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Stability, Strategy, and a Smarter Market After years of volatility, the Bay Area real estate market is entering a new phase. Not a boom. Not a crash. A recalibration. For buyers and sellers willing to think strategically, 2026 may be one of the most opportunity-rich years of the decade  — not because prices are exploding, but because decision-making clarity is returning. Market Insights: The Big Picture The Bay Area is no longer one market — it’s a collection of micro-markets moving at different speeds. Key expectations for 2026: Modest price growth or stabilization across most regions Slightly improved inventory as the lock-in effect fades Reduced bidding wars — but strong competition for well-positioned homes Continued strength near job centers and top school districts This is a market that rewards precision over prediction . Buyers: Opportunity Without Chaos Buyers who sat out during the peak years may find 2026 more navigable. What’s different: More listings to choose from Less emotional competition Greater ability to negotiate terms, repairs, and timing The advantage will go to buyers who are financially prepared and decisive — not reactive. Sellers: Strategy Replaces Frenzy While sellers won’t see the explosive price jumps of past years, well-presented homes will still command attention . Winning sellers in 2026 will focus on: Accurate pricing from day one Strong visual presentation and storytelling Understanding buyer psychology, not just comps Homes that feel “easy” to buy will outperform those that feel risky. Why Stability Drives Action Uncertainty causes paralysis. Stability creates confidence. When buyers and sellers understand the rules of the game, they move forward — and 2026 is shaping up to be a year where clarity returns. Success Story: Overcoming Timing Anxiety A Peninsula homeowner delayed selling through multiple market cycles, worried about missing the “top.” In a stabilizing market, we shifted the focus from timing to positioning — aligning price, presentation, and buyer outreach. Result:  A clean sale, strong value retention, and a smooth transition without market stress. Hooks That Matter Stability is not stagnation — it’s leverage. The next wave of opportunity won’t be loud. It will be strategic. Those who prepare early win quietly. If you’re considering a move in 2026 — buying, selling, or simply understanding your equity position — the smartest first step is clarity. Let’s build a personalized 2026 market strategy for your neighborhood and goals — before the rest of the market catches up.

A Smarter, Tax-Efficient Exit Strategy for High-Equity Property Owners When selling a property, most owners assume the only option is a lump-sum payout — followed by a significant tax bill. For sellers with decades of appreciation, that approach can quietly destroy long-term wealth. A structured sale , also known as a structured installment sale , offers an alternative designed for sellers who value certainty, income planning, and tax efficiency . What Is a Structured Sale? A structured sale allows a seller to receive proceeds over time rather than all at closing. It combines seller financing with professionally managed payment structures — often through annuity-backed obligations — resulting in predictable income and deferred taxation. Unlike traditional seller carrybacks, the seller is not acting as the lender  and does not manage payments or default risk . How a Structured Sale Works The seller agrees to receive payments over time instead of a lump sum A third-party assignment company purchases the buyer’s obligation Payments are issued to the seller on a fixed schedule (monthly, quarterly, or annual) Capital gains taxes are recognized only as payments are received The buyer benefits from reduced upfront cash and flexible financing terms Why Sellers Use Structured Sales 1. Installment-Based Capital Gains Only the portion received each year is taxed, helping sellers: Stay in lower tax brackets Manage long-term tax exposure Preserve after-tax wealth 2. Predictable, Guaranteed Income Payments are backed by highly rated financial institutions — not buyer performance. 3. Reduced Risk & Zero Management Sellers avoid servicing loans, tracking payments, or dealing with defaults. 4. Flexible Payout Structures Structured sales can be tailored for: Retirement income Lifestyle planning Legacy and estate strategies Long-term income smoothing Funding future investments Why Buyers Like Structured Sales Lower upfront cash requirements More flexible underwriting Potentially better pricing Reduced reliance on traditional lenders Market Insight In a market defined by high interest rates and limited inventory, structured sales have become a quiet advantage . They often shorten time on market for complex properties — including land, luxury homes, and development sites — by expanding the buyer pool while protecting the seller. Why This Strategy Resonates Structured sales appeal to both logic and emotion: Control  over timing and income Certainty  through guaranteed payments Tax efficiency  without aggressive tactics Imagine converting your property into a reliable income stream while legally reducing your tax exposure. That’s the strategic edge of a structured sale. Overcoming the Capital Gains Cliff A Gilroy landowner faced a significant tax burden after decades of appreciation. Selling outright would have triggered top-bracket capital gains and eliminated retirement stability. We structured the sale over 15 years through an assignment company, transforming equity into predictable income, lowering annual tax exposure, and removing buyer-default risk. Outcome: Higher after-tax retention Guaranteed income stream Reduced financial volatility

