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Category Archive: ‘Jim’s Take on the Market’

More Predictable in 2018

Last year at this time we were in shock at the thought of what a Trump administration might mean for our real estate market – there was no telling what was going to happen!

It’s not a stretch to say that next year should be easier to predict!

Factors to consider for your 2018 predictions:

  1. Trump will name new leaders of the CFPB and the Fed, and both people should push for easier money.  I don’t think we’ll be seeing no-doc mortgages any time soon, but the new regimes could strive for more things like higher production of the low-down-payment Fannie/Freddie loans (not that the lower-end markets need much stimulus!).
  2. Goldman Sachs said yesterday that they expect the Fed to raise rates four times next year.  But the recent Fed moves haven’t resulted in a corresponding increase in mortgage rates – so we might get into the mid-4% range, which isn’t the end of the world.  The buyers – or sellers – can always buy down the rate if needed.
  3. The tax reform will get watered down and passed when no one is looking, and buyers will forget about it quickly because it’s so hard to calculate the actual impact. Rising rates are much easier to figure.
  4. The overall inventory of homes for sale probably won’t change much.  There might be occasional spurts of listings here and there, but there is still no place for seniors to go that’s better than where they are today.  We should have the same or slightly more estate sales, but no significant increase, and with the taxation so heavy on long-time owners, they and their families will just wait until they croak.
  5. More affluent people from higher-end markets who are thinking about retiring will see coastal San Diego as a terrific option.
  6. Our recent real estate boom since 2009 has caused sellers and agents to be extremely optimistic.  Yesterday an agent complained about getting ‘lowballed’ when she got an offer that was $25,000 under the bottom of their range a week before Thanksgiving.  It will take months – or years – before anyone notices, let alone reacts, to a major shift in buyer trends.
  7. We are numb to the news.  Mass killings are a regular event, sexual deviants are a dime a dozen, and it’s hard to imagine that Trump could say anything that would be a shock now.  The news might be what’s causing buyers to want to hurry up and hunker down!

Expect more of what we’ve had recently – low inventory, and higher prices.  But I do think we are way overdue for sales to decline – I already guessed 5% fewer NSDCC sales in 2018, and it could be worse.

Posted by on Nov 21, 2017 in Forecasts, Jim's Take on the Market, Market Conditions | 3 comments

Inventory Watch

Last week: We should see a bit of a surge this week before more people shut it down for the holidays!

We did see a bump in new pendings this week – there were 46 new listings, and 60 new pendings!  The week before Thanksgiving and the last week of the year typically have more new pendings than listings – buyers are always looking!

Read More

Posted by on Nov 20, 2017 in Inventory, Jim's Take on the Market | 4 comments

Facebook RE Advertising

Advertising houses for sale on Marketplace can’t be far off now – will some sort of brokerage or mortgage services be next?

LINK

Last week, Facebook announced that U.S. users are able to search for housing rentals on its Marketplace platform. Like Craigslist, Facebook Marketplace—which launched in 2016—lets users buy and sell items nearby.

Now, not only can you sell an old couch, but also you can search for apartments and houses based on things like location, price, size, the number of bedrooms, and even if an apartment is animal friendly.

The housing section will include “hundreds of thousands of rentals” that go beyond the individual listings previously posted by users. Facebook has partnered with sources like Apartment List and Zumper to pull in listings. Other people—think brokers, agents, and property managers—can also post properties available for rent. Landlords can add 360-degree photos to each listing so that interested renters can take a virtual tour.

“Marketplace is a popular place for people to look for a home to rent,” said Facebook’s Bowen Pan. “Now that we’re adding listings from Apartment List and Zumper, people can search even more options in the U.S. to find a place to call home. First with vehicles and now with housing rentals, we’re partnering with businesses to bring more ease and convenience for consumers.”

Facebook’s latest announcement is part of a larger plan to keep users in the app longer and to function as a one-stop commerce platform for food, shopping, and even job hunts. Recently, Facebook upgraded Marketplace to include used car ads, and the continued expansion is in direct competition to longtime sites like Craigslist.

Posted by on Nov 17, 2017 in Jim's Take on the Market, The Future | 3 comments

Vacancy Rates

Buy rental properties! San Diego’s vacancy rate is also 2.9%, same as L.A.


https://calmatters.org/articles/frequently-asked-california-housing-crisis-questions-answered/

Posted by on Nov 16, 2017 in Jim's Take on the Market, Real Estate Investing | 0 comments

Master Bath Remodels

Thumb through any home decor magazine, and you’ll see a master bathroom with a soaker or shower as the showpiece. Ta-da!

Homeowners, it turns out, are splurging to scrub up, according to the recently released U.S. Houzz Bathroom Trends Study. Ninety-one percent of homeowners in the study added a spacious shower to their master bathroom (after tearing out the tub), and many added on deluxe features, like a body sprayer or rainfall showerhead, for an improved, spa-like space.

The average cost for a large-scale remodel of a master bath (sized over 100 square feet) was $21,000, shows the study. Master bath renovations cost more in pricey markets, however. In San Francisco, Calif., for example, a major remodel averages $34,100.

Accompanying a luxury shower is a soothing gray and white color palette, according to the study. Nineteen percent of homeowners installed white countertops in the master bath, and 40 percent painted its walls white. Fourteen percent added gray cabinets, as well, to complete the tone-on-tone look. The majority of homeowners (90 percent) changed the overall style of the room, some to contemporary (25 percent), some to transitional (17 percent), and some, still, to modern (15 percent).

  • Statement showers; lose the tub : Showers are the top feature to splurge on during a master bathroom renovation (42% of renovating homeowners). Of those making master shower updates (81%), more than two-thirds increase its size. Many homeowners remove their master bathtub (27%) to make room for a larger shower (91%).
  • Aging in place drives spend: Homeowners 55 years old or older spend nearly twice as much as those under 35 on renovations of master bathrooms over 100 square feet ($22,800 vs. $12,500, respectively). Older homeowners are significantly more likely to integrate accessibility features, as three in five have no plans to move in the next 10 years.
  • Millenials crave more space: One quarter of homeowners opt to increase their master bathrooms. Many of those who are keeping the bathroom size as is find it too small for their needs (30%). Millennial homeowners (ages 25 to 34) are more likely to increase their master bathrooms than are other homeowners and are more likely to be unhappy about the size when not changing it.
  • San Fransiscians spend the most on remodels: Among the top 20 U.S. metro areas, homeowners in San Francisco spend the most on a master bathroom remodel, averaging $34,100 for a major remodel of a larger master bathroom (over 100 square feet), compared with $21,000 nationally. Overall, costs vary significantly by scope of remodel, size of master bathroom and regions.

Posted by on Nov 16, 2017 in Jim's Take on the Market, Remodel Projects, Tips, Advice & Links | 2 comments

San Diego’s October Report

This company surveys real estate agents every month around the country – here is the October report from San Diego realtors:

Low inventory is the constant theme, but there are 5,157, houses and condos for sale in the county currently.  Maybe we just need to get better at correcting the reasons why those aren’t selling, and boom, we’d have instant inventory!

Price-wise, I would disagree with the 16.7 time-to-sell index. Prices are at least as good as they were in May, and instead of 3-6 buyers for every house, we’re down to one or two. You only need one!

When is the best time to sell? When everyone else isn’t!

https://barclays.qualtrics.com/CP/File.php?F=F_1XQQPvQoRlyFy6N

Posted by on Nov 15, 2017 in Jim's Take on the Market, Local Flavor, Market Conditions | 1 comment