Grubb Company real estate agents Anian Pettit Tunney, Dana Cohen, and Mindy Scott; and top producing loan representatives from La Salle Financial Services, an affiliate of the company. For that part of the ceremony, Grubb and Karnay celebrated Dianne Crosby as the top producer of mortgage and the team of Susan and Brady Thomas.

After all the awards were presented, Grubb shared some thoughts about his company, and how it has remained independent and local, while most other major players have joined national brands. He also commented on how technology has impacted the business.

“The internet has not changed the industry,” he said, “It has just created a world full of informed buyers. Even so, buyers are starving for opportunities to take action.” He also said that Realtors are more important in the transaction of properties than ever, and that the Grubb Company has a distinct advantage, because it has remained so involved in the communities- Berkeley, Oakland and Piedmont- that it serves.

Following the celebration, Tunney announced that she would be directing her $1,000 donation to George Mark Children’s House; Scott said hers would be directed to First Place for Youth; and Cohen her $1,000 donation would go to the Center for Young Entrepreneurs at Hass (YEAH).

The Grubb Company is proud of its philanthropy in the area, and has been generous through the years with a number of Berkeley non-profit organizations, including: Berkeley Public Library, Berkeley Symphony, Aurora Theatre, and the Berkeley Public Education Foundation.

“After being in business here for 47 years, I find The Grubb Company’s closeness to the community as unique and something that inspires us,” said Grubb.

Update 08/05/2011

Below, you will find updated information from my last posting as to how the Private Sewer Lateral (PSL) will be implemented by East Bay Municipal Utility District (EBMUD).  All new information is in bold italics.  All of municipalities affected by this new ordinance will enforce it the same way.

 Phase In Dates

• Piedmont – August 22, 2011
• Emeryville – August 22, 2011
• Kensington, El Cerrito and Richmond Annex – October 17, 2011
• Oakland – January 16, 2012

 

 The Inspection and Repair Process

• The simplest preliminary inspection will be to hire a plumbing contractor to perform a video inspection of the PSL.
• If your PSL requires repair, your contractor will apply for a Sewer Lateral Repair Permit from the appropriate municipality.
• Once all repairs are completed, a city inspector will perform a preliminary inspection of the work.
• Either the homeowner or the plumbing contractor can then schedule an inspection by EBMUD and pay the $150 inspection fee.  Scheduling of the inspection and payment of the inspection fee can either be done online at http://www.eastbaypsl.com/, or at an EBMUD office.
• The plumbing contractor must be on site to actually perform the pressure test.  An EBMUD inspector will observe the test to confirm that the PSL holds pressure and is in compliance.
• Once EBMUD approves the Sewer Lateral, the plumbing contractor can get a final sign off of the city permit.
• The homeowner can then printout the Certificate of Compliance from the EBMUD website.

 

 The Escrow Process

• Hire a Licensed Plumbing Contractor to carry out the PSL inspection per the local municipality’s requirements. 
• Responsibility for repairs can be negotiated between the Buyer and Seller. 
• If the repairs cannot be completed prior to Close of Escrow, apply to EBMUD for a 180 day Temporary Waiver and pay the $150 fee.
• Current Compliance status for a property or application for a Temporary Compliance Waiver can be done online at http://www.eastbaypsl.com/
• The waiver can then be given to the escrow officer to file with your transaction.
• A $4500 deposit must be given in Escrow to secure the Temporary Waiver.
• The responsibility for repairs and the Temporary Waiver Deposit can be negotiated between Buyer and Seller.
• The Waiver form will also designate who will receive the Waiver Deposit after repairs are completed and signed off by EBMUD.
• All repairs must be completed within 180 days of Close of Escrow or the $4500 deposit will be forfeit and the Homeowner will be forced to bring the PSL into compliance.  However, EBMUD is not saying at this time how they will enforce compliance.

 

Unfortunately, not all modules are working on the EBMUD website.  They promise to have them all functioning correctly by August 22^nd.

