I've been holding off on writing about this, because I was hoping to get some media coverage from a local 3rd party media source

Marterra Real Estate office with a colorful Costamazing mural at dusk.

Year To Date Activity

Properties Sold (single and multifamily): 1

Sales Volume: $1,050,000

Cumulative Value of Fund Properties Sold: $6,433,500

Homes/Units Managed: 308

Properties Leased: 9

Gross Collected Rent: $1,002,663

Brokerage Listings

Property Management Rental Listings

I've been holding off on writing about this, because I was hoping to get some media coverage from a local 3rd party media source, but for whatever reason I haven't been able to get anyone to pay attention.

I will do my best to keep this very brief. But please stick with me, this is a wild story.

In September, I wrote about how we learned that the City had forced the Feed Barn (a business that is literally older than our City) to get rid of their chickens. In September, we posted an Instagram video of my daughter, Kate, and the video received over 7K views. We also created a petition (please sign) to encourage the City to allow the Chickens to come back to the Feed Barn. When we posted the video and the petition, I honestly had no background on what was going on, but initially, it just seemed wrong.

With the help of a few friends (S/O to Chris and Jenn), we went down the rabbit hole and learned a few things.

1. The City utilized Costa Mesa Municipal Code Section 3:13 to force the removal of the chickens.

2. The City code has a clear exemption for retailers of animals in Section 3:15.

“The following persons are not required to obtain a special animal permit: Owners of establishments licensed to keep animals for the purpose of resale whose animals are kept on the premises of such establishment or other authorized place”

3. Additionally, the sale of chickens is protected under Vested Rights Doctrine, the City should be well versed on the subject of Vested Rights Doctrine (there is a seminal case that affirms this right Goat Hill Tavern v City of Costa Mesa (1992)).

4. The Feed Barn cooperated and got rid of their chickens.

5. The City pressed, and has refused to drop, criminal charges against the owner of the Feed Barn for-- stay with me here--having chickens, he no longer has, but is legally allowed to have.

If you have not signed the petition, please reconsider.

Misdemeanor complaint alleging unlawful livestock keeping at a Costa Mesa property, with the defendant’s name obscured.

If I did have first hand knowledge that the criminal complaint was filed after the City Attorney received a letter from the owner of the Feed Barn explaining his legal rights, I would be more capable of extending the benefit of the doubt to the City.

What is unbelievable here is that our City is spending both time and money on stuff like this and it somehow takes 7 years to open Harper BBQ. Which if you haven't tried it yet, do yourself a favor and make the trip.

It is insane stuff like this that made me get off the couch and run for City Council.

For those of you who want to make the world a better place you can sign up to volunteer or donate to my campaign👇

Campaign Website

Single-Family Transactional Market: The drought is over!

“The drought is over” over cracked, dry ground beneath storm clouds.

Yes, this is true, but I'm not talking about the California drought. I'm talking about our January sales volume. Prior to our one closing this January, I don't think our sales team has closed a home in the month of January since at least 2021.

Closing a deal in January is really hard. Just from a logistical stand point. Most buyers/sellers have zero interest in doing anything related to buying or selling a home during the last two weeks of December and the first two weeks of January. One data point isn't much to draw conclusions from, but our pipeline for February closings is nuts. It's pretty evenly split between buyers and sellers. Our little business is just a small sample size in a relatively medium market, but I am hearing similar comments from friends in the industry across the country.

Why does this matter? Based on data from the National Association of Home Builders (NAHB) and the Bureau of Economic Analysis (BEA), housing's overall contribution typically averages 15-18% of GDP.

Remember last month when I said:

Everything clicks in 2026

If this volume holds up, hold on to your britches, its going to be a wild 2026.

*** It is incredibly important to provide caveats. Our team is fortunate to work in a lot of higher end coastal homes, so that definitely skews the data. From our experience, this does not apply to condos, in particular, one bedrooms, with HOAs. As the kids say, that sector is cooked.

Single-Family Transactional Market: As I mentioned above, we had our busiest December in recent memory. With that being said, as with last month, every transaction came with it's own challenges.

The market is still significantly softer than what we have seen in the past. Typically, our listing strategy is to recommend listing below what we think the home will sell for in order to encourage a bidding war; however, in today's market, buyers seem to be more hesitant to pay much over asking. Our current pricing strategy (for most homes) requires, more finesse, price it at the price it will trade at. Not above, not below - right on the money. To pull that off you need an agent who is very active in the market.

Residential Rental Market: Last month I shared we had a record high of 17 vacancies. We have absorbed most of that inventory and now have 5 homes remaining for rent. Maybe not surprisingly, the most challenging homes to lease right now are larger homes where you might expect parents of school aged children to live. A lot few parents move during the middle of the school year.

Mortgage Market/Interest Rates: The residential mortgage market finally seems to be easing up after years of tight conditions. The major forecasters (Fannie Mae, MBA, NAR, Redfin, Zillow) mostly agree on a modest improvement, with 30-year fixed rates likely averaging in the low to mid-6% range, perhaps around 6.3%, and occasionally dipping lower if inflation stays in check. No big plunge to pandemic lows but enough relief to bring sidelined buyers back into the game.

