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Category Archive: ‘Builders’

SD Middle-Class Housing Crisis

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The building industry is selling more new homes, but their focus is on the higher-end markets, and not much is happening for the middle class.

KPBS found a guy to whine about it on camera; but it’s a free market, and rich people are winning. It’s not going to change – what can government do?

Hat tip to daytrip for sending this in!

http://www.kpbs.org/news/2016/aug/08/housing-crisis-squeezes-middle-class/

Homeowners in San Diego County may not feel it, but a housing crisis is underway in the region, and the middle class is especially hard squeezed.

Longtime Escondido resident Guy Chandler faced a situation that may be all too familiar to many San Diego families. He described what happened at a recent San Diego County Board of Supervisors’ meeting.

“Probably the worst day of my life was in June 2015,” Chandler said. “My daughter, Jenelle, 37 years old, came to me and told me, ‘Dad, sit down. There’s something you’re not going to like. We have to move out of San Diego County.’”

Chandler’s daughter told him she was planning to take her family and move to another state because she couldn’t find a house in San Diego where she could afford to raise her kids.

“The next two days a lot of hand-wringing and crying went on,” Chandler said.

He now communicates with his grandchildren on the web via FaceTime.

“What’s my point?” he asked the board. “My point is, droves of young families are leaving the state of California because they can’t afford to live here.”

Posted by on Aug 16, 2016 in Boomers, Builders, Jim's Take on the Market, Market Buzz, The Future | 5 comments

Home Evolution

Great article from our friends at jbrec:
https://www.realestateconsulting.com/starter-home-solutions-expensive-markets/

High land prices in good locations generally force builders to build expensive homes. However, a number of builders have figured out how to build and sell entry-level homes to a growing demographic group. Builders are capitalizing on the rising number of affluent first-time buyers. These buyers tend to be dual-income, college-educated buyers with 10+ years of work experience who have delayed having children in comparison to their parents. For example, 23% of married couples had college degrees in 2014, compared to just 12% in 1990.  Below is our forecast by age group for 5.2 million more homeowners over the next decade.

jb

Many of our clients have identified fantastic solutions to address the demand of this growing demographic. Knowing exactly what this buyer wants and building the right product in the right location is crucial for success. Here are a few solutions:

  • High-density detached can work well. There are many detached products (with private outdoor spaces) achieving 16+ du/acre. Detached homes are generally more desirable for young families and allow for lower HOA dues.
  • Smaller homes. With good design, homes do not need to be large. Entry buyers will trade off size (to some extent) for location and lifestyle.
  • Three-story homes can live well for families—if done correctly. The layout must be open and allow for lots of light. Consider rooftop decks in lieu of private backyards.
  • Energy efficiency can save buyers hundreds or thousands of dollars per year, helping them choose a new home over a resale. Being green can save the homeowner a lot of money. Be sure to include this as a standard feature and market it.
  • More sales success has been achieved at prices below the FHA loan limit. FHA’s low-down-payment options appeal to many buyers.
  • Private outdoor space is crucial. These spaces do not have to be large, just functional. Consider pocket yards, side yards, and rooftop decks.
  • Minimize homeowners association dues and infrastructure bond payments.  Entry buyers are payment sensitive and will usually trade a lower monthly payment for fewer community amenities, especially if the community is walkable to shops, restaurants, and entertainment.

https://www.realestateconsulting.com/starter-home-solutions-expensive-markets/

Posted by on Aug 9, 2016 in Builders, Thinking of Buying? | 0 comments

New-Home Sales Rise

If this sort of good news holds up, look forward to the Fed bumping their rate again. Mortgage rates have come down since the last Fed hike!

From MND:

http://www.mortgagenewsdaily.com/05242016_new_home_sales.asp

New home sales surged in April after a disappointing report in March.  The Census Bureau and the Department of Housing and Urban Development said today that sales were at a seasonally adjusted annual rate of 619,000, an increase of 16.6 percent from the previous month and 23.8 percent higher than in April 2015.  That said, it should be noted that this report has a notoriously high margin of error, with this month’s ringing in at 15.4 percent.

Sales in March were also higher than earlier reported.  Last month’s report had those sales down from February by 1.5 percent to a seasonally an annual rate of 511,000.  That number

On a non-seasonally adjusted basis there were 61,000 newly adjusted homes sold during the month.  In March sales totaled 50,000.

At the end of the reporting period there were an estimated 243,000 new homes for sale nationwide.  This is estimated at a 4.7-month supply at the current rate of sales, down from 5.5-months in March.

The median price of a new home sold in April was $321,100 compared to $292,700 a year earlier.  The average sales price was $379,800 compared to $334,700 in April 2015.

The Mortgage Bankers Association, based on the numbers of applications submitted to the mortgage subsidiaries of new home builders, had predicted sales to decline 11 percent from March.  On a non-seasonally adjusted basis they had projected sales at 48,000 units, down from 54,000 units in March.

Sales in the Northeast were up 52.8 percent from March and an astounding 323.1 percent from the previous year. Sales in the Midwest declined by 4.8 percent and 9.1 percent from the two earlier periods.

