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Category Archive: ‘Market Buzz’

Trump and Local Real Estate

The inauguration is almost here – Trump will be your president on Friday!

How will he affect our local real estate market?

His detractors are aghast over his tweets, but Trump keeps them coming.  In spite of their bombastic nature, I think we are already numb to his tweets, or at least getting used to them being part of the landscape.

At this point, I don’t think the Trump Effect will have much, if any, impact on us – positive or negative.  If rates stay under 5% (today’s 30Y is 4.12%), buyers should shrug it off and keep buying.

I also think sellers and agents are getting smarter about price, which will help tremendously.  As you saw in the previous post, they might screw it up a bit once they hit the market, but eventually buyers and sellers should both be happy with a modest appreciation rate of 2% to 4% this year.

The #1 thing that should keep our market stable is the buyers’ focus on getting the right house for the long-term.  Before the 2007 downturn, buyers thought they could always sell for a gain, and, as a result, any house would work for the short-term.  But after our so-called ‘crisis’, we recognize prices can go down – but it only hurts if you sell.

Sales and prices may bounce around, but with the focus on the long-term as a foundation, our market should keep cooking.

Posted by on Jan 17, 2017 in Forecasts, Jim's Take on the Market, Market Buzz, Market Conditions, North County Coastal, Sales and Price Check | 2 comments

Traffic Doesn’t Equal Offers

By now, the low-inventory/fast-market has trained the motivated buyers to be on red alert.  If a new listing pops up that looks remotely interesting, those buyers know to get over there quick for a peek.

This presents a major problem for the sellers and listing agent.

Once the parade of lookers descends upon the new meat within hours, it is irresistible for the ego to go wild, and it causes sellers and listing agents to have visions of lottery-type money.

It is so much fun, they want it to last forever! They are so excited!

Savvy buyers know that if this is THE house, they need to make an offer promptly.  It makes the equation quite simple – sellers will receive offers from the motivated buyers within the first 2-3 days.  All you have to do is counter for every buyer’s highest-and-best offer, and by Day Four the buyer who will pay the most will emerge.

But what usually happens?

The overly optimistic buyer-agents get all giddy and tell the listing agent that they think they will be making an offer.  But a funny thing happens to buyers once they roll down the street for a couple of blocks – all the reasons NOT to buy that house come up, and most buyers talk themselves right out of it.  At least half of the people who threaten to make an offer never do.

What if you are a motivated buyer, and make a great offer in the first 1-2 days?  It happens regularly that sellers and listing agents will pooh-pooh a great early offer, and hope that there are two in the bush.

What can buyers do?  You only have one option, and that is to walk away if you don’t get a response by the time the offer expires.  At least if you threaten to quit, it should hopefully get their full attention.

Sellers and listing agents think that lots of visitors = lots of offers.  But most visitors don’t offer – they’re just visiting.  In virtually every case, the no-offer rate is at least 90%, but sellers ignore that and are convinced there has to be two or more in the bush.

Here’s today’s example:

The seller paid in the low $700,000s in late-2012, and didn’t add anything but lipstick since. We initially offered $1,275,000 last week, and sure got the feeling that we were getting shopped around – the listing agent kept reminding me that there were other offers expected.  So we put a deadline of 1:00pm today to accept our $1,300,000 counter-offer.  Two hours after our deadline, the seller countered $1,339,000, which was just $6,000 under their first counter.  They called it their final offer, and it wasn’t a multiple-counter, so no other offers were on the table.

The sellers paid low-$700,000s, and couldn’t live with $1,300,000 – they had to have an extra $39,000, or the deal was off.

My buyers stuck to their guns, and instead we were off to a new listing that was priced well under this one.

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Posted by on Jan 16, 2017 in Bidding Wars, Jim's Take on the Market, Market Buzz, Thinking of Buying?, Thinking of Selling?, Why You Should Hire Jim as your Buyer's Agent, Why You Should List With Jim | 2 comments

Watch the Dogs

How do you know if the market conditions are improving? There are the regular indicators to watch to judge whether market momentum is building:

General Market Indicators

Number of Sales is steady or rising.

Pricing is steady or rising.

Average Days on Market is low and dropping.

Months of inventory is tight and dropping (currently 3.0 in NSDCC)

Mortgage rates aren’t jumpy.

Bidding Wars.

The professor says so.

But those are mostly feel-good stats and known well after the fact.  How can we know which way the market is breaking in real time?

