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Author Archive

Shiller on Housing

Shiller discussing who should buy a house – those who have stable employment!

Robert Shiller, an economist at Yale, won a Nobel Prize in 2013 for his analysis of asset prices, and his name is half of the much-watched Case-Shiller Index of housing prices. It turns out, he’s not too enthusiastic about home ownership, either as a lifestyle choice or an investment. Buying a house is “like a consumption choice, it’s not really an investment,” he tells Money magazine’s Susie Poppick in the video below.

Posted by on Jun 29, 2015 in Market Conditions | 4 comments

The Have-Mores

No shortage of demand for the brand new high-enders.  Here they’ve sold 100+ houses and lots already, averaging $2,000,000 or so for the houses.

If you are on the lengthy list of waiting buyers (who had to pre-qual to $2M), is time running out?  Do you opt for one of the two 1-story plans with 25-ft backyards available, or hold out for a future phase and risk getting nothing?

Posted by on Jun 28, 2015 in Bubbleinfo TV, Carmel Valley, Jim's Take on the Market | 4 comments

The Haves

I heard an interesting comment the other day on broker caravan.

The listing agent said, “Maybe we’re all undervalued?”, as he sat on his $6,000,000 listing with nobody else in attendance.

If you judge it by the weather, he could have a point.  If we have the best weather in the U.S.A., then we should have the highest-priced real estate.

It probably means that rich folks from around the world who are retiring will be giving strong consideration to the San Diego area.  Retirees are going to be drawn to where the grandkids live first, and if the ‘kids are in the general Southern California vicinity, then San Diego might be considered for retirement.

Either that is happening, and/or our employment base is stronger than ever.

Two days ago, we saw that the NSDCC sales this year between January 1st and June 15th were 7% higher than last year.

NSDCC is the coastal area between La Jolla and Carlsbad that has a population of around 300,000 people.  Carlsbad makes up about a third of the population and sales in the area, and realtors and buyers alike consider it a quality lower-priced alternative to the affluent Encinitas-La Jolla stretch.

Here is the breakdown of those January 1st-June 15th sales:

Category by Area
2014
2015
% chg
Carlsbad # of New Listings
812
868
+7%
Carlsbad # of Closed Sales
462
493
+7%
Carlsbad Median SP
$769,500
$800,000
+4%
La Jolla-Enc # of New Listings
1,660
1,631
-2%
La Jolla-Enc # of Closed Sales
797
859
+8%
La Jolla-Enc Median SP
$1,300,000
$1,375,000
+6%

The number of sales in Carlsbad corresponded with a similar increase in listings.  But look at the higher end market – the year-over-year sales were 8% higher, in spite of 2% fewer listings!  The median price increased nicely too.

This is an affluent area, and real estate is booming – could it be undervalued?

Posted by on Jun 26, 2015 in Jim's Take on the Market, North County Coastal, Sales and Price Check | 6 comments

Underpricing on Purpose

From sfgate.com:

http://www.sfchronicle.com/business/networth/article/SF-home-buying-insanity-means-paying-1-6347687.php

Bravo’s reality show “Million Dollar Listing San Francisco” debuts July 8, but I already have an idea for a spinoff — “Million Dollar Over Listing.” It would feature homes in the Bay Area that sold for at least $1 million more than the list price.

There were at least 10 such sales in San Francisco over the past year, 14 in Santa Clara County and five in San Mateo County, according to Multiple Listing Service data. They ranged from teardowns to mansions.

A home at 178 Sea Cliff Ave. in San Francisco, for example, sold in April for $11 million, which was $4.7 million or 75 percent over the $6,298,000 list price.

Patrick Carlisle, chief market analyst with Paragon Real Estate Group, chalks it up to the “general insanity of the overheated market,” which stems mainly from demand outstripping a long period of below-average inventory. In addition, “many agents have adopted a strategy of egregious underpricing,” he said.

In San Francisco especially, underpricing is so prevalent that most buyers search for homes well below their target price, knowing the sale price will be much higher.

“If you price (a home) where it should be, it will sit,” said Realtor Alan Canas.

Canas represented the sellers of a home at 44 Everson St. in San Francisco’s Glen Park neighborhood. The four-bedroom, four-bathroom home was somewhat dated but had magnificent views, which were hard to value.

Canas priced it at $1.8 million in October, expecting it would sell for $2.3 million to $2.4 million.

“The offers we received, it was shocking,” he said. He made counter offers to the two highest — $2.65 million and $2.725 million — asking them to come up to $2.8 million. “One jumped, the other jumped too late,” he said.

What if he had listed it closer to his expected price? “If we had priced it at $2.2 million, I honestly don’t think it would have seen the play (it got) at $1.8 million,” Canas said. “It’s psychological, almost a game.”

The top two offers were both all cash, which is good because if the buyer had needed a loan, “I don’t think it would ever appraise at $2.8 million,” he said.

Read full article here:

http://www.sfchronicle.com/business/networth/article/SF-home-buying-insanity-means-paying-1-6347687.php

Posted by on Jun 25, 2015 in Bidding Wars, Jim's Take on the Market, Listing Agent Practices, Market Buzz, Market Conditions | 0 comments

Local Trends

SD pricing June 2015

Have you seen how some of the list prices have gone ballistic lately?

You can see above how the red ‘Sold’ price-per-sf trend line has been increasing moderately, but the 90-day average list pricing has taken off over the last few months (in blue).

What is causing the recent enthusiasm among sellers?

The inventory is still low – lower than last year.  But there are more sales happening in 2015, in spite of fewer choices and higher prices!

These are San Diego charts, but the same in true in NSDCC, where we had 1,259 sales between January 1st and June 15, 2014, and this year there were 1,349 sales – which is a 7% increase in NSDCC sales year-over-year.

In 2013 we had 1,497 sales.

Here are the active listings and sales counts below:

SD Inventory 2015

Though this chart doesn’t show all of 2013, it is incredible to see that today’s inventory is back around those levels when we were in the full frenzy!

It’s a slightly different mix – we’ve had fewer NSDCC listings this year than in 2013.  But the frenzy fever looks very similar on paper!

How long can it last?  Have you seen an occasional neighborhood that has for-sale signs piling up?  Coastal tract houses in the $1M to $2M range are particular susceptible.  There are 367 houses for sale in that range currently, which isn’t exactly panic time, because there were 127 that closed in the last 30 days!

But those were the plums – the best available. What happens to the rest?

I know it seems like summer just started, and we’ll probably keep getting enough happy news to keep the party rolling (like Case-Shiller next Tuesday).

But those are reflecting ancient history now.  By the time we get to August, the inventory will be so picked over that we should hit stall speed!

Get Good Help!

Posted by on Jun 24, 2015 in Jim's Take on the Market, Market Buzz, Market Conditions, North County Coastal, Sales and Price Check | 1 comment