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Category Archive: ‘Market Buzz’

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

‘Soft’ Market

I showed 20-25 properties to buyers over the weekend, which always makes me cringe because I know what will follow – those incessant ‘feedback’ requests.  In a hot market, they come by email – listing agents don’t care what you think then, because they know the property will be selling any minute.

But these days you get phone calls.

The calls usually come from assistants, and, for the most part, they don’t care what the feedback is, they just need to write something down.

But occasionally the actual agent will call, which hopefully means somebody has some real motivation over there.  I like to turn these into two-way conversations and ask questions to see if the agent might be realistic.

Agents love to gush about how many showings they’ve had, and as a result, how a sale must be right around the corner.  You and I know that a lot of showings but no offers means a lot of buyers not interested – at least not at this price.

But most agents are slow to accept that reality, so I’ll follow it up by suggesting that the market must have turned soft and see what they say.  You can’t assume that it’s obvious to everyone, even those in the business.  Besides, after the run we’ve had, most realtors think the market is soft if they don’t get multiple offers in the first week!

But what is a ‘soft’ market?

From Investopedia:

DEFINITION of ‘Soft Market‘ – A market that has more potential sellers than buyers. A soft market can describe an entire industry, such as the retail market, or a specific asset, such as lumber.

This is often referred to as a buyer’s market, as the purchasers hold much of the power in negotiations.

The market will feel ‘soft’ to sellers and agents who are getting showings but no offers.  They will blame the ‘market’, as if the problem is outside of them.

But we know what the real problem is – sellers got a little too enthusiastic about their list price, and buyers are now balking.  For example, see below.

sept

Most agents are reporting no offers on their listings, and you can see why.  There isn’t enough pricing momentum to propel buyers to keep paying more.

How soft is it?

Probably 5% to 10% – but do you deduct from today’s lofty list prices, or from the last comps?  Results may vary!

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Posted by on Sep 8, 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

San Diego #6 Hottest in U.S.A.

sd

Housing is sizzling in the last few weeks before the end of summer. According to Realtor.com®, it’s the “hottest August in a decade” for real estate.

Homes are selling 2 percent more quickly than a year ago and prices are reaching new highs. The median home was listed for $250,000 on realtor.com®, which is 8 percent higher than a year ago.

Realtor.com®’s research team did its annual check up on housing markets across the country to identify which metros are seeing homes sell the fastest and garnering the most listing views (based on realtor.com® traffic).

New cities added to its list this month included Kennewick, Wash., and Waco, Texas. Detroit also notably moved up in the rankings this month, up four spots to land in the top 10.

Here are the 20 real estate markets that topped realtor.com®’s list in August:

  1. Vallejo, Calif.
  2. Dallas
  3. Denver
  4. San Francisco
  5. Stockton, Calif.
  6. San Diego
  7. Columbus, Ohio
  8. Waco, Texas
  9. Detroit
  10. Sacramento, Calif.
  11. Fort Wayne, Ind.
  12. Yuba City, Calif.
  13. Modesto, Calif.
  14. San Jose, Calif.
  15. Fresno, Calif.
  16. Colorado Springs, Colo.
  17. Santa Cruz, Calif.
  18. Kennewick, Wash.
  19. Santa Rosa, Calif.
  20. Nashville, Tenn.

http://realtormag.realtor.org/daily-news/2016/08/25/month-s-20-hottest-housing-markets

Posted by on Sep 1, 2016 in Jim's Take on the Market, Market Buzz, Market Conditions | 2 comments

More Boomer

babyboomers

The author calls for a better look at how baby boomers impact the housing market, which is great.  Talk to realtors who work the street – we are the ones who have the direct one-on-one contact with buyers and sellers.

http://www.builderonline.com/money/supporting-the-economies-of-the-future-comes-down-to-data-and-demographics_o

Excerpted here:

Location, location, location. It’s the long accepted golden rule of real estate. Could it be possible that the golden rule of real estate is being rewritten to focus on the golden years?

The National Association of Realtors does a great job studying real estate trends and providing data that could be powerful to local municipalities if interpreted correctly and applied strategically.

In its 2016 Home Buyers and Sellers Generational Trends report, the data showed that sellers ranging in age from 61 to 90 pick the same top three choices as a reason for selling.  This homeowner demographic chose to sell to move closer to family and friends, downsize, or retire.

That’s not new news. Older homeowners have always sold their homes to move closer to family and friends, downsize, or retire. What’s new is that older homeowners may make up the majority of the homeowners in your town. That could mean an oversupply of inventory, which could mean longer market times or falling prices, even if activity is strong and the number of units sold is up.

