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Category Archive: ‘Market Buzz’

More Multi-Gen

This is an increasing trend that has many effects on the overall market – both good and bad. From cnbc.com:

http://www.cnbc.com/2016/02/08/under-one-roof-multigenerational-housing-big-for-builders.html

An excerpt:

That’s exactly how it works for Jennifer Michaels and her mom.

“Sometimes, it’s a quick little, ‘Hey, honey how are you?’ and other times we’ll play a board game together out here, but I literally have gone three days without seeing her,” said Michaels.

Economics certainly plays into the multigenerational mindset, but there may be a cultural shift as well.

“The baby boomers were just very unique; they are really the only generation in history that would move out of the house as soon as they go out of high school or college,” said Burns.

Lucy Abbott likes the security in knowing that if she has a problem, help is just a hallway away, but that is more of an added benefit than a driver of her living situation.

Posted by on Feb 8, 2016 in Downsizing, Jim's Take on the Market, Market Buzz, Market Conditions, One-Story | 3 comments

NSDCC January Sales & Pricing

Feb rates
January house sales between La Jolla and Carlsbad look pretty good, given the higher pricing and TRID fumbling.

Our good luck with sales should continue – rates are lower this month, plus February actually has one more business day than January, thanks to leap year!

NSDCC January Sales and Pricing

Year
# of Sales
Avg Cost-per-sf
Median SP
Days on Market
2012
155
$374/sf
$760,000
108
2013
185
$379/sf
$845,000
69
2014
182
$501/sf
$1,072,500
60
2015
165
$507/sf
$1,218,000
73
2016
160
$555/sf
$1,077,500
52

I wouldn’t worry too much about the median sales price being lower, because the monthly comparisons have smaller sample sizes and more easily affected by the different mix of houses. The number of sales will probably catch last year’s count once the late-reporters are done, and the brisk 52 DOM is really cooking, given the higher pricing.

Posted by on Feb 4, 2016 in Jim's Take on the Market, Market Buzz, Market Conditions, North County Coastal | 0 comments

‘Rich Enclaves’

rich

If the real estate market is just for rich people now, then maybe having a thriving job market nearby won’t be as important.  Rich people can live anywhere, can’t they?

If so, then San Diego should reap the benefit. Rich people looking for the best weather should keep coming here – we might even be under-valued?

Hat tip to daytrip for sending this in from cnbc.com:

Mansion prices show no signs of slowing in rich enclaves such as the Hamptons, Beverly Hills and Aspen, suggesting that the global market panic has yet to spread to top trophy homes.

According to sales data from Douglas Elliman, the median sales price in Beverly Hills for a single family home jumped 54 percent in the fourth quarter over the same period last year, to $5.5 million. In Aspen, the median single-family home price increased 35 percent to $6.7 million and 2015 was the market’s best year ever for sales.

In the Hamptons, a record number of homes sold for more than $5 million and more than $10 million in the fourth quarter.

Granted, the figures only cover the fourth quarter, before this year’s rout in financial markets. And the first quarter numbers could show a decline. But the numbers suggest that at least the end of last year — when jitters about China and global growth were already starting to rattle markets — the rich still saw real estate as a strong investment.

And while the most expensive homes in broader markets may be slowing, sales in the marquee “ego-towns” like Beverly Hills and Aspen keep growing.

Read more here:

http://www.cnbc.com/2016/01/28/mansion-prices-hit-new-highs-in-rich-enclaves-like-hamptons-beverly-hills-aspen.html

Or is the higher-end market starting to feel it around the edges?

http://www.bloomberg.com/news/articles/2016-01-26/at-3-68-million-this-california-home-has-everything-but-buyers

Posted by on Jan 29, 2016 in Jim's Take on the Market, Market Buzz, Market Conditions | 3 comments

San Diego Downtown Condo Market

sd downtown

From the wsj.com – hat tip to my Uncle Bob for the article!

http://www.wsj.com/articles/san-diegos-downtown-gets-the-big-city-treatment-1452178518

An excerpt:

A 41-story luxury condo building is on the rise. Boasting a screening room, a swimming pool and a boat-share program, its 215 units will soon be going on the market at prices starting at $1.4 million.

