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Category Archive: ‘Frenzy’

Freeze-Dried Frenzy

The market is sizzling, and it could kick up to another level if there were just more homes to sell! Here is a comparison of today’s inventory to previous years (the lower-end is selling fast!):

NSDCC Active Inventory – Second Week of April

Year
$0-$800K
$800K-$1400K
$1400-$2400K
$2400K+
Total
2014
97
233
233
349
912
2015
65
220
218
346
849
2016
37
235
260
447
979
2017
28
168
235
386
817

NSDCC Pendings Today

PEND
$0-$800K
$800K-$1.4M
$1.4M-$2.4M
$2.4M+
Total
4/10/17
38
202
126
69
427

Without more homes to sell, it’s like a freeze-dried frenzy on the lower end – very dry but it’ll keep you alive!

From cnbc.com:

Anyone eager to buy a home this spring probably has reasons to feel good. The job market is solid. Average pay is rising. And mortgage rates, even after edging up of late, are still near historic lows.

And then there’s the bad news: Just try to find a house.

The national supply of homes for sale hasn’t been this thin in nearly 20 years. And over the past year, the steepest drop in supply has occurred among homes that are typically most affordable for first-time buyers and in markets where prices have risen sharply.

In markets like San Diego, Boston and Seattle, competition for a dwindling supply has escalated along with pressure to offer more money and accept less favorable terms.

“Sellers will have the edge again this year,” said Ralph McLaughlin, chief economist for Trulia, a real estate data provider. “Homebuyers are really going to be scraping the bottom of the barrel as far as housing choice is concerned.”

The intensity of the competition this spring has surprised even sellers like Kathleen Mulcahy, a 37-year-old product manager in Seattle.

Within a week of listing her one-bedroom, one-bath condo, Mulcahy received 21 offers – all above her asking price of $398,000. Most of the offers came with built-in triggers to automatically rise in case a rival bidder sweetened a bid. In the end, she accepted an offer of $500,000 – all cash.

“A lot more than I expected,” Mulcahy said.

Yet the changed landscape cuts both ways: Facing higher prices and competition herself, Mulcahy has decided for now to put off buying another home.

“There’s very little available, and it’s just too expensive right now, so I’m going to wait,” she said. “I’ll probably rent for two or three years.”

About 1.75 million homes were for sale nationally at the end of February, according to the National Association of Realtors. That’s down 6.4 percent from a year earlier and only slightly up from January, when listings reached their lowest point since the association began tracking them in 1999. All told, the supply of homes for sale has fallen on an annual basis for the past 21 months.

Read full article here:

http://www.cnbc.com/2017/04/10/mission-nearly-impossible-this-spring-finding-a-home-to-buy.html

Posted by on Apr 10, 2017 in Actives/Pendings, Frenzy, Inventory, Jim's Take on the Market, Market Buzz, Market Conditions, North County Coastal | 0 comments

Results from Bidding-War Video

The only thing harder than getting a listing is helping buyers win a house.

Last week I mentioned how there still isn’t any uniform process to sell a residential resale home – it is the wild wild west!  Even when a listing agent tells you what they are going to do to you, it is always subject to change!

We found this fantastic video by a Colorado guy who outlines the best ways to handle a bidding war.  Because I know that hardly any agents actually have a bidding-war strategy beyond spreading out the offers on the dining-room table, I have since been sending the video along with my offers.  Because the video is done by a third-party guy, hopefully it is viewed as a powerful new solution by agents who tend to think they know it all just because they’ve sold a few houses in their life.

Here are my results:

  1. The first listing agent who saw it took it well – he was the guy who asked if I utilize the same method (which I affirmed), and then proceeded to at least tell me what the other offers were.  They were too high for us, so my buyers surrendered.
  2.  The next try was to send the video along with our full-price offer (different buyers) into what we knew was going to be a dog fight.  There were at least 50-70 people at the open house when we were there, and the older house oozed with charm and character.  The listing agent insisted that to present our offer, we first had to state in writing that we would not ask for any repairs.  I replied that I’ve never heard that one before, but we complied just to see how crazy it would get. She didn’t respond to my second inquiry on whether she watched the bidding-war video.  She said they would pick a winner on Monday, which came and went with no seller response.  On Tuesday, she emails the buyer-agents stating that she had double-digit offers, and wanted everyone to submit their highest-and-best offer.  Obviously she didn’t watch the video – in which he compared her strategy as being the same as telling race drivers to just keep circling the track and we’ll tell you when the race is over.  My buyers loved the house on Saturday, but by Tuesday were fed up and we didn’t respond further.
  3.  On Monday afternoon a new listing hit the MLS which looked like a good match for a third set of buyers, and we were there on Tuesday morning to view. It met our criteria, and we knew it was hot, so we made a full-price offer that day with no appraisal contingency, no termite, no home warranty, and a month’s free rentback for the sellers if they needed it.  The next morning, the listing agent said he had received four offers in the first 24 hours – and ours was the lowest!  He watched the video but it was too late – the sellers had already signed the offer that was $50,000 over list.

