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Category Archive: ‘Market Buzz’

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

Are Rising Rates A Problem?

rate-history

Are rising rates that big of a deal?

Maybe – and only if they mess with the buyers’ psychology.

We have been spoiled with rates in the mid-3s for the last six months – including jumbos – and our local market has been cooking. Buyers have been hoping for any break, but if they find the right house at a decent price, will an extra 1/2% on rate stop them?

Probably not – we are lucky to live in a very affluent area, where the majority of houses sell for more than $1,000,000:

NSDCC Detached-Home Sales, Jan-Oct

Year
Total # of Sales
Median SP
Sales Over $1M
% of Total
2012
2,619
$825,000
907
35%
2013
2,820
$946,944
1,272
45%
2014
2,427
$1,022,000
1,243
51%
2015
2,578
$1,089,450
1,430
55%
2016
2,536
$1,160,000
1,548
61%

Some buyers will dig in just on principle – if they have to pay a higher rate, logically the seller should be more flexible on price. But if the right house is found, and wifey kicks you in the shins and says ‘buy the house’, the extra half-point isn’t going to matter.

Especially in these areas:

Percentage of Detached-Home Sales Over $1M, Jan-Oct, 2016:

La Jolla, 92037 = 97%

Del Mar, 92014 = 97%

RSF, 92067 = 100%

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Posted by on Nov 15, 2016 in Interest Rates/Loan Limits, Jim's Take on the Market, Market Buzz, Market Conditions, North County Coastal | 0 comments

Chinese Demand Accelerating?

More optimism about Chinese buyers purchasing overseas:

Welcome to ground zero for the world’s largest cross-border residential property boom. Motivated by a weakening yuan, surging domestic housing costs and the desire to secure offshore footholds, Chinese citizens are snapping up overseas homes at an accelerating pace. They’re also venturing further afield than ever before, spreading beyond the likes of Sydney and Vancouver to lower-priced markets including Houston, Thailand’s Pattaya Beach and Malaysia’s Johor Bahru.

The buying spree has defied Chinese government efforts to restrict capital outflows and shows little sign of slowing after an estimated $15 billion of overseas real estate purchases in the first half. For cities in the cross-hairs, the challenge is to balance the economic benefits of Chinese demand against the risk that rising home prices spur a public backlash.

“The Chinese have managed to accumulate very large amounts of wealth, and the opportunities to deploy that capital in their own market are somewhat restricted,” said Richard Barkham, the London-based chief global economist at CBRE Group Inc., the world’s largest commercial property brokerage. “China has more than a billion people. Personally, I think we have just seen a trickle.”

“Properties in Shanghai are ridiculously expensive,” Chen Feng, 38, said as he evaluated prospects at a property fair in Shanghai in September, lured by television commercials for the event the night before. “With the amount of money it takes to buy a small apartment here, I can buy a building of apartments in many places in the world.”

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Posted by on Nov 15, 2016 in Jim's Take on the Market, Market Buzz | 3 comments

Happy November!

nov

It would be natural to assume that sales start dropping off once we get into November.  But do they?

Not really.

November has the most holidays of the year (three) when the county recorder’s office is closed.  Let’s compare the number of NSDCC closings per business day:

Year
October Closings Per Day
November Closings Per Day
2012
12.9
12.7
2013
11.6
10.4
2014
10.6
10.1
2015
9.8
10.7
2016
11.3
???

You can see that November usually keeps up with October as far as number of closings per day – and November exceeded October sales per day last year!

In spite of the election, we are coming off a hot October.

Last month’s 11.3 is based on this morning’s count.  There will be late-reporters that will drive the number close to 12 – like it was during the 2012 election, which was also the beginning of the Real Estate Frenzy of 2013.

I don’t think we are heading for a frenzy next year, but with rates up slightly, it looks like this month is going to be sizzling!  There are 398 pendings today!

Posted by on Nov 1, 2016 in Frenzy, Jim's Take on the Market, Market Buzz, Sales and Price Check | 0 comments

Home Buyers Paying Cash

cas

Back in the foreclosure era, cash buyers were everywhere, gobbling up all the deals. Many pundits thought that once the investors pulled out, the market would collapse.

But a funny thing happened on the way to the apocalypse.

It turns out, buyers love to pay cash!

They are buying the higher-end properties too, which is understandable – nobody is spending their last million or two on a house.  These cash buyers probably had at least 5x the sales price in the bank!

NSDCC Detached-Home Sales, First Nine Months (Jan – Sept.)

Year
Cash Sales
Median SP
Non-Cash Sales
Median SP
Cash %
2009
290
$1,105,500
1,290
$781,000
18%
2010
400
$1,007,500
1,485
$800,000
21%
2011
426
$1,032,500
1,554
$805,000
22%
2012
551
$975,000
1,771
$795,000
24%
2013
639
$1,015,000
1,915
$925,000
25%
2014
579
$1,283,600
1,604
$950,000
27%
2015
603
$1,878,158
1,759
$1,000,000
26%
2016
614
$1,402,500
1,659
$1,090,000
27%

The depth of the affluence isn’t surprising, it is the breadth.  There have been 1,465 NSDCC house sales that have closed for more than $1,000,000 this year!

It puts pressure on the financed buyers. In virtually all bidding wars, the financed offers are ignored, and just the cash offers get entertained. Financed buyers would be smart to lower their sights and pick off a fixer.

Posted by on Oct 17, 2016 in Jim's Take on the Market, Market Buzz, Market Conditions, North County Coastal | 0 comments

Food Marketing

great salespeople

From the wsj.com:

Manuela Manetta went to the Seattle Street Food Festival last month thinking about Afghani naan bread and hot dogs. She came home with a new condo.

While walking through the festival, the 33-year-old squash coach stumbled upon a booth hosted by the sales team for Nexus, a high-rise condo with a daring design that starts construction in November in downtown Seattle. The booth had a lounge area, along with architectural models and video tours with renderings of the building. Ms. Manetta and her partner put down a deposit for a $350,000 one-bedroom unit. “It was completely out of the blue,” says Ms. Manetta, who currently lives in a condo in Seattle’s Belltown district.

In all, seven condos were reserved for pre-sales by the Nexus team over the festival weekend and following Monday, according to the sales team. The building, which will have 374 homes ranging from the low $300,000s to $3 million, is scheduled for completion in mid-2019.

Real-estate developers and brokers are increasingly using food festivals, private dinner parties and other epicurean events to sell high-end homes. The affluent tend to be food enthusiasts with cosmopolitan tastes, they say. Food festivals in particular, which bring together communities, tap into a need for social affiliation that helps sell homes, says Joseph Sirgy, a real-estate professor of marketing at Virginia Tech’s Pamplin College of Business.

“Food and wine is the new golf,” says W. Bryan Byrne, sales director at Palmetto Bluff, a 20,000-acre development in Bluffton, S.C., where homes range from the $800,000s to $6 million; homesites start at $150,000 and can top $2 million.

Read full article here:

http://www.wsj.com/articles/how-food-festivals-sell-homes-1473948962

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Posted by on Sep 15, 2016 in Jim's Take on the Market, Listing Agent Practices, Market Buzz | 2 comments