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News Corp vs. Godzillow?

news corp logo

I don’t know what this means yet for consumers, but realtors have been losing control of our destiny all year – at least News Corp might put up a fight. 

From HW:

http://www.housingwire.com/articles/31540-news-corp-will-buy-move-for-950-million

“This acquisition will accelerate News Corp’s digital and global expansion and contribute to the transformation of our company, making online real estate a powerful pillar of our portfolio,” said Robert Thomson, Chief Executive of News Corp.

“We intend to use our media platforms and compelling content to turbo-charge traffic growth and create the most successful real estate website in the US,” Thomson added. “We are building on our existing real estate expertise and expect to leverage the potential of Move and its valuable connections with Realtors and consumers around the country.”

NAR puts their old-fashioned spin on it here:

http://www.inman.com/2014/09/30/news-corp-set-to-acquire-realtor-com-operator-move-inc/

Posted by on Sep 30, 2014 in Can You Top This?, Listing Agent Practices, The Future | 6 comments

SD Case-Shiller Index, July 2014

July 2014 C-S

The San Diego Case-Shiller Index continues its ride to flatsville, with the July reading rising a scant 0.34% month-over-month. The year-over-year comparison dipped into single digits too, rising 8.27%, which still sounds positive to me.

But the deceleration is in, and the month-over-month reading is likely to go negative – possibly as soon as next month.  But that will be the week of Halloween and well into the off-season, when not as many people will notice.

These are the Case-Shiller Index NSA changes below for San Diego:

Month
M-O-M
Y-O-Y
Jan ’13
-1.0%
+9.8%
Feb ’13
+1.0%
+10.2%
March ’13
+2.0%
+12.1%
April ’13
+2.8%
+14.7%
May ’13
+3.2%
+17.3%
June ’13
+2.8%
+19.3%
July ’13
+2.0%
+20.4%
August ’13
+1.8%
+21.5%
September ’13
+0.9%
+20.9%
October ’13
+0.3%
+19.7%
November ’13
+0.0%
+18.7%
December ’13
-0.1%
+18.0%
January ’14
+0.6%
+19.4%
February ’14
+1.0%
+19.9%
March ’14
+1.3%
+18.9%
April ’14
+0.8%
+15.3%
May ’14
+0.5%
+12.4%
June ’14
+0.68%
+10.2%
July ’14
+0.34%
+8.3%

Case Shiller July 2014

Posted by on Sep 30, 2014 in Jim's Take on the Market, Same-House Sales | 0 comments

Carmel Valley For Example

carmel valley 92130 map

Reader elbarcosr sent in these thoughts and numbers on Carmel Valley:

I always pause and try to take a big-picture look at the market each month when you post inventory watch.  I get confused trying to get a feel for where the market is actually doing since so many stats come out blending apples and oranges and focusing on MOM or YOY, which I don’t like since snapshots seem misleading to me.

So I ran a comparison for 92130 detached solds for 1/1 to 9/29 for 2013 and 2014.  Limited it to 4br, over 2500 sq ft and under 1.8 since I think that is the sweet spot for CV, albeit maybe I should have lowered the top end sales price.  I didn’t delete any anomalies off the results, though it might have provided more accuracy had I done that.

I think 92130 is a decent proxy since there is a lot of volume and the houses are fairly interchangeable, give or take.  You can’t use west of the 5 as any over-all indicator I don’t think, Encinitas is pretty scattered with product variation and I don’t know Carlsbad all that well.

Data Point
2013
2014
% Diff
No. of Sales
250
176
-30%
Avg SP
$1,180,920
$1,236,260
+5%
Med SP
$1,199,000
$1,237,500
+3%
Avg $/sf
$356/sf
$374/sf
+5%
Med $/sf
$353/sf
$376/sf
+7%
Avg DOM
35
35
0%
Med DOM
17
23
+35%

What do these numbers say?  Perhaps despite all the histrionics needed to sell papers (I guess generate clicks would be more accurate), has 2014 just been a slightly boring to above-average year?  DOM still seems pretty low.

JtR thoughts:

1.  The price increases on top of last year’s frenzy are impressive, but they are relatively modest – and not large enough to scare off buyers who have already seen a 19% increase in the average cost-per-sf since 2012. So something else is contributing to the rather-large 30% drop in sales - either not enough houses for sale, or we’re running out of buyers.

Carmel Valley Total Detached-Home Listings Jan 1 – Sept. 15

2013 = 606

2014 = 563  (-7%)

There have been 7% fewer houses listed for sale in 2014, but sales are down 30%.  My guess is that the ‘inferior’ houses for sale are not selling like they were in 2013, and contributing to the rest of the difference.  Without frenzy, buyers get picky.

2. Run Out of Buyers? It sounds far-fetched, but once they buy their residence, buyers are done (or look elsewhere for rentals). There have been 841 CV resales over $1,000,000 in the last 48 months, and while there will always be buyers, the demand has to be thinning out somewhat with higher pricing.

