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Category Archive: ‘Market Conditions’

Mortgage Rates Dropping

rates sept 27

Are you still thinking about packing it in for 2016?

Mortgage Rates maintained their recent winning streak today, falling for the 5th straight day.  The average lender is now offering the best rates in nearly 2 months.  You’d have to go back early August or late July (depending on the lender) to see a better combination of rate and upfront cost.

Read more here:

Posted by on Sep 27, 2016 in Interest Rates/Loan Limits, Jim's Take on the Market, Market Conditions | 0 comments

Soft Market? How Soft?

Our local market has been feeling ‘soft’ lately, and I mentioned earlier that it might be good for a 5% to 10% discount off list price….or off the last comps?

It is more a seasonal thing really.  The sellers keep pushing the list prices higher all year, and buyers get exhausted by the end of summer.

You can see below how the gap between the average list prices and sales prices widen towards the off season – the Septembers are marked in red:

Discount percentage graph

The motivated sellers will adjust as needed, and we’ll all be fine.

It looks like they already are, generally speaking:


The reason you don’t see many sales close at big discounts is because you have to offer 15% below list to have a shot at buying at 10% below. The vast majority of sellers will laugh you out of the house with offers at 15% off. It’s too easy for them to think it will be better in springtime, and wait.

It’s why you see 5% to 7% discounts off list in the first graph – that is all the sellers will tolerate because they’re convinced that their list price is ‘right’.

While it might feel ‘soft’ because houses aren’t selling like they used to, don’t worry. Sellers who need to sell will re-calibrate over the next 30 days, and set the tone for next spring.

The big question is – “will buyers pay more in spring?’ If yes, it will be only for the vastly superior homes. Anything that is inferior in any way – especially the fixers – will need to be sharp on price to sell.  It’s doubtful that they will get any more than they could have gotten this year, and it may take last year’s prices to move some of them.


Posted by on Sep 24, 2016 in Jim's Take on the Market, Market Conditions, North County Coastal | 1 comment

Negotiable Now


Here are examples of real estate deals in the Bay Area, where buyers are happy just to get a break on the price.

Here are excerpts:

In the Bay Area housing market, it appears to be a game of cat and mouse.

Sales of single-family homes in August crept up ever so slightly from the year before as many buyers took a wait-and-see attitude, challenging sellers to negotiate — something unheard of in the overheated market of 2015.

Could a price break be coming to the region after years of steady appreciation? Perhaps.

“Outside hotly contested areas, we’re seeing price adjustments of a kind we haven’t seen in some time,” said Timothy Ambrose, treasurer of the Bay East Association of Realtors. “Buyers start thinking, ‘Well, should I wait?’”

But hang on, he and other experts warned. The regional market is a complicated one, with techies still driving up home prices in micromarkets from Palo Alto to Oakland’s Rockridge neighborhood. And this wouldn’t be the first time the overall market has slowed in late summer, as children go back to school and families call off their house hunts.

The Silicon Valley market is unpredictable, said Pacific Union agent Wendy Kandasamy, based in Palo Alto: “The market is so dynamic. It’s hard to say with certainty when a property will sell.”

She called August — typically the doldrums for home sales — an anomaly, ticking off details of five sales for $5 million and up. One five-bedroom house in Palo Alto sold for $7,795,000 — almost $1,900 per square foot, a figure Kandasamy called “extraordinary.”

Yet in lower price brackets, she said, buyers have backed off and sellers find themselves negotiating.

Her client Clifford Chao can attest to that. A Google engineer, he and his wife, Jackie Ling-Chao, who also works in tech, spent months house hunting. With one young child and another on the way, they wanted something larger than their downtown Mountain View condominium.

Initially they set their budget between $1.8 and $1.9 million, but that wasn’t getting them the house they wanted in a top school district. So they decided to stretch the budget. “It’d be painful, but we could,” Chao said.

And then the unexpected occurred: He noticed that “certain houses that should be getting 10 offers suddenly couldn’t sell. It was only happening in this one price range of between $2.1 and $2.4 million. Everything seemed to tumble, sometimes by about 10 percent.”