The Hook Most People Miss The Bay Area housing market didn’t cool evenly. It split . What’s happening right now is not a correction—it’s a reallocation of power . Certain counties are accelerating as if rates don’t exist, while others are quietly shifting into negotiation territory for the first time in years. Same region. Same interest rates. Completely different outcomes. If you’re buying, selling, or investing into late 2025, this distinction matters more than timing the Fed ever will. Two Stories Are Playing Out at the Same Time Story #1 — The AI Gravity Markets (San Francisco · San Mateo · Santa Clara) These areas are operating under a different economic logic. AI hiring, capital concentration, and return-to-office momentum are creating localized demand shocks —especially for single-family homes near employment centers and top schools This is where: Inventory is shrinking Homes are moving fast Sellers still hold leverage Buyers are paying for certainty, not discounts Story #2 — The Negotiation Markets (Alameda · Contra Costa · Marin · Sonoma · Napa · Solano) This is where the market finally resembles something rational: Inventory is up Days on market are stretching Credits and price reductions are back Buyers can think instead of react The opportunity here isn’t hype—it’s positioning . Santa Clara County: Still the Alpha Market Santa Clara remains the epicenter of Bay Area housing velocity. Single-family homes are still selling above asking, with median pricing hovering in the $1.4M–$1.6M+ range depending on pocket. The luxury segment is where things get extreme. Homes over $4M in Los Altos, Palo Alto, and Los Gatos are going pending in single-digit days. That sounds unreal—until you follow where AI capital is landing. Multiple recent sales closed $1M+ over asking  in under two weeks. This isn’t emotional buying—it’s strategic capital deployment by founders, early employees, and executives with liquidity. Neural trigger:  Scarcity + status + proximity = urgency. For traditional buyers without existing Bay Area equity, this market is unforgiving. Precision matters. Representation matters more. San Mateo County: Blue-Chip Real Estate Behavior San Mateo remains one of the most resilient counties in the region. Median pricing sits around ~$2M for single-family homes, and premium corridors like Hillsborough and Menlo Park continue to defy broader slowdowns. Why? Location between SF and Silicon Valley Elite schools Commute efficiency Long-term scarcity This is where capital parks when uncertainty rises. San Mateo doesn’t spike dramatically—but it almost never gives back ground. San Francisco: The Quiet Comeback San Francisco is doing something it hasn’t done since pre-COVID—it’s absorbing inventory fast. Single-family homes in desirable neighborhoods are operating at near one month of supply . Many are selling 5%+ over list with short decision windows. Meanwhile, rents are climbing again, driven by AI hiring and renewed office leasing. 1-bedroom rents are tracking north of $3,100 and rising. People who left in 2021 are coming back—not emotionally, but economically. SF now looks “cheap” relative to Silicon Valley suburbs where entry pricing starts much higher. Seller insight:  Clean SFHs priced correctly still command leverage. Buyer insight:  Condos offer opportunity—single-family requires speed. Alameda County: Balance Returns Alameda is where sanity re-enters the conversation. Median pricing sits roughly between $1.05M–$1.2M, with selective strength in areas like Rockridge and North Berkeley. The difference now? Contingencies are back Negotiations are real Buyers aren’t writing blind offers Oakland and inner East Bay remain attractive for buyers priced out of the Peninsula but unwilling to give up access or character. Contra Costa County: The Value Play Contra Costa is quietly one of the most important counties in the Bay right now. Median pricing in the high-$700Ks to low-$800Ks gives buyers: Space Yards Schools Negotiating power Days on market are longer. Credits are back. Investors can actually underwrite deals without pretending appreciation will save them. This is one of the few counties where cash flow still has a chance to pencil . Marin County: Lifestyle Demand, Slower Tempo Marin operates on emotion and intention. Buyers here are relocating for schools, space, and quality of life—not urgency. Inventory remains tight, pricing remains high, but the pace is calmer. If you want Marin, you wait—or you pay. Sonoma & Napa: Buyer Leverage at the High End North Bay finally tilts toward buyers—especially above $2M. Sonoma under $2M stays competitive Sonoma and Napa luxury inventory is sitting Napa is approaching 7 months of supply Buyers securing credits, pricing adjustments, and favorable terms on $2M–$3M lifestyle properties—something unimaginable in Silicon Valley right now. Solano County: The Entry Point Solano is where first-time buyers can still participate meaningfully. Median pricing in the high-$500Ks / low-$600Ks, with some homes selling below list. From an investor perspective, Solano often outperforms on rent-to-price ratios  compared to core tech counties. Where This Leaves the Market Going Into 2025 Buyers Rates have stabilized in the mid-6s Inventory is improving outside AI hubs Condos remain the softest entry Geography matters more than timing Sellers Core tech counties still reward precision Overpricing is punished quickly elsewhere Presentation, strategy, and timing matter again Investors Surgical plays outperform broad bets Cash flow and value-add beat speculation AI adjacency is reshaping demand patterns The Bottom Line The Bay Area isn’t cooling—it’s sorting . And the winners over the next cycle won’t be the ones waiting for rates to change. They’ll be the ones who understand where leverage actually lives .