3.  Carmel Valley is its own club - there isn’t a substitute.  The only other way to stay in the Del Mar School District is to move to Del Mar, where it costs more and you don’t have easy choices like you do with the newer tract homes that populate the 92130.  Same if you’re on the north side of CV and in Solana Beach schools – moving to Solana Beach takes big money and you’re probably going to buy an older home that needs work.  Ewwww

4.  The Days on Market has been fast-forwarded due to new listings being disseminated to buyers within minutes of hitting the MLS – and it has helped to inflict urgency too.  But the hyper-speed also contributes to listings going stale after a week or two, because both buyers and agents keep a Teflon memory, and consider a new listing for about as long as a loaf of bread.  I doubt it will change, and sellers need to be sharp on price from the beginning.

I agree with elbarcosr that Carmel Valley is a decent proxy for the rest of the local market.  It is by far the best place to compare like-kind properties, due to it being almost exclusively newer tract houses – and built by the same builder! And while the rest of SD County doesn’t enjoy the confluence of location, schools, and proximity of employers like Carmel Valley, at least we can learn from its general market data and see if it applies elsewhere.

Posted by on Sep 29, 2014 in Bubbleinfo Readers, Carmel Valley, Jim's Take on the Market | 11 comments

Inventory Watch – Steady

sept 2014

The national Pending Home Sales fell 1% in August – that’s it? The west was up 2.6%, which is even more surprising, but the lower-end homes are probably carrying the load.   Chargers looked good too, but injuries might catch up with them:

The UNDER-$800,000 Market:

Date
NSDCC Active Listings
Avg. LP/sf
DOM
Avg SF
November 25
95
$376/sf
47
1,988sf
December 2
79
$371/sf
50
2,047sf
December 9
72
$383/sf
43
1,954sf
December 16
81
$378/sf
42
1,948sf
December 23
77
$374/sf
49
1,937sf
December 30
76
$373/sf
51
1,950sf
January 6
74
$370/sf
49
1,995sf
January 13
71
$381/sf
44
1,921sf
January 20
72
$384/sf
41
1,877sf
January 27
75
$399/sf
40
1,891sf
February 3
78
$409/sf
41
1,876sf
February 10
82
$395/sf
38
1,927sf
February 17
85
$387/sf
35
1,929sf
February 24
90
$383/sf
37
2,008sf
March 3
82
$397/sf
39
1,942sf
March 10
88
$377/sf
37
2,008sf
March 17
89
$366/sf
34
2,038sf
March 24
79
$369/sf
34
2,031sf
March 31
78
$367/sf
39
2,069sf
April 7
87
$373/sf
32
2,054sf
April 14
97
$380/sf
31
2,000sf
April 21
87
$377/sf
32
2,062sf
April 28
107
$379/sf
29
2,044sf
May 5
114
$376/sf
27
2,046sf
May 12
108
$385/sf
31
2,012sf
May 19
107
$385/sf
0
0sf
May 26
105
$375/sf
34
0sf
Jun 2
102
$376/sf
36
0sf
Jun 9
102
$377/sf
37
0sf
Jun 16
104
$369/sf
35
0sf
Jun 23
111
$380/sf
34
0sf
Jun 30
119
$376/sf
36
0sf
Jul 7
122
$387/sf
36
0sf
Jul 14
127
$388/sf
34
0sf
Jul 21
135
$381/sf
36
0sf
Jul 28
144
$382/sf
37
0sf
Aug 4
148
$379/sf
39
0sf
Aug 11
135
$375/sf
42
0sf
Aug 25
135
$374/sf
43
0sf
Sep 1
126
$377/sf
46
0sf
Sep 8
130
$375/sf
46
0sf
Sep 15
134
$369/sf
45
0sf
Sep 22
127
$376/sf
49
0sf
Sep 29
132
$378/sf
48
0sf

Read More

Posted by on Sep 29, 2014 in Inventory | 1 comment

Wholesale-To-Retail Spread

Are you thinking of selling your home, and wondering how to go about it?

How you sell your house has an impact on the price, which is driven by the comfort level of the buyer.  There is typically as much as a 10% swing in pricing within the same neighborhood, depending on location in the tract, condition of the home, and how the house is sold.

Here is a general guide to sales-method-to-achieve-desired-price:

WHOLESALE PRICE – Stick a sign in the yard, and someone will come along.

WHOLESALE-PLUS – Stick a sign in the yard and an ad on Craigslist.

AUCTION – Hard to know if you’ll get wholesale or retail due to the limiting factors.  Qualified buyers may be turned off by their perception of the potential reserve price, the buyer’s premium, or slick-talking auctioneers.

