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An Insider's Guide to North San Diego County's Coastal Real Estate
Jim Klinge, broker-associate
858-997-3801
klingerealty@gmail.com
Compass
617 Saxony Place, Suite 101
Encinitas, CA 92024
Klinge Realty
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Are you looking for an experienced agent to help you buy or sell a home? Contact Jim the Realtor!

Jim Klinge
Cell/Text: (858) 997-3801
klingerealty@gmail.com
701 Palomar Airport Road, Suite 300
Carlsbad, CA 92011


Category Archive: ‘Market Conditions’

Price Reductions Already

The percentages are quite a bit higher this year. The title of the graph could be ‘Sellers Who Are Having No Showings’ because most are (overly) optimistic this early in the selling season and hold tight on price until later.  Something must be rattling them – like no showings.

An excerpt from the UT article:

Home price reductions are still common when the market is red hot. It is sometimes a selling tactic — although not usually considered a good one — to price a home higher and then come down so the buyer feels like they are getting a deal. But, the number of reductions recently shows a big change.

For instance, 8.5 percent of homes had price reductions in November 2016. In November 2018, there were 29.4 percent.

Jason Cassity, a real estate agent based downtown, said the industry has a problem shifting when there has been a big change — such as a downturn in sales at the end of last year. He said some agents are operating like there will still be a bidding war.

“If you continue pricing like it is 2016, it is going to sit on the market a long time,” he said. “Or you are going to be one of those 20 percent (in February) that have to price reduce.”

He said a lot of the reductions he has seen were listings marked up too high out of the gate, something a lot of agents could get away with for years. He said sometimes homes are priced overly high just to meet sellers’ expectation of a huge payday, not the actual value.

Cassity said he presents news articles about the real estate market to clients before they decide on what price they are going to market with.

Link to Full Article

Posted by on Mar 15, 2019 in Jim's Take on the Market, Listing Agent Practices, Market Conditions, Realtor, Realtors Talking Shop, Thinking of Buying?, Thinking of Selling? | 1 comment

Money Walks

This website charts migration according to the IRS reports, based on incomes:

https://www.howmoneywalks.com/irs-tax-migration/

Folks from wealthier counties love to come here because the real estate prices look so attractive. We’re getting more affluent!

Twice as much money leaving San Diego is going just over the county line to Temecula, etc. than the other four counties combined.

Not surprising to hear that Las Vegas, Phoenix, Prescott, and Austin are the top out-of-state destinations!

Posted by on Mar 5, 2019 in Downsizing, Jim's Take on the Market, Market Conditions, Where to Move | 3 comments

January Pendings


Yunnie is getting deep into cheerleader territory now by ignoring the 13th straight decline in the index and woeful 10% year-over-year drop in the west:

The Pending Home Sales Index, a forward-looking indicator based on contract signings, increased 4.6 percent to 103.2 in January, up from 98.7 in December.

Year-over-year contract signings, however, declined 2.3 percent, making this the thirteenth straight month of annual decreases.

Lawrence Yun, NAR chief economist, had expected an increase in January home sales. “A change in Federal Reserve policy and the reopening of the government were very beneficial to the market,” he said.

Of the four major regions, three areas experienced a decline compared to one year ago, while the Northeast enjoyed a slight growth spurt.

Yun also said higher rates discouraged many would-be buyers in 2018. “Homebuyers are now returning and taking advantage of lower interest rates, while a boost in inventory is also providing more choices for consumers.”

Additionally, Yun noted year-over-year increases in active listings from data at realtor.com® to illustrate the potential rise in inventory. Denver-Aurora-Lakewood, Colo., Seattle-Tacoma-Bellevue, Wash., San Diego-Carlsbad, Calif., Los Angeles-Long Beach-Anaheim, and Nashville-Davidson-Murfreesboro-Franklin, Tenn., saw the largest increase in active listings in January compared to a year ago.

Yun says positive pending home sales figures in January will likely continue. “Income is rising faster than home prices in many areas and mortgage rates look to remain steady. Furthermore, job creation will help lift home buying.”

https://www.nar.realtor/newsroom/pending-home-sales-jump-4-6-percent-in-january

Posted by on Feb 27, 2019 in Jim's Take on the Market, Market Conditions, Sales and Price Check | 0 comments

Real Estate for the Older Crowd

According to the Realtors Confidence Index national survey, 89% of home sellers were at least 35 years old, and two-thirds were selling their primary residence:

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Of those who bought a home, 72% were at least 35 years old, and 40% came from a home they owned. Mix of those buying up or down? Maybe 50/50?

