Episode 40: Interview with Kyle Kemp

Scott Williams: Sweet Home Santa Barbara, where the skies are so blue. Sweet Home Santa Barbara, what’s worked for me can work for you.

Jonathan Robinson: Welcome, friends, again to Sweet Home Santa Barbara. I’m your co-host Jonathan Robinson, and with my friend and realtor.

Scott Williams: Scott Williams.

Jonathan Robinson: We have a special guest today. Scott, your boss, so to speak, Kyle Kemp, he’s the regional vice president for Ventura, Santa Barbara, and San Luis Obispo counties. He’s in charge of over 450 agents for Berkshire Hathaway Home Services, California Properties, and I’m sure you know a lot of stuff, Kyle. So I’m looking forward to finding out what your advice is about real estate and everything that you might know. So welcome to Sweet Home Santa Barbara.

Kyle Kemp: Thank you. Thank you, both of you. Glad to be here.

Jonathan Robinson: Since he’s your boss, I’ll let you start.

Scott Williams: Well, Kyle, you’ve been in the real estate business for quite a while, why don’t you tell us a little bit about going back?

Kyle Kemp: Yeah, so I’ve been in 35 years, I’ve owned real estate companies. I’ve been on the sales side for many years, and then I’ve been managing for Uncle Warren we like to call him for about 21 years now.

Scott Williams: That would be Warren Buffett for people who didn’t notice the Berkshire Hathaway at the beginning of this.

Kyle Kemp: Yes.

Jonathan Robinson: I like how you just refer to him as Warren, we’re all friends here.

Kyle Kemp: Yeah, I’m pretty sure he doesn’t know I exist.

Jonathan Robinson: With 450 agents to oversee, you must know a lot about the trends, what’s happening. So what is happening, where are we going?

Kyle Kemp: It’s unique. It’s a unique time for us. We’ve never seen this before, we typically, when we have things change that are drastic, and in our case it’s been the interest rates. Typically, we will see housing slowdown, and when we talk about slowdown, we see the number of units start to increase as far as listings, more homes come on the market, and typically, with more homes coming on the market, you would see prices come down. However, we’re in a weird squeeze righ now where a lot of people that normally would be selling their houses in this environment are in very low interest rates, and so they really don’t have an option to move and therefore, we still have a high demand because we’re always behind the eight ball when it comes to number of units for California because we just don’t build enough, and so we don’t have enough supply and with the normal supply that we normally get in this kind of environment not coming on market, we continue to have a higher demand and continued low supply, which is keeping prices stable. So in a time that we should be seeing some flexibility on pricing, we’re just not seeing a lot of movement there.

We have seen different shifts in different markets, meaning different price ranges, different products. We’re seeing the shift from buyers wanting to get into anything where they just were scrambling to buy anything, including things that need a lot of work. We’re seeing that kind of go away and buyers are really demanding product that is finished and completed. I think a large part of that was with the COVID supply chain that created real complexities when you were trying to remodel something or build something. So buyers are really finicky about what they want, they want something completed, done, and ready to move in, and then we’re also seeing a little bit more of a slowdown in the super high end where we saw a lot of activity and that was largely because we were the perfect storm for COVID. During COVID we had a huge influx of people from Los Angeles and San Francisco that were looking for a place safe haven and Santa Barbara was found and so we had a large amount of big money, celebrity money that came into Santa Barbara and created this unusual market for our super high end.

Scott Williams: It’s nice to be in a community that’s the receiving end of so many people’s attention. I think it’s worth mentioning that shift was really quite big, do you attribute that pretty much just to COVID or anything else to say about that?

Kyle Kemp: Well, for a long time, and I’m originally from Pasadena and I relocated here 16 years ago and from my view, Santa Barbara was half price. It had always been very affordable as compared to if you were looking in housing in Malibu or Pacific Palisades or any of that area down there, Santa Monica, and then you could buy the same product up here, same housing, same estate for half price. So, for a long time, it was largely driven by the fact we didn’t have an industry. This was a place people came to retire, this was a second or third home but it wasn’t driven by people that could work. It was driven by ancillary money and so when the shift with COVID it was not only the fact people are trying to get away from maybe the COVID incident, they also were changing their work habits, and the work habit required a lot of big executives with money and even all the way down to the average working American could now maybe work from home and if you’re going to work from home, well, where do you want to work from home? Then Santa Barbara became really sweet. So there was a number of catalysts that really created that really unusual market and that was if you lived in Santa Barbara and you were during COVID, you wanted a nicer bigger house. If you were out of Santa Barbara and you were coming, you wanted to come to Santa Barbara, one, because prices were more affordable and you could also live the lifestyle and have what we have here to offer and then on top of it, you had just the shift of everybody working differently. So that created a big opportunity for a lot of people to move here that couldn’t move here prior.

