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Category Archive: ‘Market Conditions’

More on the Haves

rolls

More on the ultra-rich and deals being made around L.A. – thanks daytrip:

http://www.latimes.com/local/california/la-me-lopez-otherhalf-20150322-column.html#page=1

It’s not uncommon on the Westside of Los Angeles for people to shell out $20 million or more for a house.

And then take a wrecking ball to it.

Jeff Hyland, of the high-end Beverly Hills real estate agency Hilton & Hyland, had a recent tear-down sale of $35 million in the Trousdale section.

“It was in absolutely magnificent condition,” noted Hyland, who would not reveal the owner’s name but said his client was happy to pay all that money “just for the dirt,” with plans to erect a dream house.

Tearing down a $35-million house in a region where the middle class is disappearing, affordable housing is scarce and multiple families are crammed into homes or apartments — not to mention the tens of thousands living on the streets — is the kind of thing that makes you think the world is about to end.

But that’s the way things are in the Westside hills, where there’s no shortage of buyers from around the world snapping up estates. Longtime residents, suffering in cramped 10,000-square-foot quarters, are squawking about new and rebuilt estates the size of aircraft carriers.

One house just sold for north of $80 million, right around the time the Economic Policy Institute published a study concluding that “more than half” the residents of metro Los Angeles “are struggling to achieve economic security.”

The year 2014 was the biggest on record for his agency, said Hyland, with $2.9 billion in sales across Beverly Hills and Bel-Air, through Brentwood and out to Malibu. But that mark could be topped in 2015, with Hilton & Hyland’s 100 agents chasing a target of between $3 billion and $3.2 billion.

“We’ve sold, I think, 10 houses this year for over $20 million,” Hyland told me while we toured some of the most expensive homes on the U.S. market in his Rolls-Royce Ghost.

“The Chevrolet of Beverly Hills,” Hyland said of his car, which rides like a dream. The base price for a new Ghost is about $300,000, or roughly the median price of a new house in the United States.

See the great video in this full article:

http://www.latimes.com/local/california/la-me-lopez-otherhalf-20150322-column.html#page=1

Posted by on Mar 21, 2015 in Jim's Take on the Market, Market Conditions | 6 comments

Home Buyers from Tech Industry

tech

One segment fueling the market – thanks daytrip!

http://www.latimes.com/business/la-fi-0321-tech-real-estate-20150321-story.html

Although he primarily lives in San Francisco, entrepreneur and investor Justin Yoshimura focused on Southern California when it came time to buy property, with the aim of making it his home away from home.

In December, he paid $2.04 million for a three-bedroom, three-bathroom home in Santa Monica for $250,000 below listing. Every few days, the 25-year-old flies north for the workweek, returning to Santa Monica on weekends.

“Compared to San Francisco in particular, it’s very cheap,” said Yoshimura, who founded and later sold a loyalty platform for retailers called 500friends. “Santa Monica is one of the most desirable neighborhoods in L.A. and I have a yard with a pool and a beautiful home for less than what I would pay for an equivalent-sized condo in San Francisco.”

Tami Pardee, a real estate agent specializing in West L.A., is representing several tech buyers from up north. She estimated that 10% of current clients live in Silicon Valley, including engineers from Facebook and several venture capitalists. The budgets are high: anywhere from $2 million to $5 million for a home.

“They’re buying second homes — or third or fourth homes,” she said. “We’re seeing it a lot.”

In general, Pardee said, the potential buyers are more savvy than usual, having done extensive research online before traveling down to view properties. They have specific requirements: A lot of people don’t want to be north of Montana Avenue in Santa Monica, preferring to live further south, closer to the hub of tech activity. Many say they’d like a walkable neighborhood and a home with a “refined, finished” design.

“They don’t want a modern box,” she said.

http://www.latimes.com/business/la-fi-0321-tech-real-estate-20150321-story.html

Posted by on Mar 21, 2015 in Jim's Take on the Market, Market Buzz, Market Conditions | 7 comments

Kids and Real Estate

kids

Are your kids involved with your real estate decisions? Many love it!

(Hat tip to daytrip)

http://www.nytimes.com/2015/03/22/realestate/when-new-york-kids-help-find-the-family-home.html?_r=0

A year and a half ago, Skye van Merkensteijn was shooting hoops with a friend who lives at the Aldyn, a condominium-rental hybrid on Riverside Boulevard with its own indoor basketball court, climbing wall and bowling alley.

