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An Insider's Guide to North San Diego County's Coastal Real Estate
Jim Klinge, broker-associate
858-997-3801
klingerealty@gmail.com
Compass
617 Saxony Place, Suite 101
Encinitas, CA 92024
Klinge Realty
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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: ‘Listing Agent Practices’

Which Home Sellers Might Panic?

Is there a chance our home values could drop 20% to 30% like we saw in 2009?

There aren’t enough homeowners who will sell for today’s market value.  If prices drop, wouldn’t there be fewer homeowners interested in selling?

Probably – unless there was a panic.

Who might panic?

Some think it would be the recent home buyers – they were the ones who paid too much, and would panic to get out while they could before losing money.  But this isn’t the stock market – they bought a home for the long-term, and like we saw during the last crisis, people don’t sell just because they are underwater – or heading that way.  They have to live somewhere, and they will hunker down.

It’s the long-time homeowners who could sell for substantially less, because they have a boatload of equity.  If they had to dump on price to sell their home, they could do it, and still make out fine.  But would they?

Will baby boomers wreck the future one more time?

We see articles claiming that 40% of boomers are broke or close, and they all can’t be renters.  But for long-time owners to finally capitulate and dump on price in a panic, other things would have to happen:

  1. They would NEED the money.
  2. Somebody else would have to go first (and second and third).
  3. We’d go back to cyclical real estate.
  4. Realtors encourage dumping.

Need the money?  They need to live some place too, and does anyone really want to move to Hemet?  Selling the long-time homestead and renting doesn’t sound desirable either.  But if older folks can cash out by selling the house and move in with their kids, they might do it – but do the kids want them?  It’s more likely that the aging will stay put, and have nurses live-in or visit, if for no other reason than to avoid the capital-gains tax on profits over $500,000.

Somebody else needs to go first – and it will take a few lower sales nearby to make it obvious that it’s time to panic.  Denial is more than a river in Egypt!

Previously there were real estate cycles.  In the 2000s, the exotic financing stretched out the up-cycle, but then the reversion was shorter than usual too – just a couple of years.  Why?  THEY CHANGED THE RULES, and stopped foreclosing.  This is the key fact – lenders always led the previous down cycles by dumping REOs for whatever they could get, and sucking down home values for all.  But now banks don’t have to foreclose on defaulters, let alone dump houses for whatever the market will bear.  Without banks being the catalyst to start the dumping, who else will do it?

Realtors could get the party started by telling sellers to dump and run.  But in reality, it works in the other direction.  Somewhat-desperate sellers would rather shop around for a realtor who will take the listing at their lofty price, than believe they’d have to sacrifice their hard-earned equity (not!) just to sell.  Desperation is so high among realtors that it’s not hard to find one who will take a listing with a price based on comps +10%.  For most agents, that’s all they’ve ever known, and they don’t read blogs.

Bottom Line: There may be a slew of negative soundbites, but unless homeowners see panic happening right around them, they won’t believe it.  Real estate ignorance is bliss!

Posted by on Nov 20, 2018 in Jim's Take on the Market, Listing Agent Practices, Market Conditions, Realtor, Why You Should List With Jim | 16 comments

Selling Early

Earlier we saw how a fresh new listing gets more traffic, and that buyer interest dies off quickly:

http://www.bubbleinfo.com/2018/11/02/selling-your-home-in-2019/

Yet historically about 3/4s of the sellers insist on testing the market for weeks or months, just to make sure. Buyers don’t mind waiting, because they usually get a better price when they do.

Realtors get criticized for just wanting a quick sale, but the data shows that selling earlier in the listing period means getting closer to the list price.

The first group here are those houses that sold during their first 10 days on the market, and the second group are those that sold after 11+ days:

NSDCC detached-homes sold between September 1st and October 31st:

Year
#Sales DOM 10-
Avg SP:LP
Med SP:LP
#Sales DOM 11+
Avg SP:LP
Med SP:LP
2014
114
99%
97%
366
93%
96%
2015
115
99%
100%
356
95%
98%
2016
148
98%
101%
390
93%
96%
2017
141
99%
101%
377
95%
99%
2018
115
97%
100%
327
94%
97%

Buyers are demanding a slightly larger discount today, plus sales are also down 15% YoY so a few sellers aren’t budging – but they’re not selling either.

It’s probably never been so important to be sharp on price. Just don’t add any extra mustard!

Posted by on Nov 16, 2018 in Jim's Take on the Market, Listing Agent Practices, Sales and Price Check, Why You Should List With Jim | 3 comments

Brava Again

The buyers cancelled the second escrow on Brava yesterday.

We have had a dozen cash offers, so after the first cancellation I went back to the others and got them to bid it up to $690,000, which is a miracle when the highest offer was $675,000 in the first round.