As it continues to unfold, some communities will feel the pain of falling prices fueled by oversupply of inventory as seniors need to sell in numbers larger than younger buyers are moving in. Some communities will feel the pain of rising prices fueled by low inventory and increased demand if they are a retirement destination and the beneficiary of relocating seniors. Some communities will boom if buyers both young and old penetrate their market, benefitting from the enormity of both the baby boom and the echo boom.

As a nation, we’re accustomed to the real estate market moving in concert, either up or down, in response to a variety of economic factors. The market has never really had simultaneous hot spots and cold spots with no clear economic indicator, and it is confusing because local age distributions are not currently being factored into the statistics, so demographics are not part of the conversation.

Let’s change that. Here is an all-call for housing analysts to look at the data through a different pair of glasses as the boomers move through their aging years, so the public is more educated on this dynamic. Municipal planners need to analyze their age distribution relative to housing inventory so residents understand a local supply or demand issue.

In addition, builders need to identify markets that are drawing more than their fair share of one or both generations to accurately project demand, which may not be the same communities that needed new construction in the past.

http://www.builderonline.com/money/supporting-the-economies-of-the-future-comes-down-to-data-and-demographics_o

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Posted by on Aug 31, 2016 in Boomer Liquidations, Boomers, Jim's Take on the Market, Market Buzz, Market Conditions, One-Story | 0 comments

Zillow: “Is The Party Over?”

zzzz

Zillow is the latest to suggest that the ‘market’ might be slowing.

But looking at their own graph, it looks like the monthly percent change begins to decline every year at the end of summer. The second graph also shows that sales are at a new peak – if it fell off a bit we should still be fine.

But all that matters is what readers glean from the headlines and a quick scan.

Maybe it’s just a seasonal thing. This guy was spewing doomer talk in 2014!

http://www.marketwatch.com/story/this-house-market-is-falling-apart-2014-08-26

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From Zillow:

http://www.zillow.com/research/2016-july-home-sales-forecast-13087/

z july 2016

  • Zillow expects existing home sales to fall 1.9 percent in July from June, to 5.46 million units at a seasonally adjusted annual rate (SAAR), ending a string of four consecutive monthly gains.
  • New home sales should fall 6.65 percent to 553,000 units (SAAR) after a stronger than expected June.
  • Given the recent string of home sales beating forecasts, we view risks to the upside and would not be surprised if results are slightly stronger than we expect.

Thus far, it has been a pretty sweet ‘16 for home sales. But according to our July home sales forecast, the party looks like it could be coming to an end, at least temporarily and especially for sales of existing homes that must eventually face the harsh reality of tight inventory and rising prices.

Despite tight inventory, existing home sales have been surprisingly buoyant lately, beating or meeting expectations in each of the four months from March to June. We expect that streak to end in July. If nothing else, the odds that home sales continue to rise are increasingly dim. Since the series began in February 1999, runs of five months or more of consecutive monthly gains have only occurred five times – and only one of those streaks lasted six consecutive months or more.[1]

Shifting seasonal patterns may be behind some of this apparent resiliency. By some reports, the height of the home shopping season – historically most concentrated during the summer months – shifted earlier this year as buyers sought to get ahead of the competition. But sooner or later, tight supply and rising prices should take their toll.

Our forecast for existing home sales points to a 1.9 percent decline from June to 5.46 million units at a seasonally adjusted annual rate (SAAR) (figure 1). This would place existing home sales down 0.3 percent compared to a year earlier.

Read full report here:

http://www.zillow.com/research/2016-july-home-sales-forecast-13087/

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Posted by on Aug 22, 2016 in Forecasts, Jim's Take on the Market, Market Buzz, Market Conditions, Zillow | 2 comments

SD Middle-Class Housing Crisis

top

The building industry is selling more new homes, but their focus is on the higher-end markets, and not much is happening for the middle class.

KPBS found a guy to whine about it on camera; but it’s a free market, and rich people are winning. It’s not going to change – what can government do?

Hat tip to daytrip for sending this in!

http://www.kpbs.org/news/2016/aug/08/housing-crisis-squeezes-middle-class/

Homeowners in San Diego County may not feel it, but a housing crisis is underway in the region, and the middle class is especially hard squeezed.

Longtime Escondido resident Guy Chandler faced a situation that may be all too familiar to many San Diego families. He described what happened at a recent San Diego County Board of Supervisors’ meeting.

“Probably the worst day of my life was in June 2015,” Chandler said. “My daughter, Jenelle, 37 years old, came to me and told me, ‘Dad, sit down. There’s something you’re not going to like. We have to move out of San Diego County.’”

Chandler’s daughter told him she was planning to take her family and move to another state because she couldn’t find a house in San Diego where she could afford to raise her kids.

“The next two days a lot of hand-wringing and crying went on,” Chandler said.

He now communicates with his grandchildren on the web via FaceTime.

“What’s my point?” he asked the board. “My point is, droves of young families are leaving the state of California because they can’t afford to live here.”