Thirteen-year-old Skye was impressed — and envious. Well, his worldly pal told him, he just happened to know of an apartment for sale on the 21st floor.

Skye went home, jumped online and called up a video of the property in question — a 12-room spread with a hot tub and private 37-by-15-foot outdoor pool.

“When my husband, John, came home,” said Skye’s mother, Elizabeth van Merkensteijn, “Skye announced: ‘We’re moving and this is the place we’re moving to.’ ”

Read full article here:

http://www.nytimes.com/2015/03/22/realestate/when-new-york-kids-help-find-the-family-home.html?_r=0

Posted by on Mar 20, 2015 in Jim's Take on the Market, Market Conditions | 6 comments

Spring Fever

oc

The real estate market around Orange County is similar to ours in San Diego, and they are feeling the seasonal surge like we are currently.  Mortgage rates under 4% are certainly contributing to the fever – live it up while you can!

http://www.ocregister.com/articles/market-652959-year-thomas.html

An excerpt:

January buying was slow, too. Then all of a sudden – with no major change in pricing or mortgage rates or the broader economy – shoppers stopped shopping and started making offers.

“I’d like to know what buyers are thinking. Why did they start pulling the trigger now?” Thomas says. “It’s like we’ve gone from 5 miles per hour to 65 in a very short distance.”

Thus, the big question for Orange County’s housing market has gone from “When will it wake up?” to “How long can this surge last?”

Will February prove to be just a short-lived, unexpected rush of buyers wanting to start the year in a new home? Did folks get overly anxious about the possibility of potentially higher home prices or costlier mortgages later this year?

Or is this the market breakout where improved housing fundamentals, most notably a healthy job market, nudged buyers to act? Is there a growing flock that’s tired of renting or having roommates – parents or otherwise – and have joined the traditional hunt for home ownership?

Posted by on Mar 4, 2015 in Jim's Take on the Market, Market Conditions, Spring Kick | 8 comments

Bubble or No Bubble?

thorn

This article is talking about Oakland, California, but these conditions exist up and down the coast.  Thornberg has been one of the more level-headed bubble analysts:

http://ww2.kqed.org/news/2015/02/18/is-the-bay-area-in-a-bubble-and-will-it-burst

An excerpt:

“This is not a bubble,” says Chris Thornberg, an economist in Los Angeles.

Though he’s just one guy, we called him because he has the dubious distinction of having predicted the 2008 market crash. His colleagues used to call him “Dr. Doom.”

He says that the money flooding the Bay Area isn’t built on speculation like the last boom.

“These are people with real money, with real incomes,” he says. “They have enough money to live in whatever cities and neighborhoods they want, so if there’s not enough high-end housing, they’ll just gentrify lower-income neighborhoods.”

And while the growth may slow, it won’t stop, Thornberg predicts. He believes the solution is a matter of adding to the housing supply. As more units come on the market, prices become more reasonable for everybody, he says.

But others argue that without policies making sure some of the housing is affordable, it’s not going to make any difference for middle-class and poor people.

“That’s completely wrong,” Thornberg says. “The evidence tends to suggest that for the most part, when you start layering rule after rule after rule on real estate developers, ultimately you end up simply hurting the supply worse.”

So what should Eaton do?

Thornberg’s answer? Buy now. Anything you can get.

Posted by on Feb 19, 2015 in Bubble-Era Pricing, Forecasts, How Hot?, Market Buzz, Market Conditions | 11 comments

Not So Hot

It’s happening everywhere you go, and it’s in every conversation with agents – the market is buzzing with “lots of activity”.

What does that mean?  Does it mean anything?

Here’s what it means:

  • Buyers are giddy about getting a 3.75% jumbo rate.
  • Agents are giddy about driving around.
  • Sellers are giddy about selling for more than the last guy.

Sellers and agents who have lots of showings think their house is red hot, and they demand a premium – or at least they aren’t coming off their price much.

But they should be more realistic about those who aren’t offering.

If you have 10-30 showings and only 1-3 offers, it means the vast majority of buyers thought your home was over-priced.

Just because there are a lot of lookers doesn’t mean the eventual buyer will pay your price either.