In Santa Clara County, price movements follow a clear and consistent pattern: tight winter inventory strengthens prices, while increased spring and summer supply can soften them.  Understanding this dynamic allows homeowners and investors to make timing decisions with far more precision — and far better returns. Winter’s Supply Squeeze Creates Pricing Power From December through February, the number of available homes drops to some of the lowest levels of the year. Many sellers hold back until spring, long-time owners remain anchored to their low tax bases and sub-3% mortgage rates, and inventory naturally contracts during the holiday season. At the same time, serious buyers remain active. Relocations, tech hiring cycles, and early-year planning mean that motivated buyers are shopping when very few homes are available. As a result, competition intensifies around the listings that do hit the market. Homes positioned well during this period tend to attract stronger offers, fewer contingencies, and compressed days on market. In short: scarcity fuels demand — and demand fuels price strength. Demand Surges Before Supply Does One of the least understood dynamics in Silicon Valley is that demand ramps up well before sellers begin listing in larger numbers .By February and March, buyer activity accelerates sharply, but supply has not yet caught up. That imbalance generates upward pricing pressure that often sets the tone for the entire year. Price momentum in Santa Clara County doesn’t begin in spring — it begins in winter , when motivated buyers outnumber available homes. When Supply Rises, Pricing Power Shifts By late spring and early summer, the market reaches its seasonal peak in new listings. More homes enter the market, giving buyers more options and diluting the intense focus that earlier listings enjoyed. Even if demand remains steady, supply rising faster than demand weakens the seller’s advantage. This shift typically leads to: Longer days on market More selective buyers More negotiations and concessions Fewer over-asking outcomes Increased sensitivity to pricing and condition Where scarcity amplifies buyer urgency, abundance reduces it. The Inverse Relationship: More Supply → Softer Prices When inventory expands meaningfully, the market transitions from competition-driven to choice-driven. The emotional pressure buyers feel in January and February — “this might be the only option” — fades when ten similar homes appear by May. This inverse relationship between supply and price is especially pronounced in micro-markets like Cupertino, Los Altos, Willow Glen, Morgan Hill, and other high-demand districts where buyers track every listing closely. In those neighborhoods, even modest increases in inventory can change offer behavior overnight. Market Insights Santa Clara County’s winter advantage isn’t a seasonal fluke — it’s structural. Long-term ownership, low interest rates, demographic constraints, and limited buildable land all contribute to chronically tight inventory. When that already-limited supply contracts in winter, pricing leverage strengthens dramatically. If sellers wait for the spring rush, they step directly into a more competitive environment where buyers have more choices and less urgency.

In a region defined by innovation, the smartest financial move isn’t happening in tech — it’s happening in real estate portfolios. The strategy most Silicon Valley homeowners overlook? Reallocating residential equity into commercial and NNN income-producing assets. When you compare the numbers, the shift becomes obvious. Case Study: A Cupertino Home vs. a $4M Industrial Building in San Jose A long-time Cupertino homeowner wanted “safe” income by renting out a $4M home. Once we evaluated the cashflow, it became clear: the house could not compete with commercial performance. Scenario 1: Holding the Cupertino Home as a Rental Market Rent:  $7,500–$8,500/month Annual Gross:  $96,000 Typical Annual Expenses: Property tax: ~$48,000 Maintenance: ~$8,000–$12,000 Insurance: ~$2,800 Vacancy/turnover: ~$4,000–$6,000 Cash Flow: $28,000–$33,000 net per year Net Yield:   0.7%–0.8% Summary:  A $4M home generating ~$2,500 a month in net income — with constant involvement and exposure to maintenance, turnover, and regulation. Scenario 2: Repositioning Into a $4M Industrial Asset (San Jose) We sourced a stabilized small-bay industrial building  occupied by a strong service-based tenant — one of Silicon Valley’s most resilient sectors. Purchase Price:  $4,000,000 Market Cap Rate:  5.25%–6.00% Structure:  NNN (tenant covers taxes, insurance, maintenance) Cash Flow: $210,000–$240,000 net per year Net Yield:   5.25%–6.00% Summary:6–8× more income  than the Cupertino home — with passive management and corporate-backed security. Cash Flow Side-by-Side Asset Value Annual Net Income Yield Hands-On? Cupertino Home $4,000,000 $28K–$33K 0.7%–0.8% Yes San Jose Industrial $4,000,000 $210K–$240K 5.25%–6% No (NNN) Outcome: A commercial building produces the income of six residential rentals  — without the burden of managing six homes. The Transformation Before (Residential): $30K annual net income High operating and management load Limited depreciation benefits After (Commercial/NNN): $220K+ annual net income Zero day-to-day management Corporate-backed lease stability Superior tax benefits This shift wasn’t risky — it was strategic. Why Most Silicon Valley Owners Miss This Opportunity Because most owners assume: “Homes appreciate more.” “Rentals are safe.” “Commercial is complicated.” But today’s data shows: Residential rent growth is flattening Operating costs are rising Appreciation is no longer guaranteed Commercial & NNN provide income first, appreciation second Wealth grows faster when income is stable, predictable, and scalable. Next Week: How This Investor Saved $720,000 in Taxes In our next case-study spotlight, you’ll see how this same client leveraged: A 1031 exchange , Bonus depreciation , and A cost-segregation accelerated depreciation strategy …to offset income and save over $720,000 in taxes . This is where cashflow meets tax efficiency — and where real wealth accelerates.

