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Category Archive: ‘Market Buzz’

Chinese Bank Files Lawsuit

ccb

The PC paranoia about foreign investors could get run over by determined bankers.  Once they get momentum from a couple of successful cases, it could temper future investment. From the G&M (H/T SM):

http://www.theglobeandmail.com/real-estate/the-market/chinas-citic-bank-tries-to-seize-real-estate-assets-in-canada/article30637786/

China CITIC Bank Corp Ltd has launched a Canadian lawsuit to try to seize the assets of a Chinese citizen the bank claims took out a multimillion-dollar loan in China then fled to Canada, the lender’s Vancouver-based lawyer said on Monday.

The bank is looking to seize numerous Vancouver-area homes, valued at some $7.3-million, along with other assets, according to the lawsuit, which was filed in the Supreme Court of British Columbia in Vancouver on Friday.

The defendant, Shibiao Yan, owns three multimillion-dollar properties in a Vancouver suburb and lives in a $3-million Vancouver home owned by his wife, according to court documents.

China is in the midst of a massive corruption crackdown and has stepped up efforts to find fugitives it says are hiding stolen assets abroad. The lawsuit comes amid a debate about the role foreign money, particularly from China, has played in Vancouver’s property boom.

“The person involved left China with a large debt owed,” said Christine Duhaime, a lawyer who represents China CITIC Bank in the case, adding that she was not aware of any criminal charges against the man.

Yan could not immediately be reached for comment. He has not yet filed a response to the lawsuit and the claims have not been proven in court.

China has been working with Canada for years to finalize a deal on the return of ill-gotten assets seized from those suspected of economic crimes. The agreement was originally announced in July 2013 and has not yet been ratified.

But it is rare for Chinese banks to use Canadian courts to pursue those who have left the country.

Chinese Foreign Ministry spokesman Hong Lei said the bank was protecting its rights in accordance with the law.

“This is a normal thing to do internationally,” Hong told reporters in Beijing.

According to the lawsuit, China CITIC Bank is seeking repayment for a line of credit worth 50 million yuan, or roughly $7.5-million, taken out by a Chinese lumber company and personally guaranteed by Yan, who was the company’s majority shareholder at the time.

Vancouver residents have questioned the legitimacy of foreign funds invested in the city’s real estate market and have urged authorities to do more to scrutinize their origin.

Housing prices in the west coast city have jumped 30 per cent in the last year.

http://www.theglobeandmail.com/real-estate/the-market/chinas-citic-bank-tries-to-seize-real-estate-assets-in-canada/article30637786/

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Posted by on Jul 21, 2016 in Jim's Take on the Market, Market Buzz | 0 comments

Pokemon Go and Real Estate

Good grief:

http://www.cnbc.com/2016/07/14/how-pokemon-go-could-help-you-sell-your-house.html

On a steamy summer night near Manhattan’s Washington Square Park, real estate agent Jay Glazer hoped a redesigned roof deck might help draw potential buyers to the open house at his $1.5 million listing but, just in case, he added this to the ad:

“I’m fairly certain there is a PIKACHU at this open house, don’t miss it.”

Of the dozen or so people who showed up, only one knew exactly what “Pokemon Go” was, but Glazer said it was still worth adding the app as something of an appetizer to the ad.

“I think at the end of the day the goal is to get as many people through the door and interested in the apartment, and ultimately, if there’s a ‘Pokemon’ obsessed person out there who also likes this home, then we want them here, and this is the best way to attract them,” said Glazer, 32, a “Pokemon Go” player himself.

The ads are popping up on real estate listings as fast as Pikachu’s are on teenagers’ screens. OK, that’s a complete overstatement, but real estate agents are starting to play the game of using the game.

