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SD Case-Shiller Index, Feb. 2015

SD Case Shiller Feb 2015

The January reading for San Diego was +0.71%, and we almost matched it in February with a +0.72% increase.  The year-over-year change was +4.7%.

Downer Dave said,

“Home prices continue to rise and outpace both inflation and wage gains,” said David M. Blitzer.  “The S&P/Case-Shiller National Index has seen 34 consecutive months with positive year-over-year gains; all 20 cities have shown year-over-year gains every month since the end of 2012.  While prices are certainly rebounding, only two cities – Denver and Dallas – have surpassed their housing boom peaks.

“A better sense of where home prices are can be seen by starting in January 2000, before the housing boom accelerated, and looking at real or inflation adjusted numbers.  Based on the S&P/Case-Shiller National Home Price Index, prices rose 66.8% before adjusting for inflation from January 2000 to February 2015; adjusted for inflation, this is 27.9%, or a 1.7% annual rate.

The highest price gain over the last 15 years was in Los Angeles with a 4.3% real annual rate; the lowest was Detroit with a -3.6% real annual rate (San Diego is +4.12%).  While nationally, prices are recovering, new construction of single family homes remains very weak despite low vacancy rates among both renters and owner-occupied homes.”

From cnbc:

The S&P/Case-Shiller’s 20-City Composite gained 5 percent year-over-year in February, compared with a 4.5 percent increase in January.

Denver led the gains with a 10-percent increase in home prices in the last 12 months, marking the first double-digit gain for the city since August 2013. San Francisco, where values appreciated 9.8 percent from February 2014, saw the largest acceleration in prices.

Only San Diego, Las Vegas, and Portland saw the pace of increases slow from the previous year.

This chart of annual changes shows how the frenzy has tapered off since 2013:

frenzy died down

Posted by on Apr 28, 2015 in Same-House Sales | 1 comment

Inventory Watch

The Inventory Watch should be where we’ll see any indicators of market trouble.  But today’s inventory is 6% less than a year ago, with only the $800,000 – $1,400,000 category higher (244 vs 240 listings).

A growing inventory would mean sales are slowing, but we’re selling more houses this year than last year.  In the first four months of 2014, we sold 838 NSDCC houses, and we’ve already closed 824 this year with four days to go plus late-reporters!

The 2015 average cost-per-sf is higher too: $432/sf vs. $415/sf last year.

Click on the link below for the complete NSDCC active-inventory data:

Read More

Posted by on Apr 27, 2015 in Inventory, Jim's Take on the Market, North County Coastal, Sales and Price Check | 1 comment

TDS Exempt

TDS

The phrase ‘TDS Exempt’ is seen in listing remarks – what does it mean?

TDS stands for Transfer Disclosure Statement, which is our regular form used by sellers to disclose everything they know about the property and neighborhood.

The most common example of who might be exempt from using the form are sellers who have inherited the property.  The common belief is that those sellers are exempt from disclosing, but that is not true.

All sellers are required to disclose anything they know about the property.  If they happen to be TDS Exempt, it only means they don’t have to use the form.

It doesn’t make much sense, but it is, what it is.

The form does ask probing questions to jog the memory and elicit a response, so all sellers should review it and decide if they have anything to disclose.

Agents are never exempt from disclosing what they know, or what they would find during a normal visual inspection.

Posted by on Apr 25, 2015 in Why You Should List With Jim | 0 comments

‘Coming Soon’ Effects

2015-04-24 08.31.32

Realtors aren’t known for being longheaded – they just do what they see everyone else doing.  In an industry that is virtually unregulated and has no leaders, we are left with a full assortment of real estate practices – AKA the wild, wild west.

Recently, a client called me about a house that had a ‘Coming Soon’ sign in front.  I called the phone number on the sign, and of course had to leave a message.  The listing agent did call back, and said that the home wasn’t able to be seen for two weeks.

I called my potential buyers back, and here’s what we covered:

1.  We googled the address, hoping the agent would have uploaded the listing with vivid new photos to Zillow, or perhaps we’d find it on the company website.  But no new listing was found.

I checked the address in the MLS, and found that it had been sold just a few short years ago – and previous photos were still available.  They were the typical photos, done with an instamatic camera on a dark day with lights off.  The photos mostly featured bedding fashions from 15-20 years ago.

My buyers’ initial enthusiasm started to fade.

2.  We then hit Google Maps to gather as much intel as we could from the sky.  But as usual in tract neighborhoods, it looked like there wasn’t much yard, and neighbors were close by and imposing.  By now, I could hear their high hopes flying out the window.

3.  The new list price seemed to be in line, but, as usual, our conversation steered to the six-figure gain above what the sellers paid for it.  Did they do any major improvements to warrant such a jackpot?

If the price is the same as others nearby, chances are that no improvements were made – otherwise the sellers would insist on pricing higher than everyone else.  So we came to another logical conclusion – in two weeks we are going to see virtually the same house as when the sellers bought it, at the higher price.

