The California Realtors Association recently reported that California’s home sales were up in February this year by 5.4 over the same time last year. The Central Valley market has fared a bit better despite a lack in inventory.

According to CAR, the sales of existing, single-family detached homes in the state was at an annualized rate of 422,910 in February. That number represents what the total number of homes sold for all of 2018 if rates match what was sold in February.

“February’s solid market performance was likely fueled by rising interest rates, which motivated buyers to rush in and close escrow before rates move even higher as they’re anticipated to do in the coming months,” said Steve White, president of CAR, in a statement. “Despite losing ground in January, February’s strong sales gain more than covered the loss, resulting in a 1.1 percent increase so far this year.”

Sales of existing, single-family homes in the Central Valley were up 6.3 percent year-over-year. The San Francisco Bay Area saw the greatest gains with a 7.1 percent increase over February 2017.

Although newer homes continue to be built in the Central Valley region, industry experts have reported a lack of existing inventory, which can lead to more demand and higher prices.

“Home prices across the state continued to grow in general, especially in the Bay Area region, where seven of nine counties posted double-digit annual increases and five of nine counties surpassed their previous peak prices,” said Leslie Appleton-Young, CAR senior vice president and chief economist. “What’s more, with single family home prices rising rapidly out of reach, buyers increasingly turned to condominiums, which pushed the median price of condominiums to a new record high.”

A recent report has shown home prices throughout the Central Valley to be up over the same time last year, but those prices might be coming down.

In its December 2017 data report, CoreLogic, an analytics and data provider, stated that home prices nationally were up 6.6 percent in December over the same time in 2016.

Locally, home prices in Stockton-Lodi and Modesto were also up. In Stockton-Lodi, prices increased by 7.8 percent year-over-year. In Modesto, prices were up 9.1 percent year-over-year. Those prices include distressed sales.

From November 2017 to December 2017, prices increased by 0.5 percent in Stockton-Lodi and decreased 0.4 percent in Modesto.

“Home prices continue to rise as a result of aggressive monetary policy, the economic and jobs recovery and a lack of housing stock. The largest price gains during 2017 were in five Western states: California, Idaho, Nevada, Utah and Washington,” said Frank Martell, president and CEO of CoreLogic in a press release. “As home prices and the cost of originating loans rise, affordability continues to erode, making it more challenging for both first-time buyers and moderate-income families to buy. At this point, we estimate that more than one-third of the 100 largest metropolitan areas are overvalued.”

Thirty-five percent of the metropolitan areas with the overvalued housing markets have prices that are 10 percent above a long-run sustainable level, CoreLogic reports.

“The number of homes for sale has remained very low,” said Dr. Frank Nothaft, chief economist for CoreLogic. “Job growth lowered the unemployment rate to 4.1 percent by year’s end, the lowest level in 17 years. Rising income and consumer confidence has increased the number of prospective homebuyers. The net result of rising demand and limited for-sale inventory is a continued appreciation in home prices.”

Twenty-seventeen has proven to be yet another exciting year in technology.

We’ve seen Google’s artificial intelligence create its own ‘AI child,’ which outperforms those created by humans, growth of blockchain, rapid advancements in quantum computing, flying cars and expanded use of the precise gene editing technique CRISPR/Cas-9.

Scientists are even beginning to develop potential roadmaps to reverse aging.

As we close out the year and look forward to 2018, let’s take a moment to see which upcoming technology trends will be the most impactful for the Central Valley.
On a side note, isn’t it interesting that as collective human knowledge grows exponentially, individual humans appear to be less capable? Some of us are losing the ability to read maps, spell correctly and do arithmetic in our heads. As voice-enabled smart devices evolve into wearables and then implantables, some people may find literacy to be unnecessary in a few years.

Back to 2018 tech trends.

Safe-driving vehicles, not self-driving vehicles
Despite all the attention that Tesla and the GM/Cruise Automation combo have been getting, Level 5 fully-autonomous vehicles are still several years away. 2018, however, will see the launch of collision avoidance, automatic braking and lane monitoring technologies from most major vehicle manufacturers.

Besides saving lives and reducing injuries, the elimination of fender-benders will eventually drastically lower our auto insurance premiums. Delivery fleets are now testing these same features, and semi-trucks may well be the application that pushes the pace for adoption of fully autonomous vehicles in the Central Valley.