Sales of new homes in the South rose 15.8 percent from March and 18.1 percent year-over-year.  The West saw sales increase by 18.8 percent month-over-month and 23.6 percent for the year.

Posted by on May 24, 2016 in Builders, Interest Rates/Loan Limits, Jim's Take on the Market | 1 comment

How to Throttle Prices

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Millienials – or anyone feeling priced out – really should support permissive housing policy to help keep a throttle on prices.  Here’s evidence showing that faster-growing cities have more-modest price increases, although this chart is older (prices over last 5 years have been straight up). Thanks Ollie!

http://blogs.wsj.com/economics/2016/04/18/why-the-great-divide-is-growing-between-affordable-and-expensive-u-s-cities/

Across the country, a divide is emerging between cities that are growing outward and remaining affordable and ones that are hemmed in by geography and onerous zoning codes and are becoming  more and more expensive.

As a whole, U.S. cities are expanding as rapidly as they have throughout the last half-century. From the 1950s until the 2000s they have added about 10,000 square miles per decade, or an area roughly the size of Massachusetts, according to research by Issi Romem, chief economist at real-estate site BuildZoom, to be released Monday. But beneath the surface a divide is deepening.

On the one side are cities such as San Francisco, Boston, New York and Miami that have slowed their pace of expansion dramatically since the 1970s, in part as they have added layer upon layer of building regulations. On the other side are cities concentrated in the southeast and Texas, which have grown outward and seen much slower price growth.

The developed residential area in Atlanta, for example, grew by 208% from 1980 to 2010 and real home values grew by 14%. In contrast, in the San Francisco-San Jose area, developed residential land grew by just 30%, while homes values grew by 188%.

The developed residential area in Raleigh, N.C., grew by 219% in the same period, while home values grew by 27%. In Seattle, the developed area grew by 69%, while home values grew by 119%.

Mr. Romem draws the distinction succinctly: expansive cities versus expensive cities.

“If you don’t let the city grow, you’re going to get prices going upward…and see the middle class being pushed out,” Mr. Romem said.

Read full article here:

http://blogs.wsj.com/economics/2016/04/18/why-the-great-divide-is-growing-between-affordable-and-expensive-u-s-cities/

Posted by on Apr 18, 2016 in Boomers, Builders, Jim's Take on the Market, The Future | 2 comments

New One-Story Homes

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People suggest that if you want more value, just go out to the ‘burbs.  But how far out do you have to go to buy a new one-story house on a 1/2 acre lot with good schools in the $700,000s and $800,000s?

Pulte, California West, Shea Homes, Pardee, and Davidson all have new-home communities being built, or coming soon to the 76 corridor area between North Vista and Fallbrook:


Posted by on Jan 4, 2016 in Bubbleinfo TV, Builders, Jim's Take on the Market, One-Story | 3 comments

Golf Courses in Transition

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A story with great examples of golf courses being closed across the country, and many being turned into real estate developments.

From the nytimes.com:

BOCA RATON, Fla. — Weeds, crabgrass and fallen palm fronds cover the wildly overgrown greens of what was once the Mizner Trail Golf Club, its decrepit state emblematic of the fate of hundreds of golf courses around the country, many of them derisively known as “rabbit patches” or “goat farms.”

A short drive away, however, perspiring construction workers in yellow vests swarmed on a recent afternoon over the emerging structure of a 150,000-square-foot activities center, part of a $50 million renovation of the 44-year-old Boca West Country Club, home to some 6,000 residents, where fairways are newly planted and houses sell for as much as $5 million.

With the winter golf season beginning in Florida — the nation’s leader in golf courses with more than 1,000 — the extremes of failure and success point to a nationwide upheaval in the sport. It was booming when players like Tiger Woods reigned, but has since been roiled by changing tastes and economics, an aging population of players, and the vagaries of the millennial generation’s evolving pastimes.

There are about four million fewer players in the United States than there were a decade ago, according to the National Golf Foundation. Almost 650 18-hole golf courses have closed since 2006, the group says. In 2013 alone, 158 golf courses closed and just 14 opened, the eighth consecutive year that closures outpaced openings. Between 130 and 160 courses are closing every 12 months, a trend that the foundation predicts will continue “for the next few years.”

Dozens of private and public golf courses here in South Florida, and hundreds around the country, are in transition. Some courses have sought bankruptcy protection, while others have slipped into foreclosure. Many are under construction, with single-family homes and condominiums going up on land once dotted only with pin flags, sand traps and water hazards. Others have gone to seed as they await resolution of legal and zoning disputes.

Read full article here:

http://www.nytimes.com/2015/11/25/realestate/commercial/fewer-golfers-but-some-lush-courses-are-booming.html

Posted by on Dec 16, 2015 in Builders, Jim's Take on the Market, Real Estate Investing, REOs | 1 comment

Inventory Watch

San Diego affordability

New homes and resales used to offer about the same median price and affordability in San Diego.  But over the last few years, new-home pricing has jumped up substantially, eliminating some of the quality choices for buyers and delivering more demand to the resale market.

Read full report on the SD home-building market here:

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

Read More

Posted by on Dec 7, 2015 in Builders, Inventory, Jim's Take on the Market | 0 comments