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Are you looking for an experienced agent to help you buy or sell a home? Contact Jim the Realtor!

Jim Klinge
Cell/Text: (858) 997-3801
klingerealty@gmail.com
701 Palomar Airport Road, Suite 300
Carlsbad, CA 92011


Category Archive: ‘Frenzy’

The Buyers’ Struggle

When you find the right home, don’t lose it. Get Good Help!

NAHB regularly conducts national polls of American adults and home buyers in order to understand new trends and preferences in the housing market. This is the third in a series of posts highlighting poll results, as presented during the 2018 International Builders’ Show in Orlando, FL.  See previous posts on tiny homes and driverless cars.

A recent poll revealed that most prospective home buyers actively involved in the search for a home have been looking for a significant amount of time. In fact, 61% have been trying to find a home to buy for three months or more, while the other 39% have been looking for less than three months.

The natural follow-up question to those who have been unable to find a home after searching for three months or longer is why?

Forty-two percent say they ‘can’t find a home at a price I can afford,’ 36% ‘can’t find a home with the features I want,’ 34% ‘can’t find a home in the neighborhood I want,’ and 27% were able to overcome all these obstacles but ‘continue to get outbid whenever I make an offer.’

This result shows there are several important reasons why prospective buyers haven’t been able to pull the trigger, but the most important one is lack of affordability – not being able to find a home at a price point they can afford.

Link to Article

Posted by on Feb 14, 2018 in Auctions, Bidding Wars, Frenzy, Jim's Take on the Market, Why You Should Hire Jim as your Buyer's Agent, Why You Should List With Jim | 1 comment

Way Over List Price

Here we only have to pay 5% to 10% over list….if at all!

It is no secret the housing market is on fire. Last year, almost a quarter of all U.S. home sales were above asking price, according to real-estate listings website Zillow. But the average premium over asking for those homes was $7,000—not $700,000. Even in the hottest real-estate markets, where there is a severe shortage of inventory, the highest bid typically isn’t more than a couple hundred thousand dollars over asking.

What often distinguishes the houses that go way above asking—half a million or more—is a feature that the other homes in the neighborhood just don’t have, says Toby Lumpkin, a real-estate broker with Realogics Sotheby’s International Realty in Seattle. That can be a better view, more southern exposure, an especially tasteful renovation, a three-car garage in a parking-challenged city, or a side yard, which is what set apart Mr. Malcolm’s house. It’s also often a price low enough to attract attention.

When Kerry Bucklin saw a house for sale on Mercer Island, Wash., on the waterfront, he thought its price of $1.995 million was too low. The Midcentury Modern home, built in 1959, needed updating and shared 210 feet of waterfront with five other houses. But it was the closest of the houses to the shore, offered unobstructed views in a parklike setting and allowed him to go paddling on Lake Washington without having to load a canoe on his car. At the same time, the property was close to the freeway, shaving 6 miles off his commute to work.

Mr. Bucklin, 55, a real-estate lawyer, had been looking for a couple of years to replace the large family home mid-island, where he lived alone since becoming an empty-nester. He bought the home in June by paying just over $500,000 above asking, beating seven other offers.

Read full article here:

Link to Article

Posted by on Feb 9, 2018 in Bidding Wars, Frenzy, Jim's Take on the Market | 0 comments

Rising Mortgage Rates

Mortgage rates have risen almost one-half percent this year, and are around 4.50% with no points today (conforming and jumbo).  Because rates haven’t moved much in recent years, the half-point increase sounds dramatic, and could cause a few people to reach for the panic button.

But there’s no need to panic.

During the Frenzy of 2013, rates went up higher in less than half the time of the current increase:

But home prices didn’t back off – instead, our NSDCC median sales price has risen 40% since July, 2013!

But aren’t we closer to a new market peak now, and higher rates will just be the beginning of the end?  After all, the last two readings of the SD Case-Shiller have declined month-over-month, and those are calculating county-wide sales that are generally lower priced than NSDCC.

While the higher-rates/higher-prices/tax reform/insert-your-favorite-doom will likely cause nervous buyers to pause, the market has always been made by the buyers with less caution and more horsepower.

They might be more selective going forward, which means only the cream-puffs will be selling for retail, or retail-plus – the inventory of those is too tight, and the competition will drive the sales price.

It’s the sellers of homes that are lingering unsold who might want to sharpen their pencil on their list price.  Once you’ve been on the market and not selling for 2-3 months, do you really need to keep pressing for that extra 5% to 10% on top of what the last guy got – and risk not selling at all?

If higher rates do become an issue, it is a problem that is easy to fix, unlike tax reform or higher prices.