Posted by on Aug 16, 2016 in Boomers, Builders, Jim's Take on the Market, Market Buzz, The Future | 5 comments

Steel PreFab

stan

In the best way possible, Stanford professor Mark Jacobson‘s new house is like a giant Erector Set, snapped together in less than a week on an irregular, pie-shaped lot near the university. It’s a 3,200 square foot modular home, and the frame is made entirely of steel.

Dr. Jacobson, head of Stanford’s Atmosphere and Energy Program, says he didn’t want to build a new house, but nothing on the market right now was quite up to his standards insofar as green building goes. So he called BONE Structure, a Canadian prefab homes company that opened a San Francisco office last year, to see if they could do better.

The house, reportedly costing an estimated $1.5 million, is designed with zero emissions, operating off of solar panels on the roof and storing juice in an enormous lithium battery designed by Tesla Motors. If it works right, it will use no consumer electricity at all, making it a passive house.

The steel frame is made from 89 percent recycled material. BONE’s sales pitch is that, although the parts are all manufactured in Canada (delivery takes five or six weeks), the clip-together design means that you can customize the size and layout of the house, rather than picking from prefabricated rooms.

Read full article here:

http://sf.curbed.com/2016/6/17/11966070/prefab-house-stanford-bone-palo-alto

Posted by on Aug 15, 2016 in Interesting Houses, Jim's Take on the Market, Market Buzz, Thinking of Building? | 0 comments

“The Market Is Not What It Was”

not

All that matters is what home buyers take away from stories like this.  The gist here is the same as what we’ve been seeing – the unique, well-located properties are holding up, but in areas where there are several regular homes for sale, the first one out wins.

http://www.marketwatch.com/story/top-end-real-estate-is-at-a-tipping-point-from-sellers-market-to-buyers-market-2016-07-30

It’s essential for real estate agents to understand the current marketplace so they can get the best deal for their clients. And after years of watching the market favor sellers, many agents say they’ve seen a recent shift that has affected luxury property sales across the globe: We’ve entered a buyer’s market.

Jed Garfield, president of Leslie J. Garfield & Co., a New York–based brokerage that focuses on town houses, said he saw signs of this trend in late 2015, when properties that were listed at a fair market price didn’t sell. But recently, the impact has been dramatic. For example, a town house on East 70th Street between Park and Lexington avenues that was bought for $31 million in 2013, re-listed for $32.5 million a year and a half ago—and then dropped down to $22 million three months ago.

“The market is not what it was,” Garfield said. There’s an expectation that real estate prices will rise 3% to 5% each year, he added, but buyers won’t stand for that anymore. “You’d be very hard-pressed to find anybody who would pay more than 2015 prices today,” he added.

In Brooklyn, Compass agent Jay Heiselmann said he’s seen this shift play out as buyers looking for a $3 million-to-$5 million multifamily home have become pickier and more interested in negotiating than in years past. “People used to go and see everything that was on the market,” he said, but that’s no longer the case.

Dolly Lenz, of Manhattan-based Dolly Lenz Real Estate, said she has seen this shift affect the way agents are treated. As recently as a year ago, new agents who tried to get clients an appointment to see a top-tier new development in Midtown would be turned away, Lenz said. But now, not only is everyone getting appointments, they’re also being enticed to bring clients in with promises of extra commissions, “Hamilton” tickets, trips or cars if they make the sale.

“That is a sure sign of a very big shift to a buyer’s market,” she said.

In these cases, interested buyers should negotiate hard, according to Lenz. And that advice holds not just for luxury real estate in the New York market but also for those also in other U.S. cities like Miami and San Francisco, where there’s an excess of high-end, new and often similar inventory.

When it comes to the global market, Dubai has definitely converted to a buyer’s market, despite having “gorgeous architecture and beautiful properties,” because developers built too much too quickly, according to Lenz.

In the U.K. and Europe, the situation also largely benefits buyers, though the landscape is a bit more complicated. While buyers—specifically dollar-based buyers—automatically get a post-Brexit currency advantage in prime London, many still expect an additional 8% to 12% discount, said Gary Hersham, principal at London-based Beauchamp Estates. In this case, many sellers are opting to wait rather than make a deal.

“They think the pound is going to strengthen,” Hersham said. “They’re waiting for their values.”

Amid this shift, “there are still pockets everywhere that are holding firm,” Lenz said.

Manhattan’s West Village is an example—a mini-market where inventory is scarce and there aren’t many new developments or conversion projects, according to Lenz. This has kept competition stiff and prices high.

Prime Beverly Hills has also been immune to big price cuts, Lenz added, as have cities like Melbourne and Sydney in Australia, where Chinese purchasers have been known to buy up an entire building in a day.