National Trends vs. the Bay Area Reality: Why Scarcity Is Quietly Driving Demand for “Stale” Listings Across the U.S., the real estate landscape is shifting. National headlines highlight rising inventory, slowing buyer activity, and a sharp increase in delistings. The surface narrative suggests a cooling market — a return to balance after years of extreme competition. However, the Bay Area is playing by a different set of rules. While many markets are experiencing an oversupply of homes and a softening in buyer urgency, our region continues to operate under a familiar dynamic: scarcity.  Limited inventory, high demand in key micro-markets, and rapidly shifting seller psychology are reshaping how properties — especially long-sitting listings — behave. The result? Homes once considered “stale” are seeing new life. Why Scarcity Is Re-Energizing Older Listings In the Bay Area, inventory rarely rises enough to satisfy buyer demand. Even in softer cycles, supply remains structurally constrained by land scarcity, zoning limits, interest-rate-locked sellers, and the high cost of new construction. This imbalance creates an environment where: Listings that previously struggled suddenly attract renewed interest Buyers re-engage with properties they initially overlooked Strategic repositioning outperforms simple price reductions When fewer new homes hit the market, buyer behavior shifts. Properties that have been sitting quietly for weeks — sometimes months — take on a new level of urgency because options tighten. This scarcity-driven urgency is one of the strongest psychological drivers in real estate, often more influential than interest rates or macroeconomic data. We’re currently seeing: Increased showing activity on older listings Buyers revisiting properties they passed on earlier More competitive offers on homes that recently appeared stagnant Greater receptiveness to improved presentation, staging, or refreshed marketing In short: when choice declines, overlooked listings become attractive again. If you're wondering where your property fits into this evolving landscape, my team can break down the data by neighborhood, price segment, and asset type. The National Market Tells a Different Story Outside the Bay Area, the momentum is shifting — but in an entirely different direction. Delistings are up 52% year-over-year ( Realtor.com )  as sellers pull homes off the market rather than make price adjustments. Inventory is growing in many metros, and days on market are increasing. Nearly 1 in 5 homes  nationally now undergo a price reduction. The trend is driven not by a flood of distressed sellers, but by a shift in psychology. Many homeowners are: Anchored to pandemic-era valuations Reluctant to give up 2–3% mortgage rates Emotionally resistant to “losing” money via a price cut More comfortable waiting than negotiating These behavioral patterns matter. They create a widening gap between what sellers want and what buyers are willing to pay. In markets with more abundant supply, that gap leads to stagnation — and ultimately, delistings. This disconnect affects everything from how long homes sit to the concessions required to get deals done. And in some metros, it's creating the most buyer-friendly environment seen in half a decade. Why the Bay Area Is the Exception — Again While the rest of the country is seeing softening due to oversupply and seller hesitation, the Bay Area’s limited inventory flips the narrative. Here, the psychology of scarcity overrides the psychology of delisting. Sellers are less likely to pull their homes , because competition is lower Buyers know they have fewer choices , increasing urgency Properties regain relevance simply because the pipeline stays tight Strategic repositioning can dramatically shift buyer perception Even as interest rates fluctuate and economic sentiment cools, scarcity continues to drive demand — especially for well-located, well-prepared assets. The takeaway? A “stale” listing in the Bay Area is not the same thing as a stale listing nationally. What This Means for You — Whether Buying or Selling For Sellers This is a moment for strategy, not fear. Presentation matters more than ever Pricing must reflect micro-market realities Small adjustments can reignite buyer attention Even older listings can command strong results with the right repositioning Scarcity allows thoughtful sellers to compete — even in a mixed market. For Buyers More options nationwide do not translate to more options locally. However, that perception  can work in your favor. Sellers of older listings may be more negotiable Opportunities exist in properties others initially overlooked Strategic timing can help you secure value before spring momentum returns “Stale” does not mean “problematic” — often it means “mis-timed” Understanding the psychology behind seller decisions gives buyers an advantage. What Happens Next? The narrowing gap between new listings and delistings nationally is a trend worth watching. It will influence: Seasonal inventory levels Buyer urgency Seller pricing power The trajectory of 2025 values But in the Bay Area, supply remains too limited for widespread softening. Expect competitive moments and quiet stretches — a market defined by timing, preparation, and strategic advantage. Scarcity isn’t going away. It’s simply reshaping where the opportunities are. Want to Know How This Affects Your Property or Your Next Move? Whether you're selling, repositioning, investing, or searching for the right asset, we can provide: Micro-market data for your specific neighborhood A tailored analysis of buyer trends in your price segment Recommendations for unlocking overlooked value in older listings Insight into off-market opportunities not visible online If you need it, we can find it — and we can guide you through the strategy behind it. Contact us at: davenportgroup@kw.com | 408.888.7794 Get a tailored strategy for your property, backed by real-time data and actionable insight — not guesswork.