The couple watched, waited and successfully bid on an Eichler-style home in Palo Alto: four bedrooms with a spacious backyard on a 7,000-square-foot lot. It listed for $2.3 million. After a previous buyer backed out of a deal, Chao and his wife grabbed it for $2.17 million.

“I think we did get a little bit lucky,” he said. “It’s what we wanted — perfect.”

Alain Pinel agent Mark Wong also finds the market to be mixed. On the one hand, he identified six homes that sold last month in Cupertino for between $200,000 and $417,000 over the asking price, the latter example attracting 23 offers. Yet such bidding battles are no longer the rule, and with the market’s long-range prospects unknowable, he has advised some clients to get off the fence.

His clients Shue Pun, a marriage and family therapist, and her husband, Heman, a graphic artist, decided to sell their Cupertino townhouse, where they lived for 13 years and raised their son, who now works in Southern California. The townhouse is in an excellent school district, but sits on a busy street — part commercial, part residential — and Wong told them it likely wouldn’t sell for the $1.2 million or so that they had anticipated.

Listing it for just under $1.1 million, they held an open house that attracted 110 visitors — but no offers. “A real disappointment,” Shue said.

But a few weeks later, a couple with two young children — “a perfect fit” — bid $1.05 million. The Puns, who purchased the townhouse 13 years ago for $520,000, accepted the offer and now plan to buy a house in San Jose, close to their church.

Like the Bay Area weather, the region’s real estate market varies from town to town and neighborhood to neighborhood, said William Doerlich, president-elect of the Bay East Association of Realtors. He estimated that upward of 50 percent of his clients work in tech.

“They’re tired of the $4,500 apartment in Potrero Hill” in San Francisco, Doerlich said, so they move to the East Bay, preferably close to BART and in a “walkable” district, and they “gobble up” houses, whether in Oakland or Dublin.

Or in Fremont, where his client Erin Suth — unwilling to go along with $1,300 in monthly rent for her 480-square-foot apartment in Castro Valley — found an old cottage house on a spacious lot. Built in 1924, it was completely renovated: new plumbing, new granite counters in the kitchen, a flagstone front porch. It listed for $430,000.

Suth, who is 26 and a regional manager for a recruiting company — not even a techie — bid $450,000 and now owns her first house. “It’s darling,” she said.

Posted by on Sep 21, 2016 in Jim's Take on the Market, Market Conditions | 4 comments

DOM Matters


Our local market has been healthy/strong since 2009, with virtually every property in North San Diego’s Coastal region having risen 30% to 50% in value.

But the slowdown is here, which probably means prices are going to flatten out.

Sellers and agents who priced too high over the last few years just had to wait “until some nice family came along”.  But the reality was prices were rising fast enough that they eventually caught up.

But what happens in flatsville?  Prices take much longer to catch up – if they ever do.  With mortgage rates at record low levels – can market conditions be any better than what we’ve seen lately?  Probably not.

The days-on-market is going to matter now.

Buyers have been willing to ignore the longer DOMs because they knew prices were rising fast – and they were frustrated.  But in a slower market, buyers gain confidence and don’t mind waiting to see how it all shakes out.

Bottom line?

You want to sell in the first 30 days on the market.

The pricing history of each house, and the amount of time it’s been on the market is public knowledge.  Once you roll into flatsville, the homes languishing on the market for months will get ignored.  Buyers are more skeptical, and the longer a house is on the market, the less they want to pay!

Other things will matter too. Curb appeal and interior improvements, ease of showing, reputable listing agent, and attractive price will all be scrutinized closely by prospective purchasers who are looking for any reason NOT to buy.  Staying on the fence will become the new sport.

Is it a big deal?  Not to those who don’t need to sell. Buyers will still come around, and you might get lucky.

But rising prices have been provided the ‘luck’ because they caused buyers to ignore market signals – they just wanted to buy something before it got worse.

The shift in the market is subtle, and many won’t notice.

But the educated buyers are paying attention, and now hesitating over the little stuff.  The number of days on the market will be their primary data point, so do everything possible to ensure a prompt sale!

