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Jim Klinge
Cell/Text: (858) 997-3801
701 Palomar Airport Road, Suite 300
Carlsbad, CA 92011

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Home Buyer Competition

What today’s home buyers are up against……from

Driven by frustrated buyers who rolled over from last year and record-breaking lows in housing inventory, the 2018 spring buying season is expected to be one of the most competitive in years—but buyers are still optimistic about getting into their dream home, according to a survey conducted for®.

“We’re only a few weeks into March and already seeing the market heat up,” said Danielle Hale, chief economist for®, in a statement. “Holdover buyers hoping for greener pastures this spring are likely to find sparse options that require them to pay top dollar or make other concessions.”

And those holdover buyers are driving a large portion of the demand, according to an online survey of more than 1,000 active buyers conducted in early March by Toluna Research.

The home search has dragged on for more than seven months for 40% of respondents, the survey showed, while 34% have been searching for 4-6 months. About a quarter have been in the market for three months or less.

More than one-third, or 35%, of those surveyed indicated they anticipate “a lot of competition” this spring.

Perhaps because of that, buyers are thinking strategically about turbocharging their home search and getting an edge on the competition.

When asked how they are trying to get ahead, 42% of respondents revealed they are checking listing websites every day, while 40% plan to put more than 20% cash down. The survey also revealed that 33% are setting price alerts, 31% plan to put down a larger earnest money deposit, and 26% are willing to offer above asking price. Only 6% indicated they are not planning to use any special tactics to cope with competition.

“The majority of buyers are aware of the tough competition they’re up against this spring. Having been in the market awhile, they’ve likely lost a few homes to better offers, which has given them more time to save and up their bidding strategies,” said Hale.

Link to Article

Posted by on Mar 22, 2018 in Bidding Wars, Jim's Take on the Market, Market Buzz, Thinking of Buying?, Why You Should Hire Jim as your Buyer's Agent | 0 comments

Higher Rates and Impact on Home Prices

Could the supply of homes-for-sale get any tighter?  Freddie Mac thinks so:

Recently, Freddie Mac published a report titled Nowhere to go but up? How increasing mortgage rates could affect housing. The report focused on the impact the projected rise in mortgage rates might have on the housing market this year.

Many believe that an increase in mortgage rates will cause a slowdown in purchases which would, in turn, lead to a fall in house values. Ultimately, however, prices are determined by supply and demand and while rising mortgage rates may slow demand, they also affect supply. From the report:

 “For current homeowners, the decision to buy a new home is typically linked to their decision to sell their current home… Because of this link, the financing costs of the existing mortgage are part of the homeowner’s decision of whether and when to move.

Once financing costs for a new mortgage rise above the rate borrowers are paying for their current mortgage, borrowers would have to give up below-market financing to sell their home.  Instead, they may choose to delay both the sale of their existing home and the purchase of a new home to maintain the advantageous financing.

The Freddie Mac report, in acknowledging this situation, concluded that prices are not adversely impacted by higher mortgage rates. They explained:

“While there is a drop in the demand for homes, there is an associated drop in the supply of homes from the link between the selling and buying decisions. As both supply and demand move together in this way they have offsetting effects on price—lower demand decreases price and lower supply increases price.

They went on to reveal that the Freddie Mac National House Price Index is…

“…unresponsive to movements in interest rates. In the current housing market, the driving force behind the increase in prices is a low supply of both new and existing homes combined with historically low rates. As mortgage rates increase, the demand for home purchases will likely remain strong relative to the constrained supply and continue to put upward pressure on home prices.”

Link to Article

Posted by on Mar 22, 2018 in Interest Rates/Loan Limits, Jim's Take on the Market, Market Buzz | 1 comment

Charlie Quintana, RIP

Charlie Quintana, the heralded drummer for the Plugz, Social Distortion, and Izzy Stradlin & the Ju Ju Hounds (plus he toured and/or recorded with Joan Osborne, John Doe, Cracker, and Bob Dylan), unfortunately passed away last week.  He had a heart attack at age 56.

Of his collaborators, Bob Dylan might be the most curious.  Here’s Charlie playing drums with Bob – who is as fired up as I’ve ever seen him:

Posted by on Mar 21, 2018 in Jim's Take on the Market, Wednesday Rock Blogging | 2 comments

Mortgage Rates Hold After Fed Speech

Mortgage rates were jittery but ended up back where they started today.