The building is downtown San Diego, an area with a seedy past. The median sale price in the neighborhood last year was $741,500, according to real-estate website Trulia.

San Diego has long been a car-centric city, dominated by suburban-style subdivisions and gated communities. Now, that’s changing. Cranes downtown mark where new office towers, luxury condos and hotels will soon join the skyline. Restaurants with upscale comfort-food menus and hidden speakeasy bars line revitalized street fronts. Though downtown’s revitalization has had several waves over the years, the latest is higher-end, and picking up quickly post-recession. The population of downtown is about 30,800 residents—a 76% increase since 2000—and more than 9,000 apartment and condo units are currently in the pipeline for development.

Brad Termini, the co-CEO of Zephyr, a San Diego-based developer of high-end housing, said buyers want to be able to walk to neighborhood amenities. “We’re seeing a real flight out of suburbs like Rancho Santa Fe because of the lack of walkability and the high cost of maintaining those estates,” he said, referring to a wealthy suburban area in north San Diego County full of gated developments and large, luxury estate homes.

A few months ago, Huey and Suzanne Antley sold their home in the northeast edge of San Diego and bought a 1,000-square-foot condominium in the Marina district downtown, a neighborhood known for its high-end condos, parks and touristy Seaport Village. The couple paid about $600,000 for their condo, which is near a park where they can walk their dog.

There is no sign of a slowdown. Ms. Michell, of the Downtown Partnership, says that over the next 30 years, the city’s population is forecast to grow by an additional 1 million residents.

Marsha Sewell, an interior designer and general contractor, moved downtown in 1991 to convert a 100-year-old mixed-use building into a single-family home. Then she purchased another historic building for $600,000, rehabbed it and sold it for $2 million. A few months ago she moved into a 3,200-square-foot condominium she paid $1.075 million for and has just completed renovating.

“The prices are only going to go up, and at the high-end of the market people really want space,” she says.

Read full article here:

http://www.wsj.com/articles/san-diegos-downtown-gets-the-big-city-treatment-1452178518

Posted by on Jan 9, 2016 in Downsizing, Jim's Take on the Market, Local Flavor, Market Buzz, Market Conditions | 2 comments

No More Doom

govt loves bubbles

As a new year begins, there has to be people wondering how much longer the market can stay buoyant.  Even with rates staying low, home buying is out of reach for many, if not most San Diego residents, and wages don’t seem to be going up much.

Is the bubble going to pop again?

This guy has been our perpetual doomer, and is one of the only four ‘experts’ out of 108 who said that prices could go down in the next five years. He has summarized all the reasons of possible doom here:

http://mhanson.com/archives/1968

The thing he ignores is that the government is totally supportive of housing.  They bailed us out last time, and it left an indelible mark.

The turning point for The Big Bailout was in 2011 when Bernanke literally told the banking industry to ‘not do anything to harm the economy’, which was code for ‘Stop Foreclosing’:

http://www.bubbleinfo.com/2014/03/03/bernanke-stopped-the-flood/

Since then, the number of  foreclosures have dropped like a rock, and after Kamala passed the California Homeowners’ Bill of Rights, lenders are required to coddle defaulting homeowners for as long as possible.

The result is a very soft landing for any borrower who doesn’t feel like making their payments.  The banks can stretch out any necessary foreclosure activity for months or years, and spread them around evenly so they don’t ‘harm the economy’.

If you are a potential home buyer who is concerned about future foreclosures causing home prices to drop, I hope that relieves any fears.  Buy a house you can comfortably afford, and stay forever.

For those who want to check for foreclosures, see below:

Posted by on Jan 5, 2016 in Foreclosures, Jim's Take on the Market, Market Buzz, Market Conditions, Thinking of Buying? | 2 comments

Zillow San Diego Forecast 2016

la jolla 2016

Most national forecasts are predicting a 3% to 4% appreciation rate for 2016, which has to be a safe bet.  If it comes in anywhere from -2% to +8%, you can say that you were close.