Wouldn’t every party be better served if there was a uniform process?

Wouldn’t a live auction be the best solution for sellers and buyers?  It would take all the uncertainty out of the equation, and allow all bidders to compete face-to-face, and be driven by the animal spirits to pay what it took to win!

A side note, and fourth example: Buyers who are moving here from out-of-state put their current multi-million-dollar home on the market last week in a town that has had a similar frenzy environment as San Diego.  They were impressed with the immediate buyer traffic, and on Sunday an agent reported that he had a buyer who wanted to make an offer.  He, like me and every other buyer’s agent, was inquiring how the listing agent was going to handle the process, to which she responded, “We’ll be reviewing all offers on Wednesday”.  The buyer didn’t like that response, and went away. Here we are on Thursday, and no offers have been received.

While I need to keep getting listings just to maintain my own sanity, I will always have time for buyers who are blog readers here!  Congrats to our frequent commenter Eddie89!  We made offers on five houses before finally succeeding on the sixth.  We offered 9% under list price – a daring low offer on a new listing – and when the sellers countered 3% below list it was close enough – we’re in escrow!

Posted by on Apr 6, 2017 in Frenzy, Jim's Take on the Market, Why You Should Hire Jim as your Buyer's Agent, Why You Should List With Jim | 7 comments

Home Buyers – Prepare for Battle

An article from cbsnews.com – get good help!

http://www.cbsnews.com/news/buying-a-home-in-2017-prepare-for-battle/

An excerpt:

“Home buying is about substantive economics, but it’s also got an element of ‘animal spirits,’” said its President Steve Udelson. “In some of the hottest markets, we’ve seen a double-digit run-up in prices.”

The website surveyed 1,289 prospective buyers nationwide, and its findings suggested that most prospective homeowners already had their feet in the starting blocks for the spring selling season. More than half were willing to go beyond their budget — by an average of nearly $38,000 — to get the property they desired.

And like most competitive athletes, they were hopeful as well as scared. Not surprisingly, about 60 percent of those surveyed feared:

  • Bidding wars driving up the price of their dream home.
  • Losing the “earnest money” they put down when they signed a contract.
  • Becoming “house poor,” that is, unable to afford amenities like a meal out in order to make the mortgage payment.

Read full article here:

http://www.cbsnews.com/news/buying-a-home-in-2017-prepare-for-battle/

Posted by on Mar 26, 2017 in Frenzy, Jim's Take on the Market, Market Buzz, Market Conditions, Thinking of Buying? | 2 comments

“Severe Housing Drought”

We are used to headline porn, but this one sounds startling – are we having a Severe Housing Drought?

http://www.cnbc.com/2017/03/23/this-is-whats-behind-the-severe-housing-drought.html

In the article, she says that nationally we have the fewest homes for sale than at any time in the last 18 years.  But are they just selling faster, which would give the appearance of low inventory?  If we have a similar number of houses being listed and they are selling faster, I wouldn’t consider that a drought, let alone a severe drought.

First, let’s compare the total supply and number of closed sales in 2017 to previous years – these are the numbers from January 1st to March 15th:

NSDCC (La Jolla to Carlsbad)

Year
# of New Listings
Median LP
# of Solds
Median SP
Median DOM
2013
1,042
$1,149,000
518
$842,950
31
2014
1,029
$1,295,000
464
$981,500
30
2015
1,043
$1,345,000
459
$1,145,000
31
2016
1,145
$1,489,900
421
$1,105,584
26
2017
987
$1,499,000
431
$1,200,000
24

This year’s number of new listings is 7% below the average of the last four years, but I wouldn’t call that a drought. If I watered my grass 7% less, it wouldn’t die. Besides, 40% of all listings don’t sell, so maybe the fewer listings just means fewer OPTs? The number of closed sales is much lower than previous years, but better than 2016.

How about the rest of the county?

San Diego County

Year
# of New Listings
Median LP
# of Solds
Median SP
Median DOM
2013
6,749
$479,000
4,426
$402,000
30
2014
7,077
$539,000
3,544
$475,000
28
2015
7,129
$569,000
3,582
$500,000
30
2016
7,146
$559,925
3,634
$532,500
24
2017
6,347
$639,500
3,696
$560,000
20

There are 10% fewer listings this year, compared to the average of the previous four years, but sales are HIGHER than any of the last three years. There isn’t a perfect relationship between listings and sales, because some of the closed sales were listed before January 1st. But the trend looks fine.