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The REALTORS® Confidence Index is a key indicator of housing market strength based on a monthly survey sent to over 50,000 real estate practitioners. Practitioners are asked about their expectations for home sales, prices and market conditions.

Link to NAR Survey

Posted by on Feb 13, 2019 in Boomers, Jim's Take on the Market, Market Conditions, Realtor, Realtors Talking Shop | 0 comments

Tuesday Tidbits

Rob Dawg left this comment regarding the seniors who are aging-in-place:

Wait until autonomous vehicles add another ten years.

Self-driving cars have the potential to change everything about real estate:

  1. Seniors be able to stay in their home longer.
  2. Homebuyers could live farther away and get more home for their money.
  3. Kids wouldn’t need parents driving them around.

But one of the big hurdles is whether people will trust computers to drive the cars for them.  You may know that Mercedes-Benz has installed automatic braking systems, and I have one on my car – and hate it.

When I drive up slowly at an intersection, the computer is overly-sensitive, and brakes too early – and it’s not gentle. With no warning, the computer slams the brakes on, giving riders a whiplash, and in one case, causing the driver behind to hit me!  The system has a manual turn-off button, but it’s hard to find and not permanent so it’s a constant battle.  Donna agreed that I’ve altered my driving considerably, but I’m giving up.  I’m going to get a normal car instead.

More hurdles that will cause autonomous vehicles to be delayed:

Link to Five Factors Slowing Down Self-Driving Cars

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Have you seen homes going pending that weren’t selling a few months ago?

You could make a case that the market is somewhat seasonal, and just the increase in the number of buyers would improve the market.  But junk is junk, whether you’ve been looking for days or months.

We already discussed how sellers of newly-listed homes are bursting with optimism now that the selling season is underway.  But those sellers who have been lingering for weeks or months have already tested the market, and should be more realistic.

My theory is that some buyers are cutting deals on the older listings.

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Multiple offers are back.  Three examples from the last 24 hours:

  • One-story house that had been on the market for 30 days (plus Coming Soon)
  • Two-story house that just listed for $1M in SEH, plus
  • A contingent buyer around $2 million getting beat out twice to non-contingent buyers.

It is remarkable that in 2019, realtors still don’t have rules, laws, procedures, or any effective guidance on how to handle a bidding war so the sellers get the best deal while giving every buyer a fair chance to compete.

But we do have a summary form!  We could do this on a napkin:

Good luck!

Posted by on Feb 12, 2019 in Bidding Wars, Jim's Take on the Market, Market Conditions, Market Surge | 4 comments

More on Aging-in-Place

Diana had a piece on seniors aging in place, and put some numbers on it:

  • With more seniors than ever aging in place and choosing not to sell the family home, an estimated 1.6 million fewer properties are now available in a market already experiencing a critical shortage, according to Freddie Mac.
  • That is about the same number of new single-family and multifamily housing units built each year.
  • That stay-put trend is crashing into the rising demand for housing from the huge millennial generation: fewer homes for sale will continue to put upward pressure on already overheated home prices.
  • “There’s a stalemate,” said Jane Fairweather, a longtime real estate agent in Bethesda, Maryland. “We can’t get enough housing for the couples who want to put their kids in good public school systems.”

“We believe the additional demand for homeownership from seniors aging in place will increase the relative price of owning versus renting, making renting more attractive to younger generations,” said Sam Khater, chief economist at Freddie Mac, who estimates that the current market needs about 2.5 million more homes to meet demand.

The reasons more seniors are choosing to stay in the homes where they raised their families are manifold.

“They love their homes, it’s their chief investment, they love their neighborhoods and their communities, and they love the control they get in their own house,” said 64 year-old Louis Tenenbaum, a housing advocate in Kensington, Maryland. “They decide when to get up, when to go to sleep, what to eat, who to have as visitors.”

Tenenbaum is preparing to age in place himself. He is in the midst of building an elevator into his three-level home. He has also widened doorways, made a curbless shower and lowered his kitchen counters, should he ever be in a wheelchair. he notes that 63 percent of the $383 billion spent on remodeling each year is among people over 50 years of age, according to Harvard’s Joint Center for Housing. The trouble is they don’t always add features for aging in place.

“If we can shift the remodeling industry to be doing those types of things when they’re already remodeling, then we really start to change the housing infrastructure and we create this place where people can enjoy living out their years in their home,” Tenenbaum said.

That’s great for homeowners, but not so great for young buyers hoping to move into larger suburban homes.

Bill featured the article on CR, and he had these thoughts:

Even when people move to retirement communities, many will not sell their homes. They will rent them instead – especially in the higher priced areas with significant capital gains – since they have to pay capital gains if they sell (above $250K exclusion for single, $500K for married), but the property steps up in value when they pass away.  So they can leave the property to their kids with no taxes.