Jonathan Robinson: Yeah. Kyle, I’m wondering if you see a big difference between those three counties you overseas Ventura, Santa Barbara and San Luis Obispo, how would you differentiate them in terms of the buyers or sellers?

Kyle Kemp: The beauty of my world is that I oversee 14,000 sq miles of California probably, the most beautiful part of California and in our world, we work with selling mobile homes in the middle of Central California, and those are very affordable and we go all the way to estates. There are 40, 50 million to ranches and large wineries. So we have a huge swath of different products to sell and so when I look at my market, it’s very hard for me to say in general terms what’s going on. We typically talk about Santa Barbara from north and south because there is a difference from the northern part of the county to the southern part of the county and then when we talk about Ventura and San Luis Obispo, those are all different. So some things were doing really well. Ranches were really popular for the last few years, and those typically take a long time to sell, and we don’t see a lot of activity in that market. That market is cooling off quite a bit. If you’re talking about affordability, well, then you had to go to Ventura and you had to go to San Luis Obispo or North County Santa Barbara and we’re struggling in California. We’re struggling with the affordability and right now, if you were to talk about a tight market, that’s a tight market, the interest rates are really affecting those buyers, and the product is not available. There’s still a lot less available, but if you look at some of the other counties like San Luis Obispo or Ventura, there is a little bit more product available, and the pricing is still a little bit more affordable. When we talk about California, we’re not talking nationally.

Jonathan Robinson: I get it. Go on Scott.

Scott Williams: If you’re coming from outside of the area, I mean, you have probably your own conceptions of what it’s like here, but I suspect that there might be certain misconceptions that people have about trying to move here. How do people tackle our area? What do you have to say about these people who come to buy?

Kyle Kemp: I think, you know, when you hear the word Santa Barbara or some of these areas Montecito, there’s an instant turnoff, which is that it’s unaffordable and in most cases it’s probably true. However, we have a lot of areas outside of our specific Santa Barbara Montecito areas that can provide a lot more affordability. When I look at buyers from outside the area, it’s always an uncomfortable conversation when we talk about what you’re going to have to pay, but we have a lot of things here to offer that you’re paying for, but the end result is going to be a much happier life. The cost of living is, yes, more expensive here, but the lifestyle that we provide somebody and the opportunity to live the life they want to live is priceless.

Jonathan Robinson: Berkshire Hathaway Home Services, California Properties is one of the leaders in this field. What makes that company unique when people are working with you?

Kyle Kemp: That’s a good question. I think the brand in itself, it just immediately instills security and strength. Everybod, if they don’t know Berkshire Hathaway’s name, they definitely know the leader, Warren Buffett. With Warren comes years to stability, correct decision making when it comes to business, a very ethical background. He is looked at as an icon when it comes to how to run a business and so most people want to align with people that are doing things the right way and better. So that’s what typically drives the general group and then with the uber wealthy, they play in that circle. They know him. They know that world to be where they want to be and so it has attracted a lot of the very wealthy because of the fact that they want to be aligned with that brand.

Scott Williams: Well, why don’t you share your view of what do you think is in highest demand in Santa Barbara right now?

Kyle Kemp: Yeah, going back to again, I think even all the way through all the markets, from affordability all the way to the estate market, it’s finished product and styles change and right now, what’s predominantly very popular is in the over 5 million is going to be a contemporary style house. Very clean lines, very open, lots of light, always a view if you can get it, is going to be popular. If you’re looking at maybe two million to five million, what’s very popular is this kind of modern farmhouse style black and white. You’ve seen it on all the TV shows. Again, they’re looking for very clean, open the environment where they have opportunity to live outside. So access to the backyard, the ability to open up all the windows and doors and be able to access our Santa Barbara lifestyle without the bugs. Super popular for everybody and then with everybody that’s trying to squeeze into the marketplace, again, they’re looking for things that are not going to put them into harm’s way when they buy, meaning that they don’t get straddled with a lot of fix up to do. So it’s a pretty general consensus that most buyers are looking for a finished product.

Jonathan Robinson: I’m wondering, personal level, kyle managing 450 agents and a gazillion amount of land, how do you balance your life? I know you have two kids and any tips you can do on how to stay sane in your world or in this world.