Buyers can either opt for a 5-year or 7-year fixed rate to stay under 4%, or ask the seller to buy down the rate.  Sellers who are getting a 5% premium over last year’s prices shouldn’t mind paying 1% or 2% to make the deal.

Posted by on Feb 5, 2018 in Frenzy, Interest Rates/Loan Limits, Jim's Take on the Market, Market Conditions, North County Coastal, Sales and Price Check | 2 comments

2018 Start

When you look at the 2nd half of 2012, you can see that a surge was building – and in 2013 we had one of the biggest frenzies of all-time. The end of 2017 was less enthusiastic – the worst second half since 2014.  It makes you think that we might get off to a slower start this year:

NSDCC Detached-Home Sales

Year
1st Half Sales
2nd Half Sales
2nd Half MSP
2012
1,477
1,677
$845,000
2013
1,670
1,548
$980,000
2014
1,430
1,420
$1,025,000
2015
1,555
1,524
$1,062,250
2016
1,523
1,580
$1,170,000
2017
1,587
1,487
$1,225,000

We can do all the analysis we want, but the bottom line is that if buyers see something they like, they just lunge at it these days. I’ve already seen three new pendings today that were outrageously priced, yet it didn’t stop somebody from tying them up.

Posted by on Jan 22, 2018 in Frenzy, Jim's Take on the Market, Market Buzz | 1 comment

NSDCC 2018 Inventory

There are other variables, but the amount and quality of the inventory will determine our fate in 2018.  Even with our Sandicor MLS logging duplicate listings, our count of houses for sale between La Jolla and Carlsbad dropped about 10% this year!

It wouldn’t matter if we cut back on the number of higher-end listings – there would still be plenty to go around.  Where did the shortage happen this year?

Year
# of Listings Under $1M
# of Listings Over $2M
Total # of Listings
2013
2,141
1,047
4,818
2014
1,886
1,063
4,692
2015
1,819
1,257
5,068
2016
1,524
1,441
5,169
2017
1,161
1,433
4,598

The number of high-enders were remarkably about the same as last year – the shortage this year was almost entirely on the lower end.

Today, there are only 41 houses for sale priced under $1,000,000. There will be more, but I think we can expect the number of sellers willing to take less than a million to drop even further in 2018 – less than 1,000 for sure, and possibly as low as 700-800 listings.

There were 882 NSDCC houses sold this year under $1,000,000 (so far). We could still have close to that many sell again in 2018 if the frenzy picks up on the cheapies and virtually every listing sells.

Posted by on Dec 28, 2017 in Frenzy, Inventory, Jim's Take on the Market, Market Conditions, North County Coastal | 4 comments

Housing Cycle

Now that the tax reform is happening, what will it means for housing? We already have a natural cycle that has been maturing, and how buyers and sellers interpret the tax reform could exacerbate the issue.  It will take healthy employment and incoming retirees to keep the party going!

From our friends at John Burns:

https://www.realestateconsulting.com/where-are-we-in-the-housing-cycle/

~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~

San Diego is looking pretty good for employment:

https://www.roberthalf.com/blog/management-tips/it-hiring-forecast-first-half-of-2018

Posted by on Dec 21, 2017 in Frenzy, Jim's Take on the Market, Market Conditions, Tax Reform | 1 comment

Tax Reform – Final Bill

We knew these were coming:

The legislation preserves the deductions for mortgage interest and charitable giving, though it lowers the cap on the mortgage deduction from $1 million to $750,000.

Seeking to win over House Republicans from high-tax states, the conference committee legislation caps the state and local tax deduction at $10,000, with filers allowed to deduct property taxes and state and local income and sales taxes.

Those aren’t quite as generous as before, but a happy compromise.

What about the change from owning your home for two out of the last five years to get up to $500,000 tax-free profits?  Both the House and the Senate wanted to change the time period to owning five out of the last eight years.

I found this on page 663 of 1101 here:

http://docs.house.gov/billsthisweek/20171218/CRPT-115HRPT-%20466.pdf

I’m not a lawyer, and could be a little woozy after scrolling 600+ pages, but I think they threw it out altogether!  Before I get too excited, can an attorney tell us that ‘No provision’ means nothing was included in the final bill?

If the two-out-of-five-years is still the law, then the realtor spokespeople better be running to the microphone to declare total victory, and assuring everyone that property values won’t be going down 5% to 15% now!

Posted by on Dec 15, 2017 in Frenzy, Jim's Take on the Market, Local Government, Market Conditions, Tax Reform | 37 comments

Getting Hotter?

From realtor.com:

In such a tight market, buyers are running out of options, said realtor.com Chief Economist Danielle Hale.