California Housing Reforms Reshaping Real Estate in 2025–2026 California’s newest housing reforms — Senate Bill 79 and Assembly Bill 130 — are poised to accelerate the state’s transition toward higher-density, transit-oriented housing and faster project delivery. For developers, investors, and landowners, these changes redefine opportunity zones and entitlement timelines. The focus is clear: unlock underused parcels and deliver housing faster. Senate Bill 79 — The Abundant & Affordable Homes Near Transit Act Effective July 1, 2026 SB 79 upzones land within one-half mile of major transit stops, allowing for taller, denser, and more flexible multifamily development across California’s urban corridors. The intent is to cluster housing near transit, cut commute emissions, and reduce the pressure on suburban sprawl. Transit-adjacent land is entering a new value tier. Zoning changes are increasing allowable units and height limits while reducing parking requirements — directly impacting acquisition value and long-term yield models. Identify parcels within half a mile of rail or BART stations. Review zoning overlays — parcels previously limited to low-density may now qualify for mid-rise or mixed-use projects. Coordinate early with city planning to secure entitlements before developer demand spikes. Success Story: After earlier up-zoning near the Berryessa BART station, landowners who acted quickly saw double-digit appreciation and increased investor interest before construction even began. SB 79 could create similar ripple effects across key Bay Area and Central Valley corridors. Assembly Bill 130 — CEQA Streamlining for Infill Housing Signed June 30, 2025 – Effective Immediately AB 130 removes many infill housing projects from the long and expensive California Environmental Quality Act (CEQA) process. Projects that meet specific infill and density requirements can now move directly to local approval without triggering full environmental review. By eliminating CEQA delays, developers can save six to eighteen months of entitlement time — reducing hold costs, carrying interest, and legal exposure. This accelerates project timelines, improves IRR, and can dramatically shift acquisition strategy. Re-evaluate infill parcels previously shelved due to CEQA constraints. Model new timelines and profitability under streamlined review. Emphasize “CEQA-exempt” in investor decks and marketing collateral — a powerful differentiator in 2026’s competitive environment. Success Story: A San Jose developer revived a downtown duplex-to-fourplex project previously halted by CEQA litigation. With AB 130 in effect, the project moved from submission to approval in under 90 days, unlocking a 42 percent valuation lift and multiple developer offers. Strategic Takeaways CEQA Streamlining (AB 130) = Faster approvals, lower costs => Now Transit Up-Zoning (SB 79) = Increased land value, higher density potential => July 2026 The state’s direction is unmistakable: density where infrastructure exists and speed where bureaucracy once stalled progress. For investors, this is a moment to align portfolios with the policy curve — not lag behind it. Transit-adjacent parcels and infill opportunities are shifting from passive holdings to active wealth vehicles. Audit your holdings near transit or in designated infill zones. Partner with entitlement consultants now — before competitive demand rises. Re-market qualifying listings as “infill-ready” or “transit-eligible” for maximum buyer attention. Align investment timing with the 2026 policy window for optimal gains. Team Success Story Our team recently repositioned a downtown infill parcel under AB 130’s new framework — reducing entitlement time by nearly a year and achieving a substantial valuation lift. Early action, informed by policy insight, continues to deliver tangible returns. Stay Informed. Stay Ahead. California’s 2025 legislative reforms are changing more than housing — they’re changing where the next wave of real-estate value will be built. Contact our team for a personalized briefing on how SB 79 and AB 130 affect your holdings, contact.