You can expect the well-kept, beautifully staged homes to sell, and most anything with an attractive price should go quickly too.  Those with a recent tune-up will be more popular, and having a hot-ticket item will help – great location, one-story, newer, top schools, culdesac, beachy, and walkable.

The best tell-tale signs of market momentum is how the inferior homes do. Make a note when you see a house in this category, and if a few of these go pending around you, then you know the market is starting to cook:

Homes in bad locations.

Houses with long market times (90+ days)

Houses in original condition.

Anti-staging – a house full of old furniture.

Funky floor plans.

Tough listing agent

A house listed for a price you think is ridiculous.

Wait until the sale is closed to confirm the actual sales price before jumping to any radical conclusions – maybe the sellers had to give one away.  Besides, it might only mean that a few weak, anxious buyers dived in too high, too soon, and their agents didn’t stop them.

If you see inferior homes starting to pile up – especially those who lowered their price with no luck – then you know the buyers are winning.  When you see a series of inferior homes sell for retail or close, then you can expect the sellers’ confidence to be brimming, and momentum on their side.

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Posted by on Jan 9, 2017 in Jim's Take on the Market, Market Buzz, Market Conditions, One-Story, Tips, Advice & Links | 2 comments

Inventory Watch

I heard of four bidding wars over the weekend – we’re right back at it!

No surge of listing either, which is a leading indicator of how the selling season will break.  The first two January readings of weekly new NSDCC listings:

2014: 138

2015: 121

2016: 122

2017: 108

Expect that the one-story houses will be red hot!

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

Read More

Posted by on Jan 9, 2017 in Inventory, Jim's Take on the Market, Market Buzz | 0 comments

Measuring the Start of 2017

Every prognosticator has released their cautious predictions for the year, but how will we know what’s happening in the meantime?

  1. How will buyers know if it’s safe to go back in the water?
  2. How will sellers know if they can pack another 5% on to their price?

There are two ways we can get a sense of the initial enthusiasm, and by the end of January it should become more clear on which way the market is breaking.  Last year, our start was already slightly slower than the previous two years, but close enough that there wasn’t any panic.  Buyers kept buying, and for the most part, they paid what the sellers wanted.

NSDCC Monthly Sales

Year
December
January
February
Totals
2013-14
211
182
180
573
2014-15
250
165
170
585
2015-16
253
168
144
565
2016-17
215

If we close 150 sales in each of the next two months, and hit 515 for our 3-month total, I think we can say our market is surviving. But we can dig deeper to see what will have caused those results.

January New Listings and New Pendings

Year
January New Listings
January New Pendings
2014
307
176
2015
273
163
2016
320
140

Yes, there will be several old listings being ‘re-freshed’ this year – in the first week of last year, about 70% of the new listings had been re-inputted.  But it is like that every year.

Keep your eye on the number of new pendings. If we can get close to last year’s 140, we should be fine, but the wait-and-see trend has been building.

The new listings will play a role – if there is a surge of fresh meat, it could cause rate-sensitive buyers to jump in now if they see something decent. But rates should moderate, keeping buyers picky.  If there aren’t many current owners willing to sell, then we could have fewer pendings but healthy conditions. Let’s compare the two as we go!

Posted by on Jan 3, 2017 in Jim's Take on the Market, Market Buzz, North County Coastal, Sales and Price Check, Why You Should Hire Jim as your Buyer's Agent, Why You Should List With Jim | 0 comments

Impact of The Election

Image result for trump

We’ll be fine….if sellers stay realistic.

Our real estate needs are just as they were prior to the election—the demand’s there, even with the uncertainty of what’s to come. That’s according to a just-released report by realtor.com®, which surveyed its homebuyer users’ perceptions toward housing in the wake of the election.

Seventy-nine percent of those surveyed said the election had “no impact” on their plans to buy a home, and, in fact, 10 percent said they were more likely to buy a home now that the new administration has been determined—distributed primarily among those aged 45-64, men and those in red states.

The opposite (those under 45, women and those in blue states) said they were less likely to buy, with millennials posting the highest percentage.

The non-effect of the election is also reflected in the traffic patterns on realtor.com—according to the report, listing views on the site have tracked back up to 15 percent since the election, in line with the growth experienced over the summer. Listing views tend to lead demand.