Kyle Kemp: Yeah. So getting up early and getting out of the house before everybody wakes up, that’s crucial. Get out there, I do a lot of walking, I have a dog that wakes me up every morning at 5:15, and we’re up and out and then keeping a good perspective on balance, trying to make sure that when I’m coaching a lot of my agents, a lot of times it’s not about how to make the next sale or how to get through to a transaction, which is all part of it, it’s also about how do you present a buyer or a seller with the confidence, and the best way you can come across as confident to that buyer seller, it’s going to be through your own self confidence, and that comes with life balance, meaning you need to get out there and enjoy yourself, you need to see the outdoors, and actually, you need to know what Santa Barbara is about, and Santa Barbara is about having a great life and so as long as you’re living that life, then you’re able to sell the product, which is the houses and the lifestyle.

Jonathan Robinson: Wheat home, Santa Barbara. Yeah.

Kyle Kemp: Exactly.

Scott Williams: Well, Berkshire Hathaway as its enjoyable position in the marketplace, as the leading company in this entire market by quite a bit. Anything you want to say, particularly about Berkshire Hathaway as a company here in town that people might not even know?

Kyle Kemp: Well, yeah, currently, right now, in some of our markets, we’re as much as 60% of the market share. If you were to add up all the competitors we have in our marketplace not all, but the top five, they wouldn’t equal what we’re doing right now as far as market share. Most of the markets we control between 30 and 60%. What do we attribute that to? Well, I know for sure it’s the agents, we have the best agents out there and Scott included in that, and that part of it, is that we provide a good service to the client. The client is the most important thing, nothing comes before that. That’s always in the back of the mind of the brand, and that trickles down all the way from the top, and that is we are here to provide a good service. We’re here to have repeated customers, and with that comes a dedication to the job and the people, and that includes me and I think that’s what I preach to and that’s what I preach down to our agents, as well.

Jonathan Robinson: Any advice you have for a home buyer nowadays, everything’s expensive, anything that gives them a slight edge over all the other home buyers?

Kyle Kemp: Yeah, I would just say patience is going to be key. You have to be very patient. It will work out. It will work out as long as they’re patient and pay attention to their agent and really listen when it comes down to their agent’s advice on how best to structure the offer, it is a still competitive market. However, I oversee 200 transactions sometimes a month, and over 1600 last year, we see every buyer eventually get into the house if they are determined to buy a house, they will get into the marketplace. It will happen. You just have to be patient.

Jonathan Robinson: An occasional lottery ticket might help.

Kyle Kemp: An occasionally, yes. Wasn’t too far away from here, somebody just got $1.7 billion.

Jonathan Robinson: I’m sure he’ll be calling you soon.

Kyle Kemp: Yeah.

Jonathan Robinson: Any last questions, Scott?

Scott Williams: Yeah, just looking out into the future, there’s always technologies, things that are coming along, sort of coming waves through the business, what do you see on the horizon in this?

Kyle Kemp: You know, technology has been our friend. I originally got into management because somebody said this Internet thing is going to replace agents, so you better find something other than being a real estate agent on your resume. So I opt into Management. Well, that was completely erroneous. What happened was it actually helped us, it created a better experience for the agents as well as the clients, it made it faster, easier, more informative, it just spread information. Right now, all the discussions is about AI, and AI has been in our world and is utilized within a lot of our systems for the last five years probably, has been heavily, and it’s probably been there longer, but not as accomplished as it is now. But we’re going to continue to see AI, and I think it’s something not to be afraid of. I think it will actually help, again the agents, and I think it will help the consumer as well. I don’t see it replacing any jobs in our environment, it’s just going to be an additive to help the process.

Jonathan Robinson: Anything that we didn’t cover that you think would be important to say and also how people connect with Berkshire Hathaway or you are–

Kyle Kemp: Yeah, well, obviously, Scott, you have a robust website, and the opportunity to reach him is fairly easy. Berkshire Hathaway is pretty predominant in town, and we have signs pretty much everywhere. So finding a sign and a phone call phone number is pretty easy, but you’re always welcome to contact me if you have any direct questions or you want to hear from myself, and I’m available. My name is Kyle Kemp, and I’m available any time of the day, 24/7.

Jonathan Robinson: But with life balance thrown in there somehow.

Kyle Kemp: But with life balance somewhere in there, I might call you back at an hour, not a half hour.

Jonathan Robinson: Scott, how can people contact you?

Scott Williams: Best is probably email Scott@scottwilliams.com.

Jonathan Robinson: Great. Well, a pleasure meeting you, Kyle, and thanks for your expertise and thanks for everybody listening to Sweet Home Santa Barbara. We hope to catch you next time.
SPEAKER A

Scott Williams: Thank you for listening. Please subscribe to our podcast on your favorite App. If you know someone preparing to sell their home, please tell them about the podcast. Visit Scottwilliams.com to contact me and download the two free e-booklets: Is My House Saleable Now? and How Not to Buy a Money Pit. Thank you for listening.