California’s high fire zone rezoning has been evolving for years, but recent legislative changes have rapidly accelerated how these designations affect homeowners, landowners, developers, and investors statewide. With the passage of AB 3074 (2020) and SB 63 (2021), the state made a decisive move toward strengthening wildfire-resilience standards. These reforms laid the foundation for the 2025 Fire Hazard Severity Zone (FHSZ) maps—now the most comprehensive and wide-reaching wildfire-risk maps ever released in California. For the first time, the 2025 maps classify “Moderate” and “High” hazard zones within Local Responsibility Areas (LRAs), which were previously overseen primarily by counties and cities. The result: thousands of additional parcels now fall under wildfire-risk designations that can influence development, insurance availability, due-diligence requirements, and market behavior. Did the 2025 FHSZ update change your property’s zoning without you realizing it? Most owners haven’t checked. Understanding the Rezoning Shift The rezoning update isn’t merely a technical reclassification—it represents a reset of statewide expectations for fire-resilient land use. Local governments must adjust their zoning ordinances to align with the new state maps, which means more parcels will now trigger: Enhanced building standards Fire-resistant construction materials Expanded defensible-space compliance Additional mitigation or engineering requirements for hillside, rural, and wildlife-interface areas Greater insurance scrutiny and revised underwriting criteria This shift is reshaping how residential and land assets are evaluated, purchased, marketed, and financed. Properties once considered straightforward may now require additional inspections, documentation, or modifications before moving through escrow or development review. Market Insights The 2025 fire-zone update is widening the gap between parcels with smooth development or resale pathways and those needing advanced mitigation. Newly labeled Moderate or High hazard zones may see appraisal adjustments, extended timelines, or heightened buyer questions. Increasingly, buyers are prioritizing: Resilience factors (water availability, secondary access, ingress/egress) Ease of meeting defensible-space compliance Proximity to services and emergency resources Clear documentation demonstrating mitigation work already completed Risk-adjusted pricing is becoming more common in land transactions, and listings that proactively address fire-zone requirements are gaining a competitive edge. Wildfire zoning has evolved from a line in a disclosure to a genuine market force. Fire-zone designations don’t reduce value—they reveal where resilience creates opportunity. Turning Rezoning Into Opportunity: A Real Success Story A South County landowner recently discovered their parcel had been elevated into the newly defined “Moderate Hazard” category under the 2025 mapping system. Rather than risk confusion or buyer hesitation, we conducted a full zoning and code-impact review, identified required mitigation measures, and packaged these findings into a transparent, buyer-ready disclosure packet. The result: the buyer continued with confidence, the valuation remained intact, and the property closed smoothly. This experience demonstrated how proactive preparation consistently outperforms panic—especially in a regulatory environment that evolves faster than many property owners realize. How to Check Your Fire Hazard Zone California provides a simple public tool for checking the new designations: Visit:   https://myhazards.caloes.ca.gov/ Enter any address to view its classification under the 2025 Fire Hazard Severity Zone map. This two-minute step is now essential for buyers, sellers, developers, and long-term land stewards evaluating their next move. Why This Matters for Your Asset Strategy The latest rezoning changes directly influence: Buildability Insurance options and premiums Entitlement pathways Marketing strategy Buyer confidence and due-diligence requirements Appraisal and lender reviews Understanding your fire-zone designation is no longer optional—it’s a core part of asset valuation and risk management across the state. What You Should Do Next If your property—or a parcel you’re evaluating—may be affected by the 2025 FHSZ rezoning, you can strengthen your position by taking the following steps: Request a parcel-specific fire-zone audit Review required building, vegetation, access, and slope-related mitigation Evaluate how your designation affects resale, development potential, and appraisal performance Prepare the documentation buyers now expect before they make an offer Address mitigation proactively to protect value and avoid deal friction The earlier you prepare, the more leverage you retain in negotiations—whether you’re evaluating a purchase, preparing to sell, or planning new development.