I don’t keep a record of the number of houses that are pending, but a couple of months ago we were around 300 in NSDCC (between La Jolla and Carlsbad).

Here is today’s count:

Area
# of Active Listings
# of Pendings
Median DOM
NSDCC
795
413
22
San Diego County
3,485
3,070
15

The reason we have a record-low number of homes for sale is because they are selling so fast.  Severe drought isn’t the right adjective – can we call it scorching hot?  Half of the pendings found a buyer in 15 days!

With half of the upcoming closed sales finding their buyer that fast, it means they probably paid the seller’s price, or close.  The other half are sellers who are willing to wait until they get their price!  It means the pricing trend should continue upward.

I think we’re back in the frenzy zone!

Posted by on Mar 23, 2017 in Frenzy, How Hot?, Inventory, Jim's Take on the Market, Market Buzz, Market Conditions, North County Coastal | 0 comments

SD Spring Selling Season Starts Now

Here is a good visual aid that shows how closed sales usually jump in March – and those are sales that began in January and February.

Sales last March were 39% higher than in February!

This year, we’re coming in hot too.  Sales in the last four months of 2016 were similar to those in the frenzied 2013!

Click here for more of Rich Toscano’s work:

https://piggington.com/december_2016_housing_data

Posted by on Feb 7, 2017 in Frenzy, Jim's Take on the Market, Spring Kick, Thinking of Buying?, Thinking of Selling? | 0 comments

San Diego County Detached-Homes

Tom asked for some thoughts on the county-wide market!  Though we had a few more listings in 2016 than in recent years, the closed sales were the highest of the last three years – and within 1,000 of the frenzied 2013 total.

San Diego County Detached-Home Listings and Sales

Year
# of Listings
# of Sales
Median LP
Median SP
SP:LP
2013
33,077
24,910
$459,990
$455,000
98.9%
2014
33,752
22,101
$499,999
$495,000
99.0%
2015
33,040
23,733
$539,000
$529,000
98.1%
2016
34,015
23,943
$569,000
$560,000
98.4%

The SP:LP ratio is down slightly, but for the median sales price to be within 1.6% of the median list price on 23,943 sales is pretty remarkable – especially when the median sales price has risen 23% since 2013!

Save

Posted by on Feb 7, 2017 in Frenzy, Market Conditions, Sales and Price Check, Tom Tarrant | 0 comments

Inventory Watch

How about that weather!  Flash-flood warnings, high-surf advisories, and 1-2 inches of rainfall in the last 72 hours!

It’s not stopping buyers and sellers from getting together though!

We had 59 new pendings this week – the most since mid-October!

The lower-end exploded this week too.

There are only 24 houses for sale under $800,000, and their average list price per square foot jumped 10% in one week, to $470/sf.

The $470/sf is higher than the category above it, $800,000 – $1,400,000, which averaged $463/sf.  It’s the first time that’s ever happened!

HIGH SURF ADVISORY REMAINS IN EFFECT UNTIL 4 AM PST TUESDAY…WAVES BREAKING  22 TO 25 FEET ALONG WEST AND NORTHWEST FACING BEACHES. HIGHEST WAVES WILL OCCUR DURING THIS AFTERNOON AND EVENING.

Click on the ‘Read More’ link below for the NSDCC active-inventory data:

Read More

Posted by on Jan 23, 2017 in Frenzy, Inventory, Jim's Take on the Market, Market Buzz, North County Coastal | 2 comments

Bring Back Dirty Cash?

Just a month after President Donald Trump’s inauguration, a federal anti-money laundering program that targets luxury real estate is set to expire.

The dragnet monitors pricey home deals for signs of dirty cash, helping detect criminals who launder money through real estate. Manhattan and Miami-Dade County were the first markets scrutinized by the feds.

Here’s the big question: Will Trump — who made his money as a developer — keep the heat on the real estate industry? And if the administration of a developer-turned-president chooses not to renew or expand the regulations, will it be perceived as a conflict of interest.

Unlike other industries where cash changes hands freely, real estate has few checks on buyers.

Drug dealers and corrupt foreign officials have been busted buying condos and mansions in the United States. While the Obama administration rules were blasted by developers and brokers as faulty, they don’t seem to have hurt business as much as first feared since going into effect in March.

Read more here:

http://www.miamiherald.com/news/business/biz-monday/article127809744.html

Posted by on Jan 23, 2017 in Drug Money, Frenzy, Jim's Take on the Market, Market Buzz, Real Estate Investing, Spring Kick | 2 comments