Zillow has enough algorithms that they are willing to make predictions for each local area.  They have conflicting numbers, depending on where you look on their website – these are from the Home Values section:

http://www.zillow.com/home-values/

You can see that Zillow was less optimistic last year too.  Most were predicting that mortgage rates would be in the mid-4s by now, so the lower rates in 2015 helped fuel higher-than-expected prices.  Could rates stay right where they are? Maybe, but both Zillow and I think the euphoria will die down next year:

Zillow Price-Appreciation Predictions

Town
2015 Prediction
2015 Actual
2016 Prediction
“Market Temperature”
Carlsbad
+2.7%
+4.8%
+1.9%
Cool
Carmel Valley
+0.3%
+5.4%
+1.4%
Cold
Del Mar
+5.5%
+1.1%
+1.4%
Very Cold
Encinitas
+0.6%
+8.3%
+2.4%
Warm
La Jolla
+2.7%
+6.6%
+2.3%
Very Cold
RSF
+0.4%
+11.1%
+3.7%
San Diego
+1.7%
+6.4%
+2.1%
Warm
Solana Beach
+2.7%
+6.4%
+2.2%
Cold

For some reason, Zillow is also labeling each market from Warm to Very Cold.  The labels don’t seem to correspond to the predictions, so I don’t know their intent – are they just trying to tell you to put on a sweater?

How will buyers feel about getting worked over for that last 2% to 3% when they see they are in a ‘Very Cold’ market?

Posted by on Dec 28, 2015 in Carlsbad, Carmel Valley, Del Mar, Encinitas, Forecasts, Jim's Take on the Market, La Jolla, Market Buzz, Market Conditions, Rancho Santa Fe, Solana Beach | 2 comments

No Inventory?

lotsahouses

In the video below, the economist reiterates that the inventory is so low that there aren’t any houses to buy – that the ‘shelves are bare’.

It is the view of the casual bystander.

This is the new normal – a market for serious participants only.

Buyers have to be grinding day in and day out, and be willing to kiss a few frogs before finding the right house.  Sellers have to be sharp on price, and smartly tune up the house prior to listing in order to make a good first impression.

The confluence of those two groups make for a very active marketplace.  We’ve already closed more NSDCC sales this year than last year, and the 2015 total will easily end up well over 3,000 sales:

Year
# of NSDCC Detached-Home Sales
Avg. Days on Market
2011
2,562
85
2012
3,154
80
2013
3,218
50
2014
2,849
51
2015
2,934
49

Why does it appear that there is no inventory?  Because sales are happening at a rapid pace – 38% of the NSDCC houses sold this year found a buyer in the first two weeks.

An example: A new listing hit the market at the end of last week, and our ready, willing, and able buyer with a 20% down payment made an offer. By Monday the listing agent had received four offers – two were all-cash, and one of those was over list price!

During the week of Christmas!!

The potential buyers who only check in occasionally will miss the hot buys – they don’t have their chops up enough to recognize them, and instead just see the over-priced turkeys that have been picked over by everyone else.  Casual seller-candidates will see the same, and think adding the extra 10% is a good idea – just in case.

Get Good Help!

Posted by on Dec 23, 2015 in Jim's Take on the Market, Market Buzz, Market Conditions | 3 comments

More Crowdfunding

wtc

Crowdfunding is getting bigger and more diverse, and it gives an investment vehicle  to those who can’t – or don’t want to – put all their eggs in one basket and buy properties individually.  This company opened an eREIT, did an interview with Forbes, and, in one day, took in all the money it could handle:

Just one day after announcing plans to open its next investment opportunity, Fundrise debuted what’s dubbed as the world’s first eREIT.

The crowdfunding platform shared:

“Commercial real estate has historically been one of the best performing investment assets. Investors whose portfolios have up to 20% allocated to real estate have outperformed those with only stocks and bonds. Until now, investing in commercial real estate has been restricted by either very large minimum investments or the need to go through middlemen who charge high fees, negatively impacting returns. The Fundrise eREIT has a minimum investment of $1,000 with approximately one-tenth the average fees of similar traditional channels.”