Here are stats on the NSDCC closings so far this year:

Houses Closed Under $1,000,000

SP:LP = 96.3%

Average days on market: 51

Houses Closed Over $1,000,000

SP:LP = 92.5%

Average days on market: 86

Buyers want to pay a reasonable price, and those averages show that they are being patient.  Of the 192 closed sales so far in 2015, only NINE PAID OVER LIST!

All participants need to be smart about how the market works now.  You get a flood of interest in the first two weeks, and then the activity drops off to nearly zero – and those occasional showings are being used to sell the house down the street.  Be smart, read the market signals, and keep egos in check.

And Get Good Help!

SD prices15

 

Posted by on Feb 10, 2015 in Jim's Take on the Market, Market Buzz, Market Conditions, North County Coastal | 0 comments

Market Experiences

One week into the selling season….how’s it going?  With our spectacular weather and both Tiger and Phil out of the golf tournament, the streets were flooded with home lookers this weekend.

A few experiences so far:

1.  An agent selling his own house gets seven offers within the first three days on the market.  He counters all with a set price that is $8,000 below his list price, and gives the full three days to respond.  Less than 24 hours later, he emails the losers that he has accepted an offer.  No curiosity what the others might bring?

2.  A listing agent – who has no sales on the MLS – lists a house for 5% over the last model-match sale.  She hopes that buyers will ignore that the comparable sale was fully upgraded and had no road noise when hers doesn’t.

We offer just under the comp’s sold price, but she won’t counter – you see, she’s had ‘lots of activity’.

3.  Another agent on her first sale says she will respond to our offer last night after the weekend open house. At 9:32pm last night, she responds to my inquiry by saying that she too had lots of activity, and multiple offers – and ‘we will not be accepting your offer’.

Don’t you at least counter everyone to see what they might have left in the tank?  Our offer was 5.9% under list, and at comp value.

4.  Remember a week ago when we sent in our best offer and the listing agent countered it $5,000 higher?  The agent, who sells a solid two homes per year, called back yesterday, wondering if I might kick in the $5,000, or if we could split it.

It’s too late now – your bone-headed grab for less-than-1%-more-on-price repulsed the buyers, and they forgot all about you by now.  She also divulged that the multiple-offer bidding war consisted of an offer contingent on selling another property, and an offer lower than ours.  Meanwhile, this week her sellers will be entering Month Six of sitting on their vacant house, and approximately $2,500 per month payment.

5.  With no serious nibbles on my Del Mar Heights listing – and not many desirable replacements to consider – my seller withdrew the listing this week after 35 days.  Another example of why the inventory is low – the best alternative for many is to stay put, rather than pay outrageous rents, take out a new 30-year loan, or leave town.

Get Good Help!

Posted by on Feb 9, 2015 in Bidding Wars, Jim's Take on the Market, Market Conditions | 4 comments

San Diego Housing Indicators

San Diego Payrolls

Read the full article on San Diego housing here:

http://journal.firsttuesday.us/san-diego-housing-indicators-2/29246/

An excerpt:

Before end users can provide sufficient support for the housing recovery, they will need to acquire income; and that means jobs and wage increases. San Diego continues to outpace the state’s jobs recovery, which is good news for San Diego’s housing industry.

The number of individuals employed in San Diego County in 2014 saw a rapid increase of 3.3% (44,500) from one year earlier. Unlike much of the state, San Diego has far surpassed the level of jobs held prior to the 2008 recession. However, with the working-aged population increase of roughly 250,000 individuals in San Diego County since 2007, the real jobs recovery which will bring on mass wage increases isn’t expected until around 2019.

http://journal.firsttuesday.us/san-diego-housing-indicators-2/29246/

Posted by on Feb 6, 2015 in Local Flavor, Market Conditions | 2 comments

Smaller Yards Preferred

yards

A good discussion of the trend towards bigger houses on smaller lots – hat tip to daytrip!

http://www.latimes.com/home/la-hm-0131-outdoor-space-20150131-story.html

Excerpts:

One point generally acknowledged is that many people today do not want the expense and hassle of a big yard. “It’s not practical to have a big lawn these days,” Tighe says. “People are rethinking that, rightfully so.” But they do still want something of a yard, just not the way we think of it.

“That backyard in a sense becomes an important room as part of the house,” says Radziner. “We can live outside if we do it right. Our clients are more interested in the quality of the space rather than the quantity of the space.”

Posted by on Feb 2, 2015 in Market Buzz, Market Conditions | 3 comments