4.  Annoyed and disappointed, we wondered why an agent would be so casual about throwing out a ‘Coming Soon’ sign.  The frustration in the marketplace turns people into skeptics quickly, and the obvious conclusion was that the agent’s intent was to find their own buyer, and double-end the commission.

The end result? My motivated buyers talked themselves right out of buying this house.  We’ll probably check it out eventually, but we already expect to find an original-looking house with small yard surrounded by neighboring houses being offered by greedy sellers and an agent we don’t know if we can trust.

Buyers prefer to see a house right away, but are used to having to wait a bit.  Thus, the Coming Soon sign should go up 1-2 days before showings commence, not two weeks – all that does is encourage buyers to forget about it.

Posted by on Apr 24, 2015 in Jim's Take on the Market, Listing Agent Practices, Why You Should List With Jim | 4 comments

More Market Pulse

From cnbc:

http://www.cnbc.com/id/102614420

The biggest barrier to a more robust spring housing market is simply a lack of listings, and there may be even fewer than we think, at least fewer homes people want to buy.

Nearly three-quarters of the homes on the market are “stale,” which is to say that they have sat on the market for more than a month with little to no interest from buyers, according to a new report from Redfin.

The number of homes for sale rose 2 percent in March from a year ago, according to a report from the National Association of Realtors released Wednesday. That, however, includes both new listings and homes that have languished on the market for months. With demand and sales increasing, there is just a 4.6-month supply of listings; a six-month supply is considered to be a healthy market balance between buyers and sellers.

There is something else at play as well: information. With so many websites and apps pushing moment-to-moment market movement, today’s buyers are increasingly data driven. Especially after the epic housing crash that gave birth to all this data, buyer psychology and suspicion are in full swing.

“The trust is broken among buyers. In Denver and Silicon Valley, if the house has been on the market for two weeks, there is something wrong with it,” noted Nela Richardson, Redfin’s chief economist. “Everyone is afraid to overpay, and the herd behavior in the stock market is something we’re now seeing in the housing market.”

Posted by on Apr 23, 2015 in Market Buzz, Market Conditions | 1 comment

Silent Lowballs

We talk about how hot the market is, but not every seller is enjoying the benefit.  Of the 850 NSDCC houses for sale, 41% of them have been on the market for 60 days or longer – and that’s not counting those that have been ‘refreshed’.  These are ripe for a lowball offer.

But we live in a very polite marketplace, where buyers and agents alike are so concerned about offending people.  You rarely see an offer that is more than 5% under list price, and it’s because buyers just figure that the seller wouldn’t take it, so instead they keep looking.

The agents working with buyers tend to be newer agents, and they don’t want to offend any of the seasoned listing agents either.

But lowball deals happen.

Have you seen a sale close for a price well under the list, and say to yourself, “Dang, I would have paid that amount”.

It’s usually a home that has been on the market for a long time and been forgotten, usually because the seller was reluctant to lower the price.  Finally a lowball offer comes in and, well, heck – they just sign it out of frustration.

Many times the lowballer approaches the listing agent directly.  The agent, motivated by the double-commission, then has to coax the seller down in price.

The sellers, who haven’t seen any other offers and are left to their own devices, make the deal – convinced it’s all they can get.

Note to Sellers:  If you have a lowball offer on the table that you are thinking of taking, pause and take a breath.  Then lower your price to the midpoint between your current list price, and their offer price for 24 hours, to see if any other bidders emerge.

There might be some polite buyers who would be happy to pay more than the lowballer, if they only knew you might take less!

Posted by on Apr 23, 2015 in Jim's Take on the Market, Listing Agent Practices, Why You Should List With Jim | 8 comments

Market Pulse

multiple offers steady

From C.A.R.

California REALTORS® responding to C.A.R.’s March Market Pulse Survey saw slightly more multiple offers than the previous month and an increase in floor calls, listing appointments, and open house traffic.  The Market Pulse Survey is a new monthly online survey of more than 300 California REALTORS® to measure data about their last closed transaction and sentiment about business activity in their market area for the previous month and the last year.

  • In a sign of sellers pricing their homes more in line with market conditions, the percentage of properties selling above asking price dropped from its peak in March 2014 at 40 percent to 25 percent a year later. However, the share was up from the lowest point of 16 percent in February.  Nearly half of homes (48 percent) closed below asking price.
  • The premium paid over asking price declined in March, indicating sellers’ and buyers’ expectations are more in line. In March, homes that sold above asking price sold for 7.5 percent above asking price, down from 10 percent in February, and essentially flat from 7.6 percent in March 2014.
  • Homes that sold below asking price sold for 11 percent below asking price in March, unchanged from February. The number of homes that had listing price reductions dropped from 31 percent in February to 22 percent in March.
  • Sixty-three percent of properties received multiple offers in March, up from 61 percent in February but down from 74 percent a year ago.
  • The average number of offers per property in March was 2.6, unchanged from February but down from 3.2 a year ago.
  • Floor calls, listing appointments, and open house traffic were all up in March, compared to both the previous month and year, suggesting the market will continue its upswing in closed escrow sales.

Posted by on Apr 22, 2015 in Market Conditions | 0 comments