Get Good Help!

Posted by on Sep 16, 2016 in Jim's Take on the Market, Market Conditions, Why You Should List With Jim | 1 comment

Inventory Watch

We are hearing the same hesitations from buyers that we heard last year, and it’s probably a seasonal thing – people wonder if there will be turbulence during the real estate off-season.

NSDCC Active Listings
Avg. LP/sf
Avg SF
Sept. 14, 2015
Sept. 12, 2016
NSDCC Active Listings
Avg. LP/sf
Avg SF
Sept. 14, 2015
Sept. 12, 2016
$1.4M – $2.4M
NSDCC Active Listings
Avg. LP/sf
Avg SF
Sept. 14, 2015
Sept. 12, 2016
Over $2.4M
NSDCC Active Listings
Avg. LP/sf
Avg SF
Sept. 14, 2015
Sept. 12, 2016

Sandicor stops publishing the full data set once the count goes over 400.

The data looks similar enough to last year, that we should expect a similar result – no market tanking in the off-season, just an occasional seller who lets one go cheap.

If prices did roll back 5% to 10%, would anyone notice? They’d still be record territory, and unattainable for most.

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

Read More

Posted by on Sep 12, 2016 in Inventory, Jim's Take on the Market, Market Conditions, North County Coastal | 0 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.


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!


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.


Housing is sizzling in the last few weeks before the end of summer. According to®, 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®, which is 8 percent higher than a year ago.®’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® 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®’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.

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

More Boomer


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.

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.



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

Moving Inland


As money and affluence continue to invade the coasts, those not so fortunate will be making choices.  Warning to all who are thinking about leaving California – it is virtually impossible to move back.  But you can always visit!

As businesses look for cheaper places to expand, job growth in the middle of the country will begin attracting more residents, according to experts surveyed in the latest Zillow® Home Price Expectations (ZHPE) Survey.

That would reverse a trend over the last decade that drew many to the coasts following strong job markets, with more employment and income growth. Over half of experts surveyed said they don’t expect migration to the coasts to continue indefinitely. Of those, 56 percent pointed to jobs and 24 percent said high housing costs on the coasts will drive residents inland.

Recovery from the housing boom and bust has looked very different for Middle America and coastal America. While markets on the East and West coasts experience rapidly rising home values and strong job markets, markets in the Rust Belt and Midwest are moving more slowly; negative equity is still prevalent and job growth is minimal.

The quarterly ZHPE survey, sponsored by Zillow and conducted by Pulsenomics LLC, asked more than 100 housing experts about their expectations for the housing market.

The experts were also asked if they thought the distinct split between Middle America and the two coasts would reverse. Over half of the respondents said this trend has already begun to reverse, or expect it to in the future. A quarter of respondents believe this trend is a permanent shift, and 11 percent believe the migration to the coasts is an illusion.

Of the reasons experts predicted people would move back to the middle of the country, job growth was most popular. Just over 20 percent said people would migrate inland in search of more affordable housing, and 13 percent said Americans will start to seek the traditional lifestyle that the middle of the country has to offer. Only 2 percent said climate change will force residents away from the coasts.

“Since the Recession, employment has boomed in relatively expensive coastal areas, often attributed to a shift in preferences among workers – especially millennials – but also facilitated by soft labor markets that have resulted in a plentiful supply of available workers,” said Zillow Chief Economist Dr. Svenja Gudell. “Now, as labor markets tighten and the country approaches full employment, employers will have to look elsewhere to keep costs in check. For some businesses, this will mean relocating away from expensive coastal areas to more affordable interior communities. Sooner or later workers will follow the jobs, providing an impulse to local housing markets.”

Overall, the experts surveyed predict home price appreciation across the country will be up over 4 percent year-over-year by the end of 2016. They expect home prices to slow down over the next four years and by the end of 2020, they predict home prices will grow at an annual pace of just 2.9 percent.

Posted by on Aug 27, 2016 in Forecasts, Jim's Take on the Market, Market Conditions | 2 comments