Posted by on Jul 14, 2016 in Jim's Take on the Market, Market Buzz | 0 comments

ASG and KK

kayla klinge 25

We’re wrapping up the celebration of Kayla’s 25th birthday! (yesterday)

She was born on the day of the 1991 All-Star Game.  I got to hold her in my arms and watch baseball on TV from Day One!  The game was in Toronto, and Benito Santiago and Tony Gwynn both started for the National League!

https://en.wikipedia.org/wiki/1991_Major_League_Baseball_All-Star_Game

We had some random thoughts:

  1. How many people have lived in their current residence longer than any other house in their life?  I’ll say most.  The novelty of moving has worn off, and appreciating what you have is the new orange.  Shall we say an equal impact on supply and demand – and drying up both?
  2. Every house on the market for more than 7 days is probably a fixer – sellers should do improvements in advance. Buyers are schooled by HGTV, and want perfection. If you have a superior home in a terrific location, you’ll get offers right away as long as your price is within reason.
  3.  The Joys of Homeownership.  Whether the home is owner-occupied or a rental, let’s expect to spend $1,000 per month, on average, for repairs and improvements. You can cruise for a few years, but eventually you can expect to replace the furnace, air conditioning, water-heater, dishwasher, and refrigerator every ten years.  Carpet, paint, and landscaping every five years.  Sure, if you or your tenants don’t mind living in squalor, it’s not a problem. But if you want to sell for top dollar, you need top-dollar improvements.
  4.  You can judge the listing agent’s experience by the MLS comments.  The market isn’t hot enough that you can bluff me into thinking that your listing is so great that you’ll have multiple offers by tomorrow. Just make it easy to show, would you?
  5. We are overdue for a media onslaught. Any disruption in the positive housing trends are sure to be exploited by national media types. Don’t listen to anybody who doesn’t have on-the-ground examples to back them up.
  6.  The ‘Sold before Processing’ listings are of great convenience. There is fantastic efficiency for a listing agent to quickly shuffle a deal into escrow and move on to the next sale, and avoid having to deal with those messy bidding wars.
  7.  It seems like Zillow is enthusiastically supporting their big-spending realtors.  Zillow needs to go next-level and just openly promote their favorite agents.  There will be more lines in the sand to be drawn.
  8.  The unstable current events should make you conscious of your home’s security.  Do you feel secure at home?  Make your home defensible, or consider moving!
  9.  Revolution is going to come, so we should take charge. Take the gun issue.  Both sides should submit their solution, and a compromise hammered out.  Something has to change.
  10.  If unrest continues, it is probably good for real estate.  More people will buy a house to hunker down – to “cocoon”, and drive demand.

Wondering what to do?  Either you can settle at today’s prices, or take your chances during the next spring selling season with the new president!

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Posted by on Jul 10, 2016 in About Kayla, Jim's Take on the Market, Kayla Training, Market Buzz, Market Conditions | 0 comments

San Diego’s Pending Index Rises

pending index

Work with an agent who is well-versed in handling multiple offers!

http://www.car.org/newsstand/newsreleases/2016releases/may2016pending

Pending home sales in Southern California as a whole rose 5.6 percent from May 2015 and 2.4 percent from April, thanks to year-over-year gains of 6.9 percent in Los Angeles County and 6.2 percent in San Diego County. Orange County experienced a 1.8 percent decrease from the previous year.

In a separate study, California REALTORS® responding to C.A.R.’s May Market Pulse Survey reported slower growth in floor calls, listing appointments, and open house traffic, reflecting slowing market activity. Despite the lagging indicators, the percentage of properties selling above asking price reached an all-time high and the number of offers per property rose.

• The share of homes selling above asking price in May increased to 38 percent, the highest level since the survey began, rising from 32 percent in April. Conversely, the share of properties selling below asking price dropped to 34 percent. The remainder (27 percent) sold at asking price.

• For the homes that sold above asking price, the premium paid over asking price declined for the third straight month to an average of 9.4 percent, down from April’s 9.6 percent and up from 8 percent in May 2015.

• The 34 percent of homes that sold below asking price sold for an average of 10 percent below asking price in May, down from 12 percent in April and up from 7 percent a year ago.

• Nearly seven of 10 properties for sale received multiple offers in May, indicating the market remains competitive. Sixty-five percent of properties received multiple offers in May 2015.