RETAIL – You do your homework and hire an experienced, competent agent to sell your above-average home with good curb appeal in a popular area.  You agree to an attractive list price, and the agent conducts a mass-marketing campaign that generates an offer or two during the first week on the market.  You negotiate in good faith, and together you find a way to the finish line.

RETAIL-PLUS – You do your homework and hire an experienced, competent agent to sell your above-average home with good curb appeal in a popular area.  You agree to an attractive list price, and the agent conducts a mass-marketing campaign that generates multiple offers during the first week on the market.  Your crafty agent pits them against each other, and the ensuing bidding war causes an above-market sale.  But without a frenzy to drive the sale, buyers are more cautious, and look for any reason to cancel and get back on the fence, hoping prices come down. Here are the potential hurdles to closing a Retail-Plus sale:

  • Inspection reveals defects – The defects give the buyer a reason to try and clawback some of that retail-plus price.  How your agent handles this critical juncture will determine whether the retail-plus price – and sale – sticks.
  • Appraisal is a challenge – Your agent has to know the comps, and can present a compelling case that convinces an anonymous appraiser of the value.
  • Other agent is a ding-dong – The good buyer’s agents have already talked their buyers out of paying this high of a price, so you are left with the inexperienced/desperate realtors who don’t know, or don’t mind if their clients pay too much.  Somehow your agent has to find a way to get them to the finish line, usually in spite of the buyer’s agent.

You don’t need an agent to sell your house - and you could take a chance on beating the odds by short-cutting this list and still move up a notch.  But now that the frenzy is over, buyers are reluctant to throw crazy money at houses any more – unless you get great help!

Posted by on Sep 28, 2014 in Jim's Take on the Market, Listing Agent Practices, Thinking of Selling?, Why You Should List With Jim | 0 comments

Baby Boomers

From John Burns:

http://www.realestateconsulting.com/

It’s here. Every month, more than a quarter million Americans are turning 65.  Almost 80 million Baby Boomers, born over a span of 19 years, are shifting gears towards retirement…or whatever else is next.

Here are a few facts:

  1. The Boomers are the largest group of shoppers looking for a home today nationally, based on our Consumer Insights survey.
  2. They were waiting for their home equity to come back, based on our survey in 2012. Now, they have equity in their pockets and they are ready to move.
  3. More than 10,000 of these Boomers are turning 65 every day. This will continue well into the next decade.
  4. They are working longer and living longer.
  5. The Boomers are the most likely to report that they cannot find what they are looking for in today’s existing housing stock.

Of the 22,000 home shoppers who took our 2014 Consumer Insights survey, 42% of them are 55+ and shared with us that:

  • Home design will make them move (it is the third-most-important motivator for moving after location and price), but 55% say they can’t find what they are looking for.
  • 43% want to downsize, with most wanting 1,500–1,999 square feet.
  • Among those without children:
    • 46% want to live in a community that is more multigenerational
    • 33% want an age-restricted community
    • 21% want an age-targeted community

    (Preference for age-restricted and age-targeted communities varies widely by geography.)

The opportunities offered by the 55+ population are huge. They represent:

  • 25% of the total population
  • 50%+ of current homeowners (likely with plenty of equity) and have a homeownership rate in excess of 75%
  • 30%+ of total home transactions

All of these rates are only getting bigger.  The challenge is that the 55+ homeowner population tends to stay in place—less than 3% move per year, although it is higher for the younger portion of this cohort.

Posted by on Sep 26, 2014 in Boomers | 8 comments

Home Appreciation & Supply

John has an in-depth article out on home-price appreciation, and he’s no ivory-tower guy – his staff is on the street daily:

https://www.linkedin.com/pulse/article/20140917105113-3073844-behind-the-scenes-the-never-ending-puzzle-of-projecting-home-price-appreciation

An excerpt:

Rolling it all up, we are projecting 4% price appreciation for the country next year, with wild variations by market, huge vulnerability to changing mortgage rates, and a wide variety in risk levels (San Francisco looks to be in a mini bubble, but bubbles can go on for quite some time, while Atlanta looks to be very underpriced).

~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~

~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~

He mentioned that the best measure of pricing trends is the “number of months of supply of homes”.  He didn’t say what he considers ‘normal’, and not sure we’ll ever have that again anyway!  But it used to be that six months of supply was considered balanced.

Here are the current active listings of detached homes, divided by August closed sales:

NSDCC: 1,100/244 = 4.51 months.

SD County: 5,814/1,885 = 3.08 months.

I’m not sure how much you can read into this statistic though, because 867 (79%) of the NSDCC homes for sale are priced over $1,000,000, and only 1,086 sales have closed over $1,000,000 this year.  If we divide the 1,086 by 8.5 = 128 per month, which means there is an approximate 6.8-month supply of million-dollar homes for sale currently.

But following this stat over time would identify the trend.  I’ve added a new category so we can track it from now on!

Posted by on Sep 25, 2014 in Forecasts, Jim's Take on the Market, Month's Supply | 0 comments