EAST BAY MUD SEWER LATERAL COMPLIANCE – John Karnay

History

We now have a new Point of Sale Ordinance that will affect all properties sold in the East Bay Municipal Utility District’s service area.  By the end of this year, all communities serviced by EBMUD will have a Private Sewer Lateral Ordinance phased in, requiring homeowners to repair or replace leaking sewer laterals when certain actions trigger the requirement for compliance.

The Environmental Protection Agency has determined that leaking Private Sewer Laterals (PSL’s) are one of, if not the largest single point source of pollution affecting San Francisco Bay.  (You may be wondering how this occurs.  If so, please read on.  If this is more information than you really want about sewage and pollution, just skip to the next paragraph.  I understand.) How this occurs is somewhat counter-intuitive.  It is not because of sewage seeping out of a broken PSL, but rather rainwater flowing into the PSL during the rainy season.  As the ground becomes saturated with water during the winter rains, the broken PSL function like a French Drain absorbing water from the surrounding soil.  The massive inflow of water into the sanitary sewer system inundates our sewage treatment plants with significantly greater volume than they have the capacity to process.  The result; massive discharges of partially treated sewage into the Bay.  As a result of this research, the EPA filed suit against EBMUD, compelling them to enact a Sewer Lateral Compliance ordinance similar to those already in effect in the cities of Berkeley and Alameda.

Phase In Dates

• Piedmont – August 22, 2011
• Emeryville – August 22, 2011
• Kensington, El Cerrito and Richmond Annex – October 17, 2011
• Oakland – December 19, 2011

Main Points of the New Ordinance

• It will be phased in during 2011 and will apply to transactions incepted on or after the phase in date for each Municipality.
• The new ordinance applies to all residential, commercial and industrial properties.
• Home Owners Associations of Condominium complexes will be required to be in compliance by July of 2021.
• It will be triggered by sale or transfer, by applying for a building permit of $100,000 or more in value, or by either increasing or decreasing the size of your water meter.
• Air Pressure or Water Exfiltration methods are the only acceptable methods for testing if you are applying for a Compliance Certificate of an existing sewer lateral.
• If you provide EBMUD with evidence that your current sewer lateral is new or has been replaced less than 10 years ago and prior to August 2011, you can apply for an Exemption Certificate.
• A Compliance Certificate obtained for REPLACEMENT after your municipality’s phase in date will be good for 20 years.  If you only repair or your existing sewer lateral passes the test, the Compliance Certificate will be good for 7 years.

The Escrow Process

• Hire a Licensed Plumbing Contractor to carry out the PSL inspection per the local municipality’s requirements.
• Responsibility for repairs can be negotiated between the Buyer and Seller.
• If the repairs cannot be completed prior to Close of Escrow, apply to EBMUD for a 180 day Temporary Waiver and pay the $150 fee.
• Current Compliance status for a property or application for a Temporary Compliance Waiver can be done online at www.eastbaypsl.com.
• The waiver can then be given to the escrow officer to file with your transaction.
• A $4500 deposit must be given in Escrow to secure the Temporary Waiver.
• All repairs must be completed within 180 days of Close of Escrow or the $4500 deposit will be forfeit and the Homeowner will be forced to bring the PSL into compliance.

Acouple of points are still unknown, but should be settled by the time the ordinance actually goes into effect.  The first question regards the inspection process.  While the types of inspections required to certify a PSL are clear, we do not yet know if a City official must be present during the inspection as is required in the City of Alameda.  The second question is whether the ordinance will allow negotiation between the Buyer and the Seller over responsibility for the $4500 Temporary Waiver deposit.  I assume that this will be allowed just as it is in the Berkeley ordinance.

The Cities of Emeryville and Piedmont will have public meetings to announce the implementation of this new ordinance on August 3^rd and 4^th respectively.  I will be attending both meeting to determine if there are any changes or nuances of implementation specific to each city.  If there are any substantive changes, I will issue an update.

