bubbleinfo.com

This is the real Leucadia – no sidewalks, big lots, multiple remodels, and funky stuff everywhere!

Have you been shying away from older fixers, hoping to buy a newer or remodeled home? 

With the thin inventory, it might be wise to consider expanding your target.

Here’s one on a quiet culdesac with no fees that wouldn’t take much to revive:

The main point of the article published in Realtor magazine was to spotlight how shady, fraudulent dealings by realtors are bad for the market. Specifically, I’m talking about when listing agents sell a new listing to their own buyer before inputting it onto the MLS.

Realtor fraud is bad for business, yet nobody talks about it.  Shady shenanigans are allowed to exist, and in some circles they are encouraged, for one reason – to pad the wallets of agents.  When you see some of the finest realtors in town doing it, you know you got a problem:

I usually don’t direct any blog material towards agents – can the regular bubbleinfo audience can be patient while I try to make a difference?  Thanks.

From NAR’s Realtor Magazine:

It’s widely agreed that foreclosures and REO properties devastate nearby home values and impede the housing recovery. But we don’t hear similar complaints about short sales. How do the two categories compare where housing prices and a healthy real estate market are concerned?

Here’s my take on their differences:

- Seller motivation issues. Properties listed as short sales are often occupied by home owners who aren’t concerned with getting top dollar. Instead, their motivation may be to extend their “free rent” program or get out of their financial obligation to pay off a mortgage. Consequently, they often don’t fix up their house to sell it and may be less than co­operative about showings. On the other hand, REO listings are vacant properties and have a lockbox for easy access.

- Delays. Short sales require that home owners submit their financials to the bank every month—and if they don’t, the sale stalls. The delays and uncertainties make these listings very difficult to sell. In contrast, it takes a week or so to get a REO listing into escrow, with deals closing in about 30 to 45 days, whereas short-sale approvals these days take 30 to 60 days. To be fair, this is an improvement over a few years ago when it could take six to 12 months or more to hear from a lender.

- Pricing. Short-sale agents often price their listings aggressively low to compensate for the difficulty in selling. They hope that a lower price will draw buyers interested in a bargain. REO listings, on the other hand, are appraised by neutral third parties and priced for retail sale by the asset managers, who have a fiduciary duty to their investors to maximize return. So-called “bank deals” are largely a myth—asset managers don’t determine retail value and then knock off 10 percent or more. And if they do inadvertently price a property too low, their selling strategy enables every buyer to make an offer within the first few days. When that happens, the sales price can be bid up to retail—or even higher.

- Buyer preference. Buyers shy away from short sales because of their uncertain, murky reputations. Because of lower demand, they sell for a lower price. But there is a high demand for REOs because bank-owned properties enjoy the reputation that they are underpriced, even though they have been selling well for years.

- Fraud potential. Short sales are fertile ground for fraud. These properties, priced to sell by the listing agents, are sometimes shopped around exclusively to a small group of buyers already known by those agents. Deals that are made “prior to listing input,” and sold at an untested price without open-market exposure, are unethical in my view—and if district attorneys were to investigate, those transactions might appear fraudulent. Now, those listing agents might claim that if the bank approves the sale, then who cares? However, the NATIONAL ASSOCIATION OF REALTORS®’ Code of Ethics states that NAR members are to treat all parties honestly. It is not honest to send your short-sale package to the lender for approval and claim that you exposed the property to the open market if you haven’t actually done that. By comparison, REO asset managers insist on open-market exposure to ensure the best possible sales price.

As an industry, we should acknowledge that REOs offer a better way to sell homes and improve the housing market than short sales—for consumers and practitioners. Vacating houses, sprucing them up, putting a lockbox on them, and exposing them to the open market for a period of time is how you can sell distressed properties for the best price.

Jim Klinge has been selling homes since 1984 and is broker-owner of Klinge Realty, a 12-person company with headquarters in Carls­bad, Calif. He and his renegade blog, bubbleinfo.com, have been featured on ABC News Nightline, CNBC TV, and Reason.tv, as well as in The Wall Street Journal, Businessweek, Grant’s Interest Rate Observer, and the Los Angeles Times.

Thanks to booty juice for sending this in from bloomberg.com:

A week after Christine Lynch listed her house in the Brentwood neighborhood of Los Angeles for $3.625 million, she had seven offers. Within 10 days, a deal was reached for the five-bedroom, six-bathroom home — and for $225,000 more than she asked.

“My first reaction was, ‘Wow, I guess we’re really doing this,’” Lynch, 55, said in an interview. The all-cash transaction was completed on April 23. “I was really surprised by this level of interest and how quickly it sold,” she said.

Bidding wars are breaking out for luxury homes in such wealthy Los Angeles enclaves as Brentwood, Beverly Hills and Bel Air as an increasing number of buyers bet on rising home prices and investors return to the market. Even properties in need of extensive renovation are being fought over by shoppers who expect to resell them for more after a remodel or rebuild.

“The percentage of people who think prices are only going to go up is the greatest I have ever seen in my career,” said Syd Leibovitch, president of Rodeo Realty Inc. in Beverly Hills.

Sales of Beverly Hills homes priced at $2 million and higher climbed 11 percent in the first quarter from a year earlier to 39, according to DataQuick, a San Diego-based provider of property information. In Brentwood, whose residents include actress and singer Julie Andrews, they increased 56 percent to 25, and in Malibu they gained 64 percent to 23.

Throughout the U.S., residential-property sales of $1 million and higher rose 7.2 percent in March, the most recent month for which figures are available, from a year earlier, according to the Chicago-based National Association of Realtors, whose price categories stop at that amount.

Across U.S.

Demand has been rising for high-end homes in the northeastern U.S., including Boston and New York; on the California coast; and in parts of the southern U.S. amid a recovery in financial markets, according to Paul Bishop, vice president of research at the Realtors group.

In Brentwood and Beverly Hills, homes usually start between $2.8 million and $3.2 million for those on smaller lots in low- lying areas, and can go as high as $20 million for larger plots, according to John Gould, manager of Rodeo Realty’s Beverly Hills office. Properties in hillier areas, which usually are larger and have views, tend to range from $5 million to $75 million.

In the Los Angeles area, multiple offers — as many as a dozen per home — have reduced listing times for the highest- priced houses as bidders worried about losing out act faster than they have in the past two years, according to Stephen Shapiro, cofounder of Westside Estate Agency in Beverly Hills.

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You may have seen this in yesterday’s UT:

Spring home sales in San Diego County continued to heat up in April, DataQuick figures released Wednesday showed. 

The county recorded 3,559 sales last month, the highest home-sale tally for an April since 2006, when 3,974 homes were sold. April’s count is almost 10 percent higher than March’s and 8.6 percent higher than April 2011.

March-to-April sales gains in San Diego County are not uncommon, but the growth this year has bested sales gains in 2011 and 2010.

Prices also rose locally. The median amount paid for a home in San Diego was $329,500, up 2.8 percent from March and up 2.4 percent from a year ago.

The UT reported that sales and prices increased last month.   Will it continue?  

Here are the April and May detached sales in North San Diego County’s coastal region:

Obviously we have two weeks’ worth of closings left in May, but because most escrows close towards the end of the month, it looks like we might be in for a big surge.

All we need are 171 more closings this month to reach 300 sales in May – and there are 184 houses marked contingent, and 481 pendings (with 174 of those marked pending prior to April 15th). And how about that pricing, around $400/sf?

A rarity here – a super custom 5,083sf house built in 2008 on 2.21 acres for only $819,000!