Inventory Watch

This year’s inventory is looking a lot like last year, with a few more listings hanging around unsold.

NSDCC Total Number of Listings, Jan 1 through Feb 20

2023: 355

2024: 395

How’s the pricing? Here are the weekly quartiles for 2023 and 2024:

It looks like the market is settling in for a ride that’s similar to the one we had in 2023!

(more…)

Uncle’s House Part 2

Once we raised the list price yesterday, the message spread quickly. I still had a good turnout at my open house – about half of the amount of attendees that I had on Friday – but many came just to ask why the price changed.

Agents appreciated the transparency though, and they were quick to realize the benefits. If your buyer is only interested in paying $3-something, there is no need to go through the process of making an offer and getting your hopes up if there’s no chance of being in contention.

It’s part of the slow-motion auction. Give everyone a shot to buy the home and have full transparency propel the outcome.

Uncle’s House

I don’t make it a habit to drive around the state looking for sales – my uncle lived here for 47 years and survived the last couple of years by himself. Every 90-year old needs to have people around!

He moved to a senior facility in Marin County to be closer to my mom and sister, plus have many other seniors around for engagement. Today, he’s entered into the big Saturday Putting Contest, and tomorrow he’s going with a group to the symphony!

Watch my video to the end for the cliffhanger:

https://www.compass.com/app/listing/45-springer-road-los-altos-ca-94024/1517137072886523177

Hiring a Buyer-Agent

The commission lawsuits and action by the DOJ will cause buyers to wonder if they need to pay for representation, and what do they get if they do.

It will also be a function of how much it costs. If the service was free, everyone would do it.

It’s been like that in the past, but it also caused buyers to be a little too casual about who they selected, and they tended to just grab someone – which doesn’t always bode well.

  • If the fee was 1% at closing, you’d probably do it – if you liked them.
  • If the fee was 1.5% to 2.0% and the terms were clean and non-exclusive plus the agent made a really good case why he’s worth it, then yeah, maybe.
  • If the fee was 2.5% to 3%, there would need to be some guarantees or real promise that you would get exactly what you wanted, and be very impressed with the service too.

Buyers will be able to include in their purchase offer that the seller pays all or part of the buyer-agent commission. But there won’t be any promises about what a seller might pay – if anything. So buyers should be prepared to pay the entire amount to their agent, as agreed up front.

What should buyers expect? What are the skills that good buyer-agents possess and implement on behalf of their buyers? Here is my quick list:

Overall analysis of general market conditions

Video /audio tours of prospective homes for sale

Pinpoint Home-Value Analyses

Measure up the sellers and listing agents

Winning-price predictions

Offer Strategies

Bidding-War Management

Contingent offers that win

Tough and detailed inspections with free quotes on repairs/improvements

Expert deal management

Foreclosure hunting

Bridge-loan financing

Off-market homes for sale

Sniff out any shenanigans

See the new listings in person every week.

There are also the 132 things agents do for buyers linked here, but the real problem is demonstrating the skills. How will buyers know what they need? How will agents show them what they have to offer?

When you go to the car dealer, they let you take the car for a drive around the block. How can you do that with a buyer-agent?

It would be fruitful for agents to have a blog where they demonstrate how they work, and provide evidence of their results. But that may be asking too much of agents.

We do free consultations for sellers. Let’s do them for buyers too.

Buyer-agents should offer their list of services AND be willing to meet any prospective clients-to-be at a home for sale so agents can show them what they do. A tour of a house to point out the positives and negatives will give the potential buyers a great sense of the agent’s expertise.

Agents – let’s make the free consultation at a home for sale part of the effort to assist buyers. Besides, you want to get a sense of whether you want to work with these buyers too.

Before you get married, you should have at least one date!

What do you look for when you meet your potential realtor at a home for sale to see what they have to offer? If they add to the experience something you didn’t know, then you’re on the right track – ask questions! If they say, “Here’s the kitchen”, it is an automatic disqualification – just run to your car!

Dominance vs. Fiduciary

These Palo Alto guys have been making national headlines since they rolled out their reduced-commission program last week. They are offering a $10,000 fee to buyer-agents, instead of a percentage, AND encouraging buyers to come directly to the listing agent to avoid paying any fees (which is my beef).

Why would a high-end independent brokerage that sold 100 homes in the last 12 months – mostly in the $3,000,000 to $10,000,000 range (with sales of $40,000,000 and $44,000,000 too) – feel the need to effectively shut out their fellow real estate agents? Beats me.

Last week, the Department of Justice stated that commissions should be decoupled and NO fee be offered up front to buyer-agents by the seller or listing agent (though they did agree that buyer-agents can include a seller-paid commission in their buyer’s offer).

What gets lost in the discussion is the 120-year history of broker cooperation – where other agents can sell my listings, and I can sell theirs. It is a terrific system that best serves the sellers and buyers, which is our fiduciary duty.

But greed and market-share dominance is pushing fiduciary duty to the sidelines. Instead, brokerages are taking advantage of the current uncertainty to craft a quasi-single-agency package that effectively shuts out the cooperating buyer-agents under the guise of saving the seller money. Is it in the seller’s best interest to discourage the outside buyer-agents?

This is one of their first listings to hit the open market that offered their $10,000 fee to buyer-agents, and it went pending in seven days:

https://www.compass.com/app/listing/764-parma-way-los-altos-ca-94024/1510956913476773969

Keep this house in mind – I’m listing a house near it this weekend!

NSDCC SP:LP Ratio

Another good way to anticipate the market trends is to check the direction of the SP:LP ratio:

NSDCC Monthly Sales and SP:LP Ratio

Month
# of Sales
Median LP
Median SP
SP:LP
Jan 2022
149
$2,099,999
$2,200,000
105%
Feb
169
$2,099,999
$2,300,000
110%
Mar
219
$2,384,000
$2,500,000
105%
Apr
239
$2,299,000
$2,450,000
107%
May
230
$2,300,000
$2,432,500
106%
Jun
203
$2,200,000
$2,330,000
105%
Jul
165
$2,199,000
$2,249,000
102%
Aug
177
$2,100,000
$2,100,000
100%
Sep
146
$2,037,499
$1,940,000
96%
Oct
124
$2,225,000
$2,125,000
96%
Nov
123
$1,925,000
$1,860,000
97%
Dec
110
$2,091,500
$1,892,500
90%
Jan 2023
105
$1,995,000
$2,000,000
100%
Feb
112
$2,150,000
$2,040,000
95%
Mar
191
$2,199,888
$2,200,000
100%
Apr
165
$2,199,000
$2,180,000
99%
May
178
$2,300,000
$2,362,500
103%
Jun
160
$2,199,500
$2,257,500
103%
Jul
170
$1,998,750
$1,961,250
99%
Aug
198
$2,224,500
$2,217,500
100%
Sep
154
$2,272,500
$2,201,250
97%
Oct
140
$2,250,000
$2,182,500
97%
Nov
117
$2,325,000
$2,200,000
95%
Dec
87
$2,100,000
$2,050,000
98%
Jan 2024
108
$2,200,000
$2,267,500
103%
Feb
97
$2,395,000
$2,500,000
104%

Pricing looks strong – similar to the March-May, 2022 era, which was the hottest frenzy ever!

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