“Days on market and the number of new listings coming to market are lower than we typically see in the fall season, while listing views per property continue to move higher,” she said in a statement.

We saw here that the inventory usually surges at this time of year.  But compared to previous Septembers, our selection is sparse at best:

NSDCC September New Listings:

2012: 320

2013: 406

2014: 365

2015: 405

2016: 413

2017: 311 (with a couple of days to go)

Look at the similarity – it was in the fall of 2012 that the Frenzy of 2013 began.  Will the selling season of 2018 be just as crazy?

Posted by on Sep 29, 2017 in Frenzy, Jim's Take on the Market, Market Conditions | 0 comments

Hurricane Flippers

Hat tip to Richard for sending this in:

LINK

An excerpt:

Addressing a real estate conference in flood-ravaged Houston this month, longtime investor Ray Sasser detailed his strategy: buy up to 50 flooded homes at deep discounts, then fix and flip them for a hefty profit.

Sasser first followed that game plan after Tropical Storm Allison flooded the city in 2001. He bought homes for 30 to 40 percent of their pre-storm value, spent another 15 percent on repairs, and sold many a year later – at full value.

The quick recovery surprised him, he said.

“This can’t be true,” he recalled thinking at the time.

The bet that home prices in hard-hit Houston neighborhoods will fully recover after Hurricane Harvey could be riskier, Sasser and local economists said. But a rush of investors eager to snap up flooded homes reflects broader confidence in the resilience of Houston’s unique metropolitan economy.

While the region’s unchecked development has come under fire for exacerbating flooding, it also reflects its core strength: A rare combination of rich job opportunities and low cost of living, driving explosive population growth in America’s energy capital.

The surging demand has sustained home prices through four major floods since 2001 and a historic oil price crash starting in 2014. Though Harvey caused far more damage than previous storms, investors such as Sasser see plenty of opportunity in the region’s estimated 268,000 flooded homes.

Tara Waggoner, the Houston market manager for brokerage and online listings firm Redfin, said the firm’s local agents were getting about four times the number of calls they usually get from investors. They ranged from individuals looking to buy one flooded house to groups of ten or more pooling their money for a home-buying spree, she said.

“You have people with millions of dollars to work with,” she said in an interview days after the storm. “They want to go in, pay cash, get the discount and fix it up to sell.”

Read full article here:

LINK

Posted by on Sep 22, 2017 in Flips, Frenzy, Jim's Take on the Market, Real Estate Investing | 3 comments

More Insanity

Hat tip to Richard for sending this in…..how much more can buyers take?

A house in Sunnyvale just sold for close to $800,000 over its listing price.

Your eyes do not deceive you: The four-bed, two-bath house — less than 2,000 square feet — listed for $1,688,000 and sold for $2,470,000.

“I think it’s the most anything has ever gone for over asking in Sunnyvale — a record for Sunnyvale,” said Dave Clark, the Keller Williams agent who represented the sellers in the deal. “We anticipated it would go for $2 million, or over $2 million. But we had no idea it would ever go for what it went for.”

This kind of over-bidding is known to happen farther north in cities including Palo Alto, Los Altos and Mountain View. But as those places have grown far too expensive for most buyers, future homeowners have migrated south to Sunnyvale, a once modest community that now finds itself among the Bay Area’s real estate hot spots.

Close to tech employment centers, it makes for a convenient commute — and prices there, too, are now pushing the limits of middle-class buyers. The house that sold for $782,000 over asking in Sunnyvale — it’s on Prunelle Court — is about a mile from Apple’s new spaceship campus.

The buyers, who work in tech, had been hunting for a home for a while — but kept getting out-bid, said Mini Kalkat, the Intero agent who represented them: “They lost two before they bid on this one, so we kind of knew what the numbers would be. It’s a crazy market, but there’s a way to maneuver the market.”

The property is one of more than 50 South Bay homes that sold in the last month for at least $200,000 above the listing price. More than half of those deals were made in Sunnyvale. Others were made in Cupertino, Saratoga and West San Jose, according to Alain Pinel agent Mark Wong. He compiles a monthly list of such “over-asking” transactions.

Over-asking sales are at least partly the result of agents’ sleight of hand. It’s become common strategy to list homes under their market value in order to entice Silicon Valley buyers; they are all too willing to fight over the few houses available in this chronically tight market.

Read full article here:

http://www.mercurynews.com/2017/09/12/now-this-is-ridiculous-782000-over-asking-for-a-house-in-sunnyvale/

Posted by on Sep 13, 2017 in Frenzy, Interesting Houses, Jim's Take on the Market, Market Conditions | 8 comments