Don’t leave 20–25% of your property’s value on the table. If your property has deferred maintenance — aging systems, outdated finishes, or visible wear — selling “as is” may seem faster, but it can cost you significantly. In today’s market, buyers factor repair risk into their offers, often discounting by 20–25% or more. Deferred maintenance also limits financing options and reduces buyer competition, resulting in lower offers and slower closings. Bring Our Team In Early — Get the Most for Your Asset Before listing, strategic preparation  can make all the difference. Our team helps you protect your equity, attract stronger offers, and position your property to appeal to both retail buyers  and professional, liquid investors  ready to close quickly. Here’s how we do it: Pre-Sale Property Audit:  Identify the highest-ROI improvements — roof, paint, flooring, fixtures — that increase buyer confidence and overall property appeal. Strategic Repairs:  Focus on what buyers notice first — curb appeal, entry, and major systems — to remove early objections and inspection risks. Flexible “As-Is” Pricing:  If you prefer not to renovate, we’ll strategically market your property to professional and liquid buyers  seeking value-add opportunities. Vendor Coordination:  From contractors to inspections and disclosures, our team manages every step to ensure compliance, clarity, and a smooth closing. The new visa fee reframes buyer and homeowner psychology: fewer new arrivals mean greater focus on property quality, stability, and location. Use this moment to educate your audience that real estate remains the most reliable inflation hedge — especially when stock volatility and policy changes dominate the headlines. Case Study: Cupertino Single-Family Home A long-term rental property in Cupertino required substantial updates before listing. With a focused 45-day pre-sale improvement plan — including interior paint, new flooring, lighting, and exterior enhancements — the property generated multiple offers and sold for $620,000 above its original “as-is” market estimate. We also guided another seller through a San Jose property transformation that began as a long-term rental in need of attention. Originally priced just above $300,000, the home underwent a focused 28-day improvement plan addressing key cosmetic and functional updates. The result: multiple competitive offers and a swift closing, yielding a net profit of $260,000 . A strong example of how disciplined preparation and strategic timing can turn deferred maintenance into measurable equity gains. Real Results, Not Guesswork Our listings that completed targeted pre-sale improvements averaged 18–25% higher net proceeds  than similar properties sold “as is.” Strategic preparation pays — and having an experienced team ensures your property reaches the right buyers at the right price. Timing Matters Sometimes all it takes is a short runway to unlock your property’s full value. Give us an extra 45 days — and we’ll coordinate, complete, and position your asset for maximum return.

Market Insight Silicon Valley’s real estate market — long fueled by high-income tech talent and global capital — is quietly entering a new phase. The newly implemented $100,000 H-1B visa petition fee isn’t just a policy shift; it’s a ripple across the region’s housing and property patterns. With fewer new foreign-tech hires, short-term demand could moderate. But existing homeowners, executive buyers, and institutional investors are doubling down on income-producing properties, farmland, and strategic land holdings that hold value under any macro condition. Market Focus: From Speculation to Stability Savvy homeowners and investors are shifting toward tangible properties that balance return, security, and long-term value: Land-based holdings: Agricultural, mixed-use, or developable parcels with long-term entitlement upside. Cash-flow properties: Multi-unit homes, ADU-integrated residences, or short-term rental options providing consistent yield. Tax-optimized strategies: Cost segregation and 1031-like reinvestment leveraging bonus depreciation returning in 2025. The new visa fee reframes buyer and homeowner psychology: fewer new arrivals mean greater focus on property quality, stability, and location. Use this moment to educate your audience that real estate remains the most reliable inflation hedge — especially when stock volatility and policy changes dominate the headlines. From Homeownership to Portfolio Growth A Silicon Valley client transitioned from a single residence into a portfolio of land and income properties across Santa Clara County and San Benito. Through cost segregation and bonus ,depreciation, they reduced taxable income while increasing passive cash flow — turning equity into generational wealth. Their story underscores today’s market truth: those who reposition now will lead the next cycle. Market Data Snapshot Median single-family price (Santa Clara County): $1.99M (+5% YoY) Average sale price: $2.49M (+7.9% YoY) Active listings: +10% year-over-year Demand strongest in: Cupertino, Los Gatos, Morgan Hill, and Gilroy The $100K H-1B fee may slow short-term inflows of new tech professionals, but it’s concentrating wealth and focus within the existing market base. The winners of this cycle are those who act now — repositioning equity into real property with intrinsic utility and long-term value. Now Is the Time to Reposition Your Equity Schedule a confidential strategy session to analyze your holdings, timing, and 2026 repositioning options.