Read full article here:

http://rismedia.com/2016/12/07/non-effect-would-be-homebuyers-unshaken-election/

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Posted by on Dec 8, 2016 in Jim's Take on the Market, Market Buzz | 1 comment

San Diego #6

rankings

In spite of record pricing, our NSDCC new-listing count this month is going to come in under last November’s count. Remember when greed was good? Apparently, staying put is better!

http://www.realtor.com/news/trends/20-hottest-markets-real-estate-u-s-november-2016/

While the nation is getting ready to digest massive amounts of turkey, the economic team at realtor.com® has digested a ton of data from our site for November. And though we’re a few days from the end of the month, we can go out on a limb and say it’ll be yet another month of record-low levels of housing supply, strong demand, and (not coincidentally) record-high prices.

The median list price looks to remain at $250,000 for a fourth straight month. That’s 9% higher than last year at this time, and sets a new record for November.

“After an eventful election, demand for real estate appears to be carrying momentum going into the holiday season,” says Javier Vivas, manager of economic research for realtor.com. “We  expect that to be put to the test, as mortgage rates sky rocket to new highs. But the economic foundations remain strong and most forecasts expect growth as we enter the new year, which should keep waves of buyers intent on entering the market.”

Viewing activity on our site shows that there’s still plenty of demand from buyers on the prowl for a home. But inventory of homes for sale is down 5% from October, and 11% compared with November 2015. It’s that combo of low supply and high demand that’s keeping prices high. And with only 363,000 new listings entering the market in November, the pickings will be even slimmer next month.

Although homes are selling a wee bit slower these days, as is typical in fall, they’re still moving 1% faster than last November. We’re projecting that homes for sale will have spent a median 82 days on market for November, three days slower than last month.

Posted by on Nov 23, 2016 in Forecasts, Jim's Take on the Market, Market Buzz, North County Coastal | 0 comments

Walkable

walkable

Being walkable – living close to services – is a hot button for buyers these days, especially among the older set.  Here’s an article that backs it up – and may cause you re-think the McMansion in the ‘burbs.  Thanks daytrip!

Few people in America walk to work. Most of us drive to the supermarket. But more older people these days are looking for a community where they can enjoy a full life without a car.

Ben Brown and his wife, Christine, say they weren’t thinking about retirement when they moved to Franklin, N.C., a small, lovely town nestled in the Smoky Mountains near Asheville, a haven for many East Coast and Midwest retirees.

“We loved the idea of living in a small town in a rural mountain area,” Mr. Brown recalled. “And we converted a summer house to a year-round home to suit our tastes.”

Yet Mr. Brown, a 70-year-old writer, and his 66-year-old wife said they had second thoughts as they made the transition toward retirement.

“We realized ‘aging in place’ means a lot more than just a comfortable house,” Mr. Brown said. “So we began thinking more about ‘aging in community.’ That means an urban neighborhood where you can walk or take transit to just about everything you need.”

Then they discovered West Asheville, a vibrant, urban neighborhood that is brimming with trendy new restaurants, inviting shops and a number of bus routes into the larger city next door. Nearly every place they wanted to go was within walking distance, a major benefit for those who don’t want to drive everywhere as they get older.

“We always thought we’d end up in an urban environment,” Mr. Brown added. “We’re in one of the few places where you can comfortably live without a car in a growing, mixed-use neighborhood.”

In the age of the Fitbit and a growing cohort of active, engaged retirees eager to take their daily 10,000 steps, retirement communities have been slow to change. Eighty percent of retirees still live in car-dependent suburbs and rural areas, according to a Brookings Institution study.

Developments for independent retirees typically come in two flavors: isolated, gated subdivisions or large homes on golf courses, often in the same bland package of multiple cul-de-sacs. Both require driving everywhere, which is a problem for those who either don’t want to drive or can’t.

Enter a new paradigm: the walkable, urban space.

It may range from existing neighborhoods in places like Brooklyn or San Francisco to newly built housing within city and suburban cores from coast to coast. Though not primarily for retirees, places like Reston, Va., and Seaside, Fla., were early examples of the new urbanism built from the ground up. Among senior housing projects, examples include Waterstone at Wellesley along the Charles River in the Boston area and The Lofts at McKinley in downtown Phoenix. The theme is simple: Get out and walk to basic services.

Walkability, though, is much more than a hip marketing pitch. It’s linked to better health, social engagement and higher property values.