Other agents since have said, ‘oh, you picked the wrong buyer’.  But I’m going to give the high bidder a chance to close every time – I think I have that obligation.  If they would have stuck, I would have been a hero.

There is more of a chance that end users will hang in there, but with flippers it tends to be cut-and-dry, and all about the money.  There has been some concern about the 2019 market being soft(er), but it’s not stopping them from wanting to buy.  They just want to fine-tune the price!

This is a neighborhood with zero lot lines, which you can see in this photo (in yellow).  Each home has the exclusive use of one side yard, instead of splitting both sides.  You can touch your neighbor’s house, but it does give you more usable space.

I don’t think there will be a noticeable discount needed for the flipper to resell a zero-lot-line house. There are several neighborhoods in Carlsbad, Encinitas, and Carmel Valley that have the zero lot lines, so it’s not that rare.

Posted by on Nov 15, 2018 in Bidding Wars, Flips, Jim's Take on the Market, Listing Agent Practices | 1 comment

My Best Listing Ever

My new listing in Rancho Santa Fe! Authentic Old-Spanish custom estate with a legal 2-br guest house on 2.3 acres! Oozing with charm and character borrowed from the old California missions, this sensational one-story has open-beam ceilings, custom cabinetry, wine cellar, 4 fireplaces, and plenty of natural light! Newer infinity-edge pool/slide, outdoor party room, 3-stall barn, tack room, 2 arenas, and on horse trail. Secluded on gated flag lot, and on sewer too. Guest house has newer kitchen & HVAC plus a 2-car garage – wow! Trophy property!

LP = $3,995,000:


2br/1ba Guest House

Guest House interior

https://www.zillow.com/homedetails/17442-Via-De-Fortuna-Rancho-Santa-Fe-CA-92067/16731335_zpid/

Posted by on Nov 12, 2018 in Bubbleinfo TV, Jim's Take on the Market, Listing Agent Practices, Rancho Santa Fe, Why You Should List With Jim | 7 comments

The End is Near

click on image for their youtube video

Our broker-cooperation model of sharing listings though the MLS has been the lifeblood of selling homes since the early 1960s.  But it is breaking down right before our eyes.

It’s not going to happen all at once, or even happen out in the open.  Instead, the sharing of listings through the MLS will just quietly go away.

Whether it is the emergence of the PLS, or brokerages developing their own Coming Soon program, or individual agents doing off-market sales out of sight, the sharing of listings is doomed – even though it is what’s best for consumers and agents alike.

Can we just admit it, and carry on like the commercial brokers do?

Everybody for themselves!

The first thing to do is to stop the automatic listing feeds to Zillow/Trulia, and make it broker-optional, which is what’s happening in Las Vegas.

Agents may choose to upload their MLS listings to Zillow and other portals, or maybe not.  But what about Redfin and other brokerages who get their listings directly from the MLS?  Once agents see the benefits of eliminating portals, why would they bother with the MLS at all?

Maybe agents with a hot new listing will just wait a few days or weeks to see if they can find their own buyer first.  Or maybe another agent in the office might have someone?  We already see this happening every day.

The MLS will be the marketplace of last resort.

We should embrace this change, and tell consumers that they have to go to each company’s website – or even each individual agent’s website – to find the hot new buys.  At least they would know the honest truth!

I’m convinced that industry players don’t see this coming.  They don’t see what happens (or they look the other way) when listing distribution is left in the hands of the listing agents themselves.

Yes, thank you for giving us the ability to choose which platforms to use to market our listings – I appreciate having choices. But when you take the automation away, and make it a manual choice for each listing, agents will find it hard to resist the temptation to limit with whom they share their listings.

Posted by on Nov 9, 2018 in Jim's Take on the Market, Listing Agent Practices, Realtor, Realtors Talking Shop, Why You Should List With Jim | 1 comment

The ‘Rancho’ Effect

People are feeling a ‘change’ in the market, and wonder what will happen. The rapid escalation of prices has turned real estate into a rich man’s game – and you need serious horsepower to participate!

As the rest of North San Diego County’s coastal housing market feels the ‘Rancho’ effect, we will see more listings coming to market, listings taking longer to sell, and bigger gaps between list prices and sales prices.

In the surrounding lower-priced areas, the action has been much faster – we’re used to the quality homes selling in the first week or two. Let’s compare RSF to Encinitas to demonstrate what we can expect from now on:

Category
Encinitas
Rancho Santa Fe
Population
63,184
3,117
Active Listings
134
172
October Solds
48
23
Actives/Solds
2.8
7.5
Oct Average DOM
40
73
Oct Average SP:LP
95%
87%

We’ll have more homes on the market, slower market times, and bigger gaps between the list prices and sales prices. It’s how they do it in the Ranch!

Posted by on Nov 8, 2018 in Encinitas, Jim's Take on the Market, Listing Agent Practices, Market Conditions, Rancho Santa Fe | 1 comment