• The average number of offers per property increased to 3.1 in May, up from 2.9 in April and 2.8 in May 2015. The increase in the number of offers was driven by a greater share of transactions that received three or more offers. Moreover, homes priced between $200,000- $399,000 and $750,000-$999,000 saw the greatest increases in three or more offers compared to a year ago.

• About one in four (23 percent) properties had price reductions in May, indicating sellers are pricing their homes more realistically. One-fourth of properties had price reductions in May 2015.

Posted by on Jun 24, 2016 in Jim's Take on the Market, Market Buzz, Market Conditions, Why You Should Hire Jim as your Buyer's Agent, Why You Should List With Jim | 0 comments

One-Story Premiums

2016-04-10 15.23.25

Richard and I were discussing the phenomenon of houses selling for prices that are well-above comps – and how they almost always end up being all-cash sales.

Back in the day, the cash buyers always demanded the best deals – figuring that because they were paying cash, they somehow deserved a better price.  But today, cash buyers are throwing around big money to get what they want.

What do they want?

What do they need?

We know that the one-story homes have always been popular, especially with seniors. Guess who has all the money? Yep – the older set.

But there is more to it. Buyers get pickier as prices go up, and now they want everything.  You can’t blame them – we are at record prices!

My rule-of-thumb has been that one-story houses sell for a 10% premium over two-story houses. But I think the gap is increasing, and for single-level houses that also have the other valued features like 3-car garage, view, and a low-maintenance but attractive yard, there is a combo premium too.

Part of the pricing pressure is due to the inventory differences. Here’s a look at South Carlsbad over the last six months:

Detached-Home Listings in 92009 and 92011

Type
ACT Listings
Avg. LP/sf
SOLDS last 6 mo.
Avg SP/sf
SP:LP
One-Story
26
$425/sf
67
$418/sf
98%
Two-Story
133
$355/sf
301
$337/sf
95%

If you prefer one-story homes, there aren’t many to consider, and the cost-per-sf premium of the solds is 24%!

When analyzing the comps, you can’t compare 1-story and 2-story homes together – they are two separate markets.

Here are two examples of one-story homes listed yesterday:

6678 Cabela, Carlsbad, 92011

6387 Huntington, Carlsbad, 92009

You can buy two-story homes that are 600-800sf larger nearby for the same price – or less.  But because both of these have other premium features (views, lower-maintenance yards, 3-car, and no pools), and the selection of one-story houses is scant, these two stand a good chance of selling promptly!

With 10,000 baby boomers turning 65 years old every day, it’s understandable that one-story homes are fetching a premium, which today appears to be 10% to 20% above two-story homes.

What is the combo premium for the one-story houses with the extras?  It has to be another 10% minimum, and for those that have it all, there is no ceiling.

It means that the method of selling will determine the outcome.

If the seller hires a regular realtor who compares the super-duper one-story to other two-story homes nearby, there will be money left on the table.

This is where the auction format could really pay off. Bidders are uncertain about calculating the value of the extra features, and getting them into a competitive environment will cause them to pay whatever it takes to win.

Get good help – hire a realtor who can evaluate the premiums, and create an auction-like format to ensure top dollar!

Posted by on Jun 11, 2016 in Auctions, Boomers, Jim's Take on the Market, Market Buzz, Market Conditions, One-Story | 1 comment

Current Market Trends

sf

Here are the thoughts of a two-percenter agent from the Bay Area about her market, which are probably about right.  Instead of wild bidding wars, there might only be one or two offers per house – which will leave sellers’ egos disappointed, but the market will survive.  Plus, more houses won’t sell – let’s face it, only about 60% of NSDCC listings actually close escrow.  P.S.  Have you noticed that most agents seem to be in the Top 1% or 2%?:

http://www.marketwatch.com/story/san-francisco-bay-area-housing-bubble-not-bursting-but-moderating-2016-05-17

The whole story – I bold-italicized the phrases where I had strong agreement:

Real estate markets are moving toward a “new normal” in the San Francisco Bay area. This is according to the local “feet on the street” stories I hear from top Bay Area Realtors.