By John Karnay

What I find most fascinating about each economic recession I have seen since I entered the Real Estate profession, is that Buyers face the same gut wrenching decisions in deciding whether or not to purchase a home at the present time.  Common sense dictates that you do not try to catch a falling knife.  Good advice in the kitchen, but does that translate to the Real Estate market?  Not necessarily.  In purchasing a home, price may not be the only consideration.  Prices, interest rates and your monthly income are all intimately intertwined in the affordability equation.

A couple of weeks ago, I asked Dianne Crosby, a Mortgage Loan Originator from LaSalle Financial, to be a time traveling home Buyer.  What I have seen over the years is that Buyers remain hesitant to purchase until either prices begin to spike upward again, or interest rates begin to move up or both.  So I asked Dianne to evaluate the all of the variables associated with affordability in the purchase of the same theoretical home 5 years ago, today and 5 years in the future.  Here is what she came up with:

The Cost to Buy vs. The Cost to Keep

The mathematical reality behind a double dip recession

Home Values and Interest Rates

What if I buy a home and the value goes down?

What if I do not buy and rates go up?

Let’s take three home buyers and do some time traveling.

For each scenario:  25% down, 1.3% tax rate, $225/month insurance

Buyer in the Past  – Bought at the Peak

June 2006 – the peak of the real estate market.

$1,500,000 home

1,125,000 30 year fixed, 6.75% rate

PITI: $  9,172/month

Income Required:  $268,500 per year if no other debt

Buyer in the Present – Ready to Own

June 2011 – Values are down, rates too

Same Home, now costs $1,350,000 (10% less than in 2006)

5.25% rate “Jumbo” 30 fixed

$1,012,500 loan

PITI:  $7,279

Income Required:  $213,044 (same house, 21% less income)

Buyer in the Future – Waited for the next 10% dip in prices

June 2016 – another 10% dip,  but rates are up

$1,215,000 home (10% less than 2011)

$911,250 loan (same 25% down payment)

7.5% rate (based roughly on 1992-2000 average)

PITI:  $6,372 per month

Income Required:  $231,571 per year (same house, 10% more income)

What happened to our 2011 Buyer with $213,044 annual income?

At 7.5% rate:  Can only buy $1,000,000 home, $800,000 loan

Rate needed to buy a home for $1,213,000?:  6%

Which buyer would you rather be?

Moral of the Story

Human nature seems to be, in all investments, buy low and sell high.  Whether the stock market or the Real Estate market, we all hope to time the market perfectly to maximize our profits.  Unfortunately, we always seem to find the top or the bottom of any market by looking over our shoulder and realizing that perfect timing point occurred several months in the past.  In other words, 20-20 hindsight.  It is impossible for any of us to predict the future.  In retrospect, our market area saw a firming of prices in 2010, rising a little more than 4% over 2009.  Will we see a “double dip recession” at the end of this year?  Who knows for sure?  I am convinced that at some point in the relatively near future, the Federal Reserve will be forced to raise the interest rates.  As we saw in the example of the buyer in year 2016, even if prices decline an additional 10% from today, a rise in interest rates to the long term average rate of 7.5% will require a significant increase in income just to qualify for the loan on the same home you can purchase today.  Therefore, waiting to purchase until prices actually bottom might seem sensible from a buy low-sell high strategy, but you may be buying less of a house.

Unlike choosing the right stock or mutual fund for your portfolio, the decision to buy a home in not entirely a quantitative exercise of price, loan qualification and monthly carrying costs.  There is a large qualitative aspect to the purchase as well.  This is where you will live, shelter your family and become a part of the community.  If you have made the decision to purchase a home today, be comfortable in that decision.  And by all means, purchase the right home that meets all of your needs and will continue to do so for many years to come.  I have never recommended purchasing a home just to get into the market and then move on to the next house in a couple of years.  Your purchase should have a time horizon of at least 7-10 years.  As in all investments, leave the short term purchases to the day traders or house flippers on your local cable channel.  Your purchase of a home should never be a quick sprint to riches, but rather a long marathon to build equity while growing your family.