“It all comes down to this being a supply-and-demand story,” Lenz said. “If you have a prime property in a great location—something that’s irreplaceable or a trophy property—it is still a very strong market.”

Posted by on Jul 31, 2016 in Jim's Take on the Market, Market Buzz, Market Conditions | 2 comments

Buying with Friends

bb

I have bought with friends before, and I’ll never do it again – you have to reach full agreement on everything! 

And don’t do anything quickly! (bottom paragraph)

For some New Yorkers who have been priced out of New York City’s real estate game, pooling resources with friends and siblings has become the quickest path to homeownership. And while sharing a front door can put even the best relationships to the test, some are finding it’s worth the risk.

For Laurie Savage, a writer and restaurant server, and her husband, Garette Henson, a filmmaker, both 36, the arrival of their son, Fox Henson, almost 2, sparked the idea of buying real estate with a friend. That friend was Alix Frey, 37, whom they had met when they were all students at Sarah Lawrence College.

The group recently moved into a three-story two-family townhouse in Bedford-Stuyvesant, Brooklyn. Ms. Frey, the director of the Blum & Poe gallery in Manhattan, occupies the top level while the couple have the lower level, including the basement and the backyard. The parlor level is divided between the Savage/Hensons and Ms. Frey.

For assistance in their search for a place to buy, the three, who had rented apartments in the same brownstone in Fort Greene, Brooklyn, for eight years, turned to Marina T. Schindler, a saleswoman at Compass real estate and one of Ms. Frey’s close friends.

“It’s a really good way for people to work the system,” Ms. Schindler said. “Not everybody has that money for a down payment. They realize if they team up, they get more bang for the buck.”

It’s a complicated process, she added, “because they’ve got to have an agreement between each other, they have to trust each other, but it’s a great way for young families to make a bigger, better investment.”

The friends had originally looked at properties separately, almost immediately concluding that they were priced out of Fort Greene. As they expanded their searches to Crown Heights and Bedford-Stuyvesant, the numbers still seemed shocking. “Alix was looking at a one-bedroom for $750,000. She wanted a two-bedroom for less than that,” Ms. Savage said.

“We realized we can get a better space if we buy together,” she said. “The apartments priced at what we’re each getting our units for were like tiny boxes. It was startling, the difference in the quality of what we could get. So very quickly we said we’re open to it.”

Read full article here:

http://www.nytimes.com/2016/07/31/realestate/when-friends-buy-a-home-together.html?_r=0

Posted by on Jul 29, 2016 in Jim's Take on the Market, Market Buzz, Thinking of Buying? | 3 comments

More Granny Flats!

ggg

We know there are millions of people thinking about downsizing, due to costs, maintenance, and their health. But the real estate market provides few quality turn-key solutions.  It makes sense to encourage homeowners to add a granny flat!  From the latimes.com:

To help ease California’s housing crisis, Gov. Jerry Brown and state lawmakers are turning to people’s backyards.

Multiple bills with the endorsement of Brown are moving through the Legislature to make it easier for homeowners to build small units on their properties, whether in their garages, as additions to existing homes or as new, freestanding structures.

Los Angeles Mayor Eric Garcetti and other supporters hope the relaxed rules will spur backyard home building to combat a housing shortage that, by one estimate, leaves the state annually more than 100,000 new units behind what’s needed to keep pace with soaring home prices.

“These bills enhance homeowners’ ability to provide needed housing,” Garcetti and Los Angeles City Councilman Gil Cedillo wrote in a letter supporting measures from Assemblyman Richard Bloom (D-Santa Monica) and Sen. Bob Wieckowski (D-Fremont).

Together, the Bloom and Wieckowski bills would force cities to permit the backyard homes — also known as “secondary units” or “granny flats” — eliminate cities’ ability to require additional parking spaces for units near transit, and limit fees charged to connect to local water and sewer systems.

Homeowners such as Rochelle D. Ventura could stand to benefit if the bills pass.  The retiree, who once worked in city government, said she spent around $5,000 several years ago in an attempt to build a secondary unit in her Beverly Grove backyard.

But after the design was submitted to the city, Ventura said she was denied: The driveway that led to the backyard wasn’t wide enough, and a portion of it was covered.

“I couldn’t do it, and that is a shame,” said Ventura, 78. “I have a beautiful granddaughter who was going to live there.”

Read full article here:

http://www.latimes.com/politics/la-fi-small-houses-solution-20160725-snap-story.html

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We have seen several pre-built alternatives – here is another that sells for around $70,000 plus shipping and installation:

small
http://www.contemporist.com/2016/07/25/this-small-house-is-filled-with-design-ideas-to-maximize-living/

Posted by on Jul 26, 2016 in Boomer Liquidations, Boomers, Jim's Take on the Market, Market Buzz, The Future | 3 comments