The Bay Area housing bubble is not bursting. It is changing to what appears to be a “new normal.” Let’s look at the big picture to understand what we believe are the trends driving the current market and how we think they will continue to impact the market in 2016.

1: This is a high-stress market and it will continue

Buying or selling a home is usually prompted by a life event: death, divorce, marriage, relocation, job change and increase or decrease in family. These life events often bring stress and buying or selling a house adds to this stress. Add in the drama of a notably contentious presidential campaign, toss in the uncertainty of the financial markets and then add the pressure of the fast-paced expensive Bay Area market where decisions and offers need to be made quickly.

Unfortunately, all this is here to stay for a while. Yes, any normal person would be hard-pressed not to feel like they were in a tornado.

2: Low inventory of good homes will continue to drive pricing. However, buyer demand is becoming tempered and more deliberate

Yet another reminder that markets invariably change. While our group of top agents acknowledged the low inventory, they also recognized that buyers were becoming much more selective and deliberate. They look, they think and if they don’t “feel it” they move on. “Who cares if there is an offer date?” “Another day and another home will appear.” “Maybe the home won’t sell and we can buy it for less.” If they don’t see the value they pass.

As a client of mine once said during a previous hot market, “This market is so crazy even a burning house will sell.” Not so any more. Many agents believe sellers are seeing the last days when homes with deficiencies will sell quickly for top dollar. Great homes in great locations, priced fairly and marketed properly are selling. However, we are now beginning to see situations where even these homes only have one offer and sometimes, unfortunately, none.

3: Now more than ever you must play to win

While we don’t believe another downturn is on the horizon, having a Realtor with strategies to address even the slightest of market corrections is critical to success whether you are a buyer or seller. A San Francisco agent in our group told a story of a home with 12 disclosure packets out to potential buyers. When the offer date came his buyer did not make an offer. What happened? The buyer thought the home would sell outside his price range. Sadly for him, the home sold below what he was prepared to spend. The moral to the story is “nothing ventured nothing gained.” We are entering into a shifting market. Don’t be afraid to make an offer.

Finally: The bottom line is we are moving to a ‘new normal’

The “feet on the street” believe that the outlook for the rest of the year remains positive, but moderating, with a continuing but more purposeful demand for Bay Area housing.

Posted by on May 19, 2016 in Jim's Take on the Market, Market Buzz, Market Conditions | 4 comments

Nothing Price Won’t Fix

sv

A pullback in Silicon Valley? It could happen anywhere!

http://www.bloomberg.com/news/articles/2016-05-17/silicon-valley-mansions-linger-on-market-in-real-estate-slowdown

Excerpts:

A custom-built home in the heart of California’s Silicon Valley had its price cut by $500,000 last week after sitting on the market since the end of March — a move that would’ve been almost unfathomable a year ago and a signal that frenzied demand has peaked.

The six-bedroom, five-bath house in Palo Alto — located blocks from Stanford University and the homes of Google co-founder Larry Page and Steve Jobs’s widow, Laurene Powell Jobs — is now listed for $7.5 million. It joins a growing inventory of high-end homes in the area that are taking longer to sell.

“We’ve recently noticed a slowdown,” Jack Woodson, who works at Alain Pinel Realtors in nearby Menlo Park, said on a tour of the house in the Old Palo Alto neighborhood. “Buyers are taking more time to decide about making offers.”

Silicon Valley, the most-expensive U.S. housing market, is seeing a pullback by the wealthiest homebuyers after a four-year real estate boom marked by bidding wars and multimillion-dollar prices. Stock-market turmoil, a drop in foreign investors and concerns of a technology-industry slowdown are cooling demand at the high end, even as interest remains robust for more moderately priced properties.

In Palo Alto, an ultra-wealthy city that’s home to many Google and Facebook Inc. executives, homes costing more than $5 million were on the market for a median of 16 days in April, compared with 11 in the same month in 2015 and 10 in 2014, according to data from Irvine, California-based John Burns Real Estate Consulting. The 11 active listings in that price range as of May 14 have been on the market a median of 30 days.