From MND:

Mortgage rates rose to new 4-year highs this morning as lenders took a defensive stance ahead of the afternoon’s Fed Announcement.  The caution proved to be warranted, at least at first, as bond markets reacted negatively to the first phase of Fed-related information.

Notably, the Fed Announcement itself wasn’t the issue.  If anything, it was moderately friendly for rates.  Instead, it was the Fed’s rate hike outlook (released concurrently with the policy announcement) that did the damage.  But again, we’re talking about underlying bond markets here.  Lenders’ rate sheets already reflected that damage preemptively.

When new Fed Chair Jerome Powell began his press conference half an hour later, bond markets (which underlie rates) began to improve.

Just over an hour after the initial drama, bonds moved into moderately positive territory on the day and most lenders offered positively-revised rate sheets (i.e. stronger bond markets allowed mortgage lenders to drop their rates).  After those reprices, the average lender returned in line with yesterday’s rates (which are still pretty close to 4-year highs, but a welcome sight after this morning’s offerings).

Link to Article

Posted by on Mar 21, 2018 in Interest Rates/Loan Limits, Jim's Take on the Market | 0 comments

More Inventory?

Hat tip to daytrip who sent in this article on housing inventory growth, which appears to be growing nationwide, at least in the higher-end markets:

Homebuyers in the U.S. have plenty to grouse about these days. Prices have climbed steeply in many metro areas, mortgage rates are rising and inventory is thin. But for people looking to purchase their first home, it’s ugly out there.

“Starter homes have become scarcer, pricier, smaller, older and more likely in need of some TLC” than they were six years ago, the real estate website Trulia reported Wednesday after analyzing housing stock across the country. Trulia began tracking prices and inventory in 2012.

It’s grim all over. American homes are at their least affordable in the report’s history. But the median listing price of available starter homes has risen 9.6 percent in the past year, easily beating out the trade-up and premium categories, while starter-home supply has fallen to a new low this quarter, Trulia reported.

Link to Article

How are we doing locally?

Here are the number of new listings between Carlsbad and La Jolla that hit the MLS between January 1st and March 15th – there will be a few stragglers to add to this year’s count:

NSDCC Detached-Home Listings Between Jan 1 – March 15

Price Range
Under $1M
$1M to $1.5M
$1.5M to $2M
Over $2M
Closed Sales

If there were some breakout numbers here, I’d be concerned that a flood of inventory could cool off the market quickly. The only thing close is the $2M+ inventory being 10% higher than last year – but it’s less than 2016, and prices have gone up since then, so not a big deal.

The lower-end listings have really dried up – houses for sale that are listed under $1,000,000 have shrunk 39% since 2016.

Posted by on Mar 21, 2018 in Inventory, Jim's Take on the Market, Market Buzz | 1 comment

Leaving California

If enough people see this…..maybe more will leave? I can help you with that!


Californians may still love the beautiful weather and beaches, but more and more they are fed up with the high housing costs and taxes and deciding to flee to lower-cost states such as Nevada, Arizona and Texas.

“There’s nowhere in the United States that you can find better weather than here,” said Dave Senser, who lives on a fixed income near San Luis Obispo, California, and now plans to move to Las Vegas. “Rents here are crazy, if you can find a place, and they’re going to tax us to death. That’s what it feels like. At least in Nevada they don’t have a state income tax. And every little bit helps.”

Senser, 65, who previously lived in the east San Francisco Bay region, said housing costs and gas prices are “significantly lower in Las Vegas. The government in the state of California isn’t helping people like myself. That’s why people are running out of this state now.”

Based on the U.S. Census Bureau’s American Community Survey data, “lower income Californians are the ones who are leaving, not higher income,” said Christopher Thornberg, founding partner of research and consulting firm Beacon Economics in Los Angeles.

He said housing is the chief reason people are leaving California, pointing out there are frequently bidding wars for what limited inventory of homes is available.

USC Dornsife/Los Angeles Times Poll of Californians last fall found that the high cost of living, including housing, was the most important issue facing the state. It also found more than half of Californians wanted to repeal the state’s new gas tax, which raised fees by 40 percent.

“The rate at which California has been losing people to other states has accelerated in the past couple of years, in part because of rising housing costs,” said Jed Kolko, chief economist with employment website

Link to Article

Posted by on Mar 20, 2018 in Bidding Wars, Jim's Take on the Market, Market Buzz | 11 comments