This could be fixed with policy changes.  Either eliminate “step up” basis (take away the incentive to hold), or give older homeowners a one time unlimited exclusion (so they can sell while they are alive).

Aging in place is great for the senior, but what frequently happens, is a four bedroom house is occupied by just one person (inefficient).    This is another area where zoning changes could help – let the senior sell her larger family home without tax consequences, and move to a smaller home in the same community (so they can keep their local ties).

Read more at https://www.calculatedriskblog.com/2019/02/as-more-older-americans-age-in-place.html#gxhgrZmQIIkQesgl.99

Wouldn’t it be nice if everyone had a one-time unlimited exclusion from the capital-gains tax!  Would it make you move?  Is it the only thing that’s holding seniors back?  I don’t think so.  The general comfort of staying put has many physical, mental, and emotional benefits to them.  But if the government ever gets realistic about fixing the housing crisis, this would be the place to start.

Posted by on Feb 11, 2019 in Boomer Liquidations, Boomers, Jim's Take on the Market, Market Conditions | 3 comments

Rich’s Latest

Rich’s latest assortment of data and graphs are out:

https://www.piggington.com/december_2019_housing_data_highest_monthsinventory_2011_prices_d

Here’s one graph that demonstrates the timing of the selling season:

For sales to spike in March, it means buyers have been jumping to get into escrow right after the Super Bowl – and in some cases, prior to!

But also look at how sales drop off earlier in summer.

In 2018, sales from May to June were flat, when they usually rise.

Closed sales in July – which are a result of buyer decisions made in May and June – typically decline from June’s sales counts, but then last year they really fell apart for the rest of the year. And this graph is for the whole county, whose median sales price is less than half of what it is between La Jolla and Carlsbad.

If you are selling, do not think you’ll stand a better chance, later.

My guess for 2019?

February through April will be the season.

Posted by on Jan 25, 2019 in Jim's Take on the Market, Market Conditions, Rich Toscano | 0 comments

Jim in Business Insider in 2014

This was published on April, 2, 2014. The SD Case-Shiller is 28% higher today than it was then, and the trading hasn’t thinned out much, at least not yet.  We had 2,850 NSDCC sales in 2014, and 2,801 last year:

Below is a Q&A with Jim Klinge, the head of San Diego-based Klinge Realty and the creator of BubbleInfo.com, a realty blog.

BUSINESS INSIDER: What is the most underreported story in housing? 

JIM KLINGE: The health of the real estate market. We’re back to peak pricing – and higher – around coastal San Diego during the toughest mortgage underwriting in the history of the world.

BI: What is the biggest change you’ve seen since the bust in terms of the typical buyers’ profile?

JK: No change – almost all are owner-occupants.  Surprisingly, having direct access to recent sales via the internet hasn’t made buyers more critical about price.  Over the last 12 months, it’s been the opposite – people are paying prices that are 5% to 10% higher than recent sales.  Because they are so familiar with the values, you’d think they would be more discerning, but the fear of loss supersedes all – they just want to buy a house, and are tired of losing.

BI: What is the biggest mistake buyers are making these days?

JK: Not researching realtors. They think we’re all the same, so they just grab one.

BI: What is the biggest mistake sellers are making these days?

JK: Not researching realtors.  Many just grab the one who mails them the most propaganda.

BI: How much higher can the Sun Belt markets climb?

JK: The prime markets could easily rise another 10% to 20%, price-wise, in the next 2-3 years.  But it will be on very thin trading, which makes you question how legit it is, and whether it will sustain.

Click here and scroll down for text:

https://e.businessinsider.com/public/2537853

Posted by on Jan 21, 2019 in About the author, Jim's Take on the Market, Market Conditions | 0 comments

Due for a Surge?

Does weather affect home sales?

Yes, buyers don’t mind the distraction when the market is uncertain!

But now that the holidays are over, the Chargers are done, more houses are coming to market, and mortgage rates are a half-point lower than they were three months ago, we are (over)due for a surge of activity.

There are two big NFL games on Sunday afternoon, which leaves Saturday wide open – and it has the best weather of the week.

No big games the following weekend, so if the weather holds out, buyers should be fully engaged – and if they aren’t, then that says something too.

It’s hard enough just trying to sell – if you have to schedule around the weather and other conflicts (graduations, for example), it narrows down the chances even more.  But if we can anticipate opportunities, let’s take advantage.

Posted by on Jan 14, 2019 in Interest Rates/Loan Limits, Jim's Take on the Market, Market Conditions, Market Surge | 1 comment