The convention is complete, NewsCorp has purchased Move Inc./realtor.com, and we have a new president! Chris has been on the Board of Directors since 2002, participated on several national committees, and is still an active agent too. He’s been waiting and planning for this moment for years - here are the goals for his presidency:
We’ve doubled the number of negative readings of the local Case-Shiller Index, and they are picking up steam!
But seriously, any monthly change of less than 1% just means prices are stagnant, and in San Diego it’s been like that since the April reading. If prices were flat during the prime selling season, we’re probably fortunate that they’ve held up this long.
Economist Robert Shiller told CNBC’s “Squawk on the Street” the reading was not exciting, and he noted that the winter season is historically slow for home sales. ”We haven’t expected exciting growth for a while, but it does look like seasonally adjusted home prices are still growing,” he said.
These are the Case-Shiller Index NSA changes below for San Diego:
Hat tip to daytrip for sending in this latimes.com article about the surge of high-end home sales across the Southland:
Luxury home sales in Southern California are hitting levels not seen in decades. The number of homes bought for $2 million or more in recent months is the highest on record. Sales worth $10 million or more are on pace this year to double their number from the heights of the housing bubble.
“It’s pretty mind-blowing, to be honest,” said Cindy Ambuehl, an agent with the Partners Trust in Brentwood. “The luxury market has been completely on fire.”
Low interest rates, a strong stock market and waves of cash sloshing in from overseas are boosting demand for high-dollar homes. A record 1,436 homes worth $2 million or more were sold in the six-county Southland in the second quarter, according to CoreLogic DataQuick.
How are we doing locally? It’s worth noting that the supply of higher-end homes has been surging too (assuming the ‘refreshing’ of listings has been fairly constant over the years).
Below you can see how the market has been shifting upward:
NSDCC Detached Homes Listed/Sold By Price Range
|2011 New Listings/Solds|
|2012 New Listings/Solds|
|2013 New Listings/Solds|
|2014 New Listings/Solds|
These are 12-month stats so you need to extrapolate to compare 2014 accurately (add about 10% to these current counts). You can see how the Under-$1M folks have been left shaking their head – they have about a third fewer homes to consider since 2011!
This is the 52nd week of logging the inventory under this format, so you can reflect back to a year ago and compare how we’re doing. Today’s numbers are similar to 2013 – here is a summary of the late-November comparison:
|$1.4M – $2.4M|
At least those who haven’t bought yet can say they didn’t lose any ground in 2014. Expect their resolve to stand firm in 2015.
The UNDER-$800,000 Market:
Zillow has refined their forecast of local ZHVIs over the next year. The Zillow Home Value Index results have tracked the Case-Shiller Index closely, and are probably as good as any crystal ball in predicting the future.
These are the predicted changes in the ZHVI by October 31, 2015:
The Case-Shiller Index for September will be released on Tuesday, and Zillow is predicting that the non-seasonally-adjusted numbers (which are the ones publicized) will be negative:
The media will be using words like ‘fragile’, and ‘struggling’ to describe the real estate market, and we’ll probably hear calls for more intervention.
But the market is supposed to go up and down; that’s why they call it a ‘real estate market’, and not a ‘real estate guarantee’. The history of real estate has followed a ten-year pattern (which it did until Angelo’s creative financing skewed the timeline), which means we are due for at least a plateau. The local trough was April, 2009, and we’ve been flat for at least six months.
Our market is fine – you will still be able to sell your house next year for more money than it has ever been worth. We’ll still see bidding wars and OPTs. Just don’t buy the media’s version that the sky is falling just because prices aren’t going up constantly.
More forecasts here:
These guys run a true boiler room, with all the classic tricks. They have different people calling me regularly with specials, upsells, takeaways etc., with the loud clamoring of other salespeople in the background. One caller told me that he has 400 agents (used to be 600) so they have to be on auto-dialers too, which aren’t conducive to taking breaks.
So there’s no surprise to see this:
The number one online real estate website is facing a $5 million class action lawsuit for intimidating employees to skip meals and work long hours without pay.
Former sales representative Ian Freeman filed a lawsuit Wednesday on behalf of he and his coworkers, accusing Zillow of “exploiting and intimidating its employees to miss meal breaks, rest breaks, and work overtime without compensation,” the complaint states.
Beyond working long hours, Freeman and other plaintiffs assert Zillow altered employees’ time sheets to show that they worked from 8:00 a.m. to 4:00 p.m. Employees were pressured to clock in early and stay late, often through legally designated meal or rest periods, but only paid for working an eight-hour work day, according to the suit.
Seniors can have trouble qualifying for a mortgage, in spite of having ample assets. Here are some tips, from the wsj.com (their comments are good too):
High-net-worth individuals often will argue that they clearly have enough money in assets to pay off a loan at any time, says Bill Banfield, vice president at Quicken Loans. “They may be thinking that they have a big IRA and they could use that to take a distribution to make the loan payments,” he adds. “That’s all good and fine, but we’d like to see that all set up before they apply for the loan.”
The key to qualifying is to demonstrate that a retiree’s assets translate into income via tax returns, bank statements and other documents, he adds. “The lender is going to want to make sure you have receipts for distributions and a schedule for receiving them,” he adds.
Retirees also need to show proof that the payments will continue in the same amounts for at least three years into the future, Mr. Banfield says. If a borrower is an early retiree under 59½ years old, the threshold for taking withdrawals from IRAs without tax penalties, the lender will adjust income estimates accordingly, he adds.
For retirees who don’t want to increase their distributions, another possible option is a nonqualified jumbo mortgage, which offers flexibility on the federal DTI rule, Mr. Wind says. Lenders have to waive liability protection to issue nonqualified mortgages, but some lenders will take that risk with retirees who have substantial invested assets they don’t want to liquidate, he adds.
To calculate an income estimate in such cases, EverBank will assign a conservative earnings rate to the total dollar amount of the assets and amortize the amount to the loan’s term length, Mr. Wind says. Wells Fargo uses a similar method to calculate DTI for nonqualified mortgages for borrowers with multimillions of dollars in assets, Mr. Blackwell says.
The first step for any retiree or person approaching retirement is a financial adviser, Mr. Blackwell says. An adviser can look at a retiree’s overall financial picture and advise whether to pay cash or borrow when buying as home. The adviser can also calculate retirement-account distributions that will help the borrower qualify for a loan, he adds.
U.S. home resales jumped to their highest level in more than a year in October and outpaced the sales level a year ago for the first time in 2014, further evidence the housing market is on a recovery path.
The National Association of Realtors (NAR) on Thursday said existing home sales rose 1.5 percent to an annual rate of 5.26 million units, the highest rate since September of last year. Sales rose 2.5 percent compared to a year ago, the first time since October 2013 that nesales have risen above the prior-year levels.
Economists polled by Reuters had forecast sales falling to a 5.16 million-unit pace, from an upwardly revised rate of 5.18 million units in September.
“This is the first time in the year where we have seen a year over year annual gain, which means that existing home sales have made that successful U-turn,” Lawrence Yun, NAR’s chief economist, told reporters.
I thought things were going pretty good nationally, and if we could get looser credit then everything would be fine. Now I guess a ’successful U-turn’ means….good or bad?
Yunnie deserves a break; he has done a much better job than David Lereah. In July, Yun did say that he expected a slight uptick in sales during the second half of the year:
Locally this year we haven’t beat any of last year’s monthly sales counts. Here are the NSDCC Detached-Home Sales for 2013 and 2014:
Last year was so hot due to low rates and prices that it’s doubtful we will see those numbers anytime soon. But we have been close enough!