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Inventory Watch – Bloated w/OPTs

The inventory count hasn’t dropped much.  Last year the number of houses for sale declined 7.2% between September 2 and October 28 as sellers checked out for the holidays.  This year it has only dropped 2.6%.

With more sellers waiting longer before canceling their listing for the holidays, it might make you think that they must be ‘motivated’, but it is the opposite – if their price was right, they would have sold by now.

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
Oct 6
130
$367/sf
48
0sf
Oct 13
131
$378/sf
44
0sf
Oct 20
130
$385/sf
45
0sf

Read More

Posted by on Oct 20, 2014 in Inventory, Jim's Take on the Market | 4 comments

McTeardowns

teardowns

From our friend Karen at BloombergBusinessweek:

http://www.businessweek.com/articles/2014-10-15/chinese-home-buying-binge-transforms-california-suburb-arcadia

“Oh, hey! How ya’ doin’?” Raleigh Ornelas hollers, leaning out the window of his spotless white pickup truck. He’s recognized the man across the street, a developer standing in front of a Tuscan-style mansion under construction. “Where have you been hiding at? I call you, you don’t call me.”

Ornelas is an informal broker in Arcadia, Calif., a Los Angeles suburb at the foot of the San Gabriel mountains. He’s been keeping an eye out for the builder, an Asian man with a slight comb-over who goes by Mark. Ornelas has found two older homeowners who’ve finally agreed to sell their properties, and he knows that Mark, like all developers here, needs land on which to build mansions for an influx of rich clients from mainland China.

Ornelas rattles off addresses on a nearby street. “Three-eleven, that guy, he’s wack,” he says, shaking his head. “He wants 2.8.” He means million dollars. “And then 354, they want $2 million.”

The lot is 17,000 square feet. “Seventeen for 2 mil?” Mark asks, incredulous.

“I know,” Ornelas says. “They’re going crazy.”

A year ago the property would have gone for $1.3 million, but Arcadia is booming. Residents have become used to postcards offering immediate, all-cash deals for their property and watching as 8,000-square-foot homes go up next door to their modest split levels. For buyers from mainland China, Arcadia offers excellent schools, large lots with lenient building codes, and a place to park their money beyond the reach of the Chinese government.

The city, population 57,600, projects that about 150 older homes—53 percent more than normal—will be torn down this year and replaced with mansions. The deals happen fast and are rarely listed publicly. Often, the first indication that a megahouse is coming next door is when the lawn turns brown. That means the neighbor has stopped watering and green construction netting is about to go up.

This flood of money, arriving from China despite strict currency controls, has helped the city build a $20 million high school performing arts center and the local Mercedes dealership expand. “Thank God for them coming over here,” says Peggy Fong Chen, a broker in Arcadia for many years. “They saved our recession.” The new residents are from China’s rising millionaire class—entrepreneurs who’ve made fortunes building railroads in Tibet, converting bioenergy in Beijing, and developing real estate in Chongqing. One co-owner of a $6.5 million house is a 19-year-old college student, the daughter of the chief executive of a company the state controls.

Read full story here:

http://www.businessweek.com/articles/2014-10-15/chinese-home-buying-binge-transforms-california-suburb-arcadia

Posted by on Oct 19, 2014 in Market Buzz, Market Conditions, The Future, This Is America | 4 comments

Most Expensive Cities

Folks had something to say about Washington D.C. being the most expensive – Susie wanted to make sure Honolulu was considered, and so did the WSJ.com:

http://blogs.wsj.com/economics/2014/10/14/no-washington-dc-is-not-more-expensive-than-new-york-city/

SD still expensive

As it happens, the Department of Commerce directly measures price levels for different regions. These price levels are the average prices paid by consumers for the things they consume. That’s probably what most people mean when they say a place is expensive.

These data show that the most expensive region in the U.S. is Honolulu, followed by New York. The D.C. area is seventh.

The Council for Community and Economic Research produces an index measuring the cost of housing, utilities, grocery items, transportation, health care and goods and services. This is pretty close to the concept people are curious about when they want to know how expensive different cities are. It scores Manhattan as 117% more expensive than most cities (more than double) and Brooklyn 67% more expensive. D.C. is only 38% more expensive, according to their rankings.

CCER

Posted by on Oct 18, 2014 in Market Conditions | 3 comments

Zillow Domination

zillow on the move

Zillow is having a two-day bash in Las Vegas for its Premier Agents, and 1,000 of the 60,000 PAs are attending.  It will take a miracle for realtor.com to get back in the game now – look at how Zillow is pulling away:

http://www.geekwire.com/2014/zillow-hosts-first-national-conference-important-day-zillow-history/

Zillow Chief Marketing Officer Amy Bohutinsky reiterated Zillow’s commitment to mass-market advertising, particularly TV advertising, stating that they’re on track to spend $75 million this year to build an “enduring brand that resonates with consumers, their children and their grandchildren for years to come.”

Before their TV campaign started 18 months ago, Bohutinsky said that one-third of visits to a real estate website started with Zillow. Today, that number is 50 percent, largely as a result of their TV exposure.

Is News Corp and realtor.com going to spend $100,000,000 per year on TV advertising to get back in the fight? If so, they better start spending it today!

zillow for the kill

Posted by on Oct 17, 2014 in Jim's Take on the Market, The Future | 0 comments

2015 California Housing Forecast

2015 forecast

C.A.R. released their 2015 forecast:

http://www.car.org/newsstand/newsreleases/2014releases/859066?view=Standard

The California median home price is forecast to increase 5.2 percent to $478,700 in 2015, following a projected 11.8 percent increase in 2014 to $455,000.  This is the slowest rate of price appreciation in four years.

“With the U.S. economy expected to grow more robustly than it has in the past five years and housing inventory continuing to improve, California housing sales and prices will see a modest upward trend in 2015,” said C.A.R. Vice President and Chief Economist Leslie Appleton-Young. “While the Fed will likely end its quantitative easing program by the end of this year, it has had minimal impact on interest rates, which should only inch up slightly and remain low throughout 2015.  This should help moderate the decline in housing affordability we saw occur over the past two years.”

“Additionally, the state will continue to see a bifurcated market, with the San Francisco Bay Area outperforming other regions, thanks to a more vigorous job market and tighter housing supply.”

They are projecting an 8.2% decline in sales this year – and they think sales AND prices will rise next year in spite of their expectations of higher rates and less affordability?

Their own graph shows pendings on a YoY downward trend for two years:

pending home sales

An improving economy next year – if it improves – probably won’t change the momentum of flatline pricing we have experienced over the last few months.   The only thing that could directly and positively impact sales and pricing will be mortgage rates in the 3s – hope they stick!

Posted by on Oct 16, 2014 in Forecasts | 5 comments

The James Harman Band

James Harman and Those Dangerous Gentlemen were red hot in the early 1980s when Hollywood Fats and Kid Ramos were playing guitar. Unfortunately, Fats died of a heroin overdose in 1986, but the band carries on! (he starts around the 1:50-min. mark):


Posted by on Oct 15, 2014 in Wednesday Rock Blogging | 0 comments