Fundrise noted that the eREIT uses the latest technology to offer investments directly, online. This increased efficiency allows us to reduce overall costs, and provide greater transparency. It is similar to an ETF or mutual fund but instead of investing in stocks, you are investing in what is intended to be a diversified pool of commercial real estate assets.

It was also revealed that the eREIT’s primary objective is to provide investors with a low-volatility income stream of consistent, attractive cash distributions generated from commercial real estate investments. Cash distributions are expected to be paid every quarter.

Update: Fundrise’s initial $1 million processing window has exceeded the subscription amount by 503%. As a result, the platform are currently restricting available investment while it complete the initial processing.

Read full article here:

http://www.crowdfundinsider.com/2015/12/78224-fundrise-makes-investment-history-by-opening-worlds-first-ereit/

Posted by on Dec 4, 2015 in Jim's Take on the Market, Market Buzz, Market Conditions | 0 comments

San Diego #3 Hottest Market

This guy doesn’t come off any better than Yunnie, and you get the feeling they both are just talking their book.

He doesn’t go detail about his rankings, but he has the San Diego-Carlsbad region rated #3 in the Top 10 of the hottest markets in the country!

From cnbc.com:

http://www.cnbc.com/2015/12/02/2016-home-sales-to-be-best-since-2006-realtorcom.html

Importantly, those new homes are becoming more affordable, realtor.com Chief Economist Jonathan Smoke said Wednesday.

“What you’ve seen in the last couple of years is that builders have been avoiding that more affordable entry-level price point,” he told CNBC’s “Squawk Box.”

“We’re already seeing movement. Last week’s report on new home sales showed that the median new home price is finally coming down, and that’s a good sign that builders are positioning communities and product for a more affordable price.”

That is helping to draw in millennials, who are often viewed as absent from the housing market.

Americans ages 24 to 35 accounted for 30 percent of the existing home sales market in 2015, according to National Association of Realtors data cited by Smoke.

“That’s higher than it has been the last couple of years and trending towards normal, which is more around 36, 37 percent,” he said.

Smoke noted that realtor.com’s top 10 hottest housing markets for 2016 contained other surprises, in addition to top-ranked Providence: St. Louis; New Orleans and Virginia Beach, Virginia.

While all the areas on the list have strong economies or improving prospects, those four areas are about four years behind other markets in the recovery, and their economic outlook for 2016 is particularly strong, Smoke said.

Realtor.com hottest markets for 2016:

1. Providence, R.I., and Warwick, Mass.
2. St. Louis
3. San Diego-Carlsbad
4. Sacramento-Roseville-Arden-Arcade, Calif.
5. Atlanta-Sandy Springs-Roswell
6. New Orleans-Metairie
7. Memphis, Tenn.
8. Charlotte-Concord-Gastonia, N.C.
9. Virginia Beach-Norfolk-Newport News, Va.
10. Boston-Cambridge-Newton

Posted by on Dec 3, 2015 in Jim's Take on the Market, Market Buzz, Market Conditions | 2 comments

‘New Normal’

china

Hat tip to CB Mark for sending this in from the nytimes.com – an excerpt:

This year, Chinese families represented for the first time the largest group of overseas home buyers in the United States. Big spenders on new homes are helping prop up local economies in the Midwest. But in dense areas like San Francisco and Manhattan, they are also affecting the affordability and availability of housing, as demand outpaces supply and bidding wars ensue.

While Chinese purchases make up a small sliver of overall sales in the United States, they have had a disproportionate impact on the market for more expensive properties, buying one in 14 homes sold for more than $1 million.

On average, buyers from China, including the mainland, Taiwan and Hong Kong, pay $831,800 for a home, more than three times as much as Americans spend, according to a National Association of Realtors survey.

nar chart

exodus

Read full article here:

http://www.nytimes.com/2015/11/29/business/international/chinese-cash-floods-us-real-estate-market.html

Posted by on Nov 28, 2015 in Jim's Take on the Market, Market Buzz, Market Conditions, The Future | 0 comments