That should lift home sales, with estimates ranging from a 3-10% gain to a more optimistic 14% from NAR, pushing existing sales toward 4.2-4.5 million. Originations are expected to rise to $2.2-2.4 trillion, led by purchases with refis gaining ground. Price growth will slow to 1-2% nationally, inventory should inch higher, and affordability will improve a bit, though the lock-in effect and regional splits remain.

Overall, 2026 feels like the start of a more normal market: steadier, not explosive, but a solid step forward. If you're planning a move, now is a great time to talk it through. I live for these discussions, so reach out anytime.

Commercial Real Estate: Our management company manages a fairly decently sized portfolio of industrial, retail, office and multifamily properties. Collectively, it probably makes up about 40% of our management portfolio. However, of our entire portfolio, 3 larger properties that make up about 15% of our portfolio consume about 70% of our time. Each of these properties have 1 thing in common they are in "C locations". C locations mean higher crime, lower quality tenants, higher turnover, lower rental rate growth and generally higher levels of deferred maintenance. The biggest issue with issues caused by location, is you can not operate or execute (with the exception of deferred maintenance) your way out of problems.

What does this mean for the owners? That high cap rate they thought they were buying is not materializing.

*PS - we were not involved in the acquisitions of any of these properties.

To the owners of these properties (I think you know who you are), if you are reading this, keep your head up and we are here for you.

Macro Observations: Jerome Powell and team decided to keep interest rates steady at 3.5% to 3.75%. No hikes, no cuts.

This is the first time they've paused since last July, even though a couple of governors pushed for a small quarter-point drop to keep an eye on the economy.

Trump has appointed Kevin Warsh to take over as Fed Chair from Jerome Powell, whose term wraps up in May. Warsh is a sharp economist, the youngest Fed governor ever, with experience from the Bush era handling the 2008 crash, plus stints at Morgan Stanley and degrees from Stanford and Harvard Law.

Looking ahead, I expect him to be cautious with inflation, maybe slow-walking any rate cuts. I personally think we need to cut 50-75 basis points this year, so I'm interested to see how slowly he walks. I'm not overly concerned with inflation; it has been cooling, and housing (which is a major contributor) is showing signs of cooling on a national basis.

The biggest challenge for Warsh's Senate confirmation is likely concerns about Federal Reserve independence. This follows a criminal probe into Jerome Powell for allegedly making false or misleading statements to Congress about cost overruns on the Fed's $2.5 billion headquarters renovation project. The Department of Justice describes it as an issue of taxpayer accountability and transparency. The situation could result in more questions during hearings about how Warsh would protect the central bank's autonomy.

What's The Good Word: Anduril Industries, founded by Palmer Luckey, the Costa Mesa-based defense tech powerhouse, just announced a massive $1 billion expansion with a new 1.18-million-square-foot campus in Long Beach near the airport, set to open by mid-2027.

A quick aside, I once went up to Palmer at a Bevmo in Costa Mesa and said a few words. I have never been starstruck in my life, and I also have no idea what I said. I'm sure I mumbled a bunch. He was super generous and kind.

Proposed Anduril campus site plan showing buildings, parking areas, roads, and landscaped spaces beside Long Beach Airport.

Anyways, the project will span six buildings with a mix of office and R&D space, they will keep their HQ right here in Costa Mesa, but adds a second major hub to ramp up production for military demands. It is expected to bring around 5,500 direct jobs in engineering and manufacturing, plus thousands more in construction and support roles, which could spark a real estate surge similar to what SpaceX did for Hawthorne. I wouldn't be surprised if neighboring Orange County cities are the recipients of a lot of this new demand.

I'm looking at you Seal Beach.

Sandy beach and ocean with palm-lined buildings beneath a snow-covered mountain range.

Project Updates: We have several active projects; here is a quick update on a few of them.

Lillian & Bucknell, Costa Mesa & Pegasus, Newport Beach: Me waiting for permits.

For those municipal policymakers out there, you want to know why you are missing out on a lot of permit fee revenue? When the City take 6+ months to issue a standard permit, the risk profile changes. A lot of projects cost $10K per month to hold. If an investor knows its going to cost $60K to get a permit (just carry costs), you create a real strong incentive for the investor to do whatever they can to not pull a permit.

A person slumps beside a table in a dim room, with a refrigerator behind them.

Thanks again for reading, and I would like to thank our agents and property managers who provide valuable insights from their day-to-day in the field. Without them, this email wouldn't be very useful or interesting.

If there is anything you need: vendors, lenders, or others, please let me know. We have an extensive network of the best and brightest in the industry.

I geek off this stuff; if you want to grab a coffee or chat about anything related to real estate, the market, or investing, please do not hesitate to reach out.

If you don't want to receive these updates in the future, please smash the unsubscribe button below. No hard feelings; I do it ruthlessly. Lastly, if you found the above informative, please share it with a friend or drop me a line.