Agtech hits its stride
Agriculture and construction are two of the last large industries yet to be disrupted by advanced software. Progress has been slow in these sectors, but momentum is now accelerating in agtech. John Deere’s $305 million acquisition of Blue River Technologies has lit a fire under venture firms to investigate opportunities and make investments in this space. We are still a few years away from viable protein reactors that literally produce food out of thin air or lab-grown meat (our grandkids will surely find it barbaric that we had to actually kill animals for meat), but many agtech companies are already being funded to improve yields and reduce pesticide use through intelligent software.

Ceres Imaging (ceresimaging.net), an Oakland-based VC-funded company is led by agricultural and technology professionals including agronomists, hydrologists, and remote sensing experts. The company’s products, which include agronomic insights through aerial spectral imagery, proprietary sensors and analytics, and artificial intelligence software is already being used to help local almond farmers optimize nut harvests and profits.

Local software and digital marketing talent expands 
The next generation of agtech won’t drive productivity gains solely from mechanization as in the past. Instead this new generation will leverage state-of-the-art machine learning and artificial intelligence software. Fortunately, as I mentioned in a previous column, Stanislaus County has established itself as a software development hub, with local companies employing over 1,000 programmers. Several initiatives will further accelerate growth of the county’s software talent pool and even expand it into the Stockton area.

• Valley Hackathon (valleyhackathon.com) a fast-growing programming contest that highlights local programmers continues to expand and draw coders into the tech community. The next event will be held at Modesto’s ValleyWorx (valleyworx.com) tech and digital design co-working space on January 26 and 27.
• ValleyWorx now hosts a rapidly expanding coding meetup every Wednesday from 3-8 p.m. The collaboration with Free Code Camp is providing an easy entry point for developers to accelerate their growth.
• Bay Valley Tech’s (bayvalleytech.com) coding camps and advanced software development classes taught by professional programmers will also grow the local talent pool.
• In 2018, Bay Valley Foundation (bayvalleyfoundation.com) will begin raising money for a technology scholarship fund to provide tuition assistance to Central Valley students seeking careers in software development.
• The Entrepreneur Lab, based in downtown Stockton’s Huddle co-working space, is a 21-week, intensive incubation program which cultivates high-growth startups.

In addition to software, the Central Valley’s digital design and marketing capabilities are also expanding rapidly.

Final Cut Media (finalcutmedia.com) saw their business and headcount triple in the last year alone. As experts in marketing strategy, design and digital video creation, they help leading brands such as Bay Area-based Fit Republic Health Clubs successfully plan and execute integrated, digital-focused marketing campaigns. Final Cut is also a trusted advisor to large organizations like Stanislaus County, developing digital/social communications strategies for their human resources and recruiting teams.

Mike Daniel, Partner and Chief Marketing Officer at Final Cut, advises companies to build a solid digital content/distribution strategy and then leverage data to create an effective lead funnel. Final Cut’s success is further driving rapid tech and digital marketing growth in the Valley.

Expanding Bay Area companies bring more high-paying tech jobs
Bay Area technology firms winning in the global marketplace have created tremendous wealth in the form of profits, salaries and stock options. The resulting competition for tech workers and housing have raised salaries but diminished affordable housing in the San Francisco/San Jose region.

Some communities now require an annual income of $218,000 to qualify for a median-priced home.

Tech firms looking for relief have traditionally expanded out of state to destinations such as Denver, Austin and Seattle. The recent surge in Central Valley software talent, however, is beginning to catch the attention of Bay Area companies.

The Modesto/Stockton area now has both affordable housing and tech talent, making the region an attractive option for Bay Area companies who want to keep satellite offices closer to home.

American Medical Response, Novo Technologies and Oportun have all been expanding and hiring software professionals in their Modesto offices. Recently, Varsity Technologies (varsitytechnologies.com), a San Francisco-based company providing outsourced IT services to organizations that want to make a difference (non-profits, schools and healthcare organizations) opened a second office in Modesto within the ValleyWorx tech co-working space.

Local businesses and techies are thrilled to have Varsity bring their expertise and jobs to our community and are confident more Bay Area companies will see the value of investing in our region and our people in 2018.