Read full article here:

http://mobile.nytimes.com/2016/10/15/business/the-future-of-retirement-communities-walkable-and-urban.html

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Posted by on Nov 21, 2016 in Jim's Take on the Market, Market Buzz, The Future | 4 comments

8,000,000 Millionaires in U.S.

mb

Here’s how we got here, and why it will probably continue – H/T daytrip!

http://www.bloomberg.com/news/articles/2016-11-21/cheer-up-america-1-700-millionaires-are-minted-every-day

The U.S. is home to a working class suffering from stagnant incomes and declining job prospects—widespread struggles that helped elect Republican Donald Trump. The relative wealth of Americans in all age groups keeps falling, compared with previous decades.

At the same time, the country is also home to an unprecedented amount of wealth, a divergence that has made income inequality a household phrase. America has $55.6 trillion in private financial assets and more millionaires than any other nation in the world by far. Today, more than 8 million households have financial assets of $1 million or more, not including homes or luxury goods, according to Boston Consulting Group. From 2010 to 2015, the number of millionaires jumped by 2.4 million. Another 3.1 million will be created by 2020, BCG estimates, at the pace of 1,700 new American millionaires every day.

But before your faith in upward mobility is restored, realize this: The very oldest Americans hold a disproportionate chunk of all those trillions, and they’re handing it off to their already well-off kids in what is the largest generational transfer of wealth in history.

Inheritance is an increasingly significant driver of wealth in America. Wide swaths of the country live from month to month with virtually no savings safety net. About three-quarters of the country are “strugglers,” unable to save anything from year to year, the Federal Reserve Bank of St. Louis concluded in a study last year. The other quarter of the country, however, are “thrivers,” the St. Louis Fed said—people who successfully save money and accumulate wealth over the years. These include the top 1 percent, who have steadily taken more and more of the nation’s economic output.

Being a millionaire isn’t what it used to be. A net worth of $1 million has the same buying power today that $341,000 did in 1980 and that $45,000 did 100 years ago, according to Bureau of Labor Statistics data. If you’re making six figures and saving regularly, you should eventually end up with a million dollars or more in your investment accounts. (You’d better, since you’ll need to save that much to have any hope of maintaining your lifestyle in retirement.

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Posted by on Nov 21, 2016 in Frenzy, Jim's Take on the Market, Market Buzz, The Future | 4 comments

Party Palace

bh

http://la.curbed.com/2016/11/18/13680508/mansion-rentals-house-parties-ordinance-airbnb

There are a lot of headaches that come with homeownership in Los Angeles, property values, repairs, whether or not your neighbors are a German millionaire couple who have made it their stated goal to show LA “what it means to make party.” (It involves bikinis and caged lions).

Extravagant parties in once quiet (and wealthy) neighborhoods are becoming a lot more popular now that party planners and real estate agents have short-term rental websites such as Airbnb at their disposal. BizBash, an online resource for party and event planning professionals, has seen a 60 percent increase in searches for private homes and mansions on its venue directory, according to The Real Deal.

The real estate news website says party hosts shelling out sums ranging from $20,000 to $500,000 to throw weekend soirées in some of LA’s most lavish houses.

The problem is apparently so widespread, the Los Angeles City Council is weighing in. It has asked the City Attorney to draft an ordinance that would punish partying tenants and homeowners. The Real Deal says impending ordinance has some homeowners, event planners, and realtors concerned.

Along with this increased demand for party rentals, companies such as Along Came Mary have sprouted up to assist in event production. For a fee, it will find a willing homeowner and negotiate a rental price, set the menu, take care of all the small details, and clean up the place when it’s done. One recent Along Came Mary event for the Hallmark Channel came with a price tag of $45,000 for three days.

Yes, corporate entities are also using private homes as branding opportunities.

And, it’s not just brand awareness that party hosts are after. Sometimes parties are thrown for the house itself. Instead of a boring open house, big bashes are thrown to show off newly listed homes.

Luxury realtor Michelle Oliver tells The Real Deal that for some clients, she’ll “hold a special invitation-only event at a mansion I am selling, with catering and valet parking.” To get even more exposure for the home, Oliver will even “partner with a high-end magazine and media for targeted coverage.”

The City Council’s new party ordinance was probably aimed at preventing neighborhoods from having to look at “strippers dancing on kitchen countertops,” but they may have picked a fight with big business instead.

Posted by on Nov 18, 2016 in Jim's Take on the Market, Market Buzz | 1 comment