“The seemingly inexhaustible well of very high-end buyers has proven exhaustible after all,” said Dean Wehrli, a senior vice president at John Burns. “The peak is behind us, and that’s becoming clearer and clearer to builders and buyers.”

“We’re probably moving toward normalization,” said Katharine Carroll, vice president at Pacific Union Real Estate in Palo Alto. “Buyers see that they have a few more options. They don’t feel the urgency that they have to decide on something right away and put an offer in. They can kick the tires a little bit more.”

http://www.bloomberg.com/news/articles/2016-05-17/silicon-valley-mansions-linger-on-market-in-real-estate-slowdown

Posted by on May 17, 2016 in Forecasts, Jim's Take on the Market, Market Buzz, Market Conditions | 1 comment

NSDCC Spring Kick Report

2016-04-16 15.56.17-2

We’re well into the spring selling season (May 1st is twelve days away), and soon the talking heads will be touting fewer sales this year, compared to 2015.

It is short-sighted though, because 2015 was a great year, statistically.  When you consider that prices are still strong, and any softness in the market is at the high-end where hopefully sellers can endure, it’s hard to complain!

NSDCC Detached-Home Sales between March 1 – April 15

Year
# of Sales
Median SP
Avg. $/sf
2012
345
$813,500
$367/sf
2013
438
$873,250
$406/sf
2014
351
$1,030,000
$494/sf
2015
419
$1,100,000
$496/sf
2016
365
$1,142,331
$525/sf

Whether the demand is getting more picky or just taking a breather, to still have 365 sales after a 40% price hike in four years is phenomenal.

Posted by on Apr 19, 2016 in Jim's Take on the Market, Market Buzz, Market Conditions, North County Coastal, Spring Kick | 2 comments

733 Stratford Drive

733-stratford-dr-076

I love my new Encinitas Highlands listing at 733 Stratford Drive, which is at the top of the hill and offers some of the best ocean views in EH!  This is another property that is ideally suited for the multi-generational buyers because there are bedrooms and full baths on the ground floor plus a detached 1br/1ba cottage out back.

This is my first real tour of a house with the new camera (and because I’m trying to move slower and smoother), so this is the extended full version of the whole property:

http://www.zillow.com/homedetails/733-Stratford-Dr-Encinitas-CA-92024/16718577_zpid/

Posted by on Apr 14, 2016 in Boomers, Bubbleinfo TV, Encinitas, Klinge Realty, Listing Agent Practices, Market Buzz, Osmo, Thinking of Buying?, Why You Should List With Jim | 3 comments

NSDCC Avg DOM, 1st Qtr

sell

Our low inventory has buyers starved for houses to purchase.  When they see a good one, they react immediately – an attractively-priced house will have people driving by within the first hour or two on the market!

Sellers should be aware, and expect to sell their house right away.

Those who don’t shine up their house before listing, or those who get exuberant about price – thinking they have plenty of time – will miss a golden opportunity.  The most desperate buyers are motivated to pay top dollar in the first few days on the market!

Here are the number of NSDCC houses sold up to $1,400,000 in the first quarter, ranked by days-on-market:

Avg DOM
2013 #/SP:LP
2014 #/SP:LP
2015 #/SP:LP
2016 #/SP:LP
0
19/97.0%
8/98.2%
6/91.9%
9/97.4%
1-14
205/99.5%
169/99.4%
160/98.6%
125/99.3%
15-30
80/97.2%
58/97.7%
65/96.7%
64/97.7%
31-60
68/96.5%
78/96.5%
83/96.7%
72/97.0%
61+
157/95.5%
96//94.8%
104/96.1%
89/95.9%

Sellers – you want to get your price, right?

The houses that sell closest to list price are those that go pending in the first two weeks.  These SP:LP ratios are based on the list price on the pending date – the price which typically needs to be lowered first to get a buyer to offer, because they know it isn’t working after the first few weeks.

Hire a listing agent who can handle the immediate urgency – Get Good Help!

Posted by on Mar 31, 2016 in Jim's Take on the Market, Market Buzz, Market Conditions, North County Coastal, Thinking of Selling?, Why You Should List With Jim | 0 comments