The California housing market is showing early signs of balance heading into 2026. According to the California Association of REALTORS® (C.A.R.) , statewide home prices and sales are projected to rise moderately as mortgage rates decline and supply slowly improves. C.A.R. forecasts that existing single-family home sales will reach approximately 274,400 units in 2026 , up about 2%  from 2025. The median home price  is projected to climb 3.6% to roughly $905,000 , signaling steady—not speculative—growth. Mortgage rates are expected to average around 6.0%  in 2026, down from roughly 6.6% in 2025, providing much-needed relief for buyers and stimulating market activity. For longer-term assets (like certain agricultural or industrial properties), the window may extend through 2030 , offering a limited but substantial opportunity to reshape your financial trajectory. Projections suggest a statewide shift toward stability after several years of volatility. For most homeowners, this means moderate appreciation and a more predictable environment for both buying and selling. By combining Bonus Depreciation  with Cost Segregation Studies  and 1031 Exchange strategies , investors can legally accelerate wealth accumulation while keeping their capital in motion. Santa Clara County: Premium Market, Distinct Dynamics While California overall is regaining balance, Santa Clara County  remains in a class of its own. The local median home price sits above $1.5 million , maintaining one of the highest values in the country. Growth has tempered compared to the boom years, but even a 2–4% increase  here translates into substantial dollar-value gains. Affordability remains tight , hovering near 12%, but buyer demand continues due to tech employment strength and limited inventory. New construction has increased, yet still lags demand , preserving the county’s long-term scarcity advantage. California vs. Santa Clara County — Comparative Snapshot Metric California (Statewide) Santa Clara County (Local) Median Home Price ~$905,000 (+3.6%) ~$1,500,000 + with modest growth Sales Volume +2% (projected) Stable to slightly lower Affordability ~18% of households ~12% (low, premium market) Active Listings Rising ~10% Persistently limited Market Leverage Balanced conditions Sellers retain advantage This comparison highlights how statewide averages can be misleading for Silicon Valley homeowners. Even as California as a whole trends toward balance, Santa Clara County remains a high-demand, high-value environment where timing, pricing, and positioning matter more than ever. Key Takeaways for Homeowners, Buyers, and Investors For Sellers Inventory is climbing but prices are still trending upward. This creates a unique window to list before  competition fully returns. Well-positioned homes continue to attract strong offers, particularly those with acreage, income potential, or strategic locations. For Buyers Slightly lower rates and expanding inventory mean opportunity is re-emerging. Buyers who plan ahead—securing financing, defining criteria, and acting decisively—will capture better terms in 2026. For Investors Moderate statewide appreciation coupled with strong regional fundamentals make 2026 an attractive re-entry point. Land and transitional assets in South County, Livermore, and Yolo County remain promising for long-term equity growth. Your 2026 Market Readiness Session If you’re considering selling, buying, or repositioning property in 2026, now is the time to strategize. Call 408.888.7794  or visit www.davenportREgroup.com  to reserve your session.

A powerful tax incentive is returning, and savvy real estate investors are already preparing to take full advantage. The reinstatement of 100% Accelerated Depreciation  for qualified property could transform your tax position—reducing taxable income, freeing capital, and accelerating portfolio growth. The Return of a Wealth-Building Strategy The new 2025 tax legislation is set to bring back 100% Bonus Depreciation for qualifying assets placed in service between January 20, 2025, and December 31, 2029. This means real estate investors and business owners can immediately deduct the full cost of eligible property—such as structures, land improvements, and equipment—in the same year the asset goes into use, rather than spreading deductions over decades. For longer-term assets (like certain agricultural or industrial properties), the window may extend through 2030 , offering a limited but substantial opportunity to reshape your financial trajectory. How It Works Under normal depreciation schedules, assets are written off over 5, 15, or 27.5 years.With 100% Bonus Depreciation, you can deduct the entire amount upfront in the year the property is placed in service. For example: A $500,000 acquisition includes $90,000 of short-life assets identified through a cost segregation study. With 100% Bonus Depreciation, that $90,000 can be fully deducted in Year 1—saving roughly $27,000 in taxes (assuming a 30% bracket). That’s immediate liquidity that can be reinvested into your next acquisition or used to strengthen cash flow. Why Timing Is Everything Behavioral finance teaches us that investors who act during windows of opportunity create asymmetric gains —small timing decisions that produce outsized financial advantages. This isn’t about tax avoidance—it’s about asset velocity . Every dollar saved through accelerated depreciation is a dollar that compounds faster in your next deal. By combining Bonus Depreciation  with Cost Segregation Studies  and 1031 Exchange strategies , investors can legally accelerate wealth accumulation while keeping their capital in motion. Turning Tax Savings into Portfolio Growth One Bay Area investor leveraged accelerated depreciation in 2019 to offset nearly $400,000 in taxable income. The savings allowed them to acquire a second property within the same year—doubling their rental income stream. Now, with the return of 100% Bonus Depreciation, that same strategy can be repeated—on an even larger scale. How to Maximize the Opportunity Act Within the Window  – Only assets placed in service between January 20, 2025, and December 31, 2029 qualify for the full 100% deduction. Order a Professional Cost Segregation Study  – Work with a qualified engineer or CPA firm to separate short-life assets from structural components. Integrate With Broader Strategy  – Align depreciation timing with your long-term goals—especially if planning a refinance, sale, or 1031 exchange. Stay Proactive  – Bonus depreciation benefits diminish after 2029 unless extended by future legislation. Early movers will capture the best advantage. The return of 100% Accelerated Depreciation represents one of the most significant wealth-building tools available to investors in 2025. Whether you own residential rentals, commercial properties, or agricultural land—this is your moment to structure your portfolio for maximum efficiency.