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Category Archive: ‘Market Conditions’

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

Discount Off List Price

At every open house, people want to know, “How much lower?”

It is relative to the usual factors – how long on the market, seller motivation, etc. – but what over-rides everything else is timing.  It is early in the selling season now, and every seller is optimistic.

Even if the house has been on the market for months – or repeatedly ‘refreshed’ over several years – every seller thinks this is a new beginning.

If you look at the recent averages, big discounts are rare – buyers are lucky to get 5% off, especially in the first half of the year.

Here is the history of discounts off list price in North SD Coastal:

SPLPratios

Houses sold under $1,400,000 have barely knocked off 2% to 3% from the list price over the last three years.  Those between $1.4 and $2.4 had a great year in 2015 – above 95%.  But every price range does better in spring.

Posted by on Jan 31, 2016 in Jim's Take on the Market, Listing Agent Practices, Market Conditions, Spring Kick, Why You Should Hire Jim as your Buyer's Agent, Why You Should List With Jim | 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 Is Hot

seattle

Zillow came out with their Hottest Housing Markets of 2016, and San Diego didn’t make the list:

http://www.zillow.com/blog/hottest-markets-2016-190331/

They based their ‘hotness’ on a combination of employment, recent income growth, and the expected increase in the Zillow Home Value Index.

They expect that the San Diego HVI will rise 2.7% this year, and I think our employment and income numbers should at least be steady:

sdzhvi

Zillow isn’t considering retirees into their algorithms – especially the rich folks who want great weather to live out their life.  Any of them who have grandkids in the Southwest will give us a look, and when they compare to Los Angeles or the Bay Area, they will like our prices much better.

The towns in the Zillow Top Ten have expected HVI increases of 4% to 5%.

At the end of 2016, let’s see how San Diego compared to their list of ten.  I say that we beat at least half of them – in spite of fewer sales than we had in 2015.

Posted by on Jan 13, 2016 in Forecasts, Jim's Take on the Market, Local Flavor, Market Conditions, Sales and Price Check | 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

Growing Inventory in 2016?

The year 2015 wraps up tomorrow!

We saw last week that the annual count of NSDCC detached-home sales already exceeds the 2014 total.  By the time the sales from this week are recorded (and the late-reporters chime in) the 2015 sales will be about 5% higher than last year’s count – in spite of higher pricing!

Higher prices = more sales??

More sales = higher prices??

The additional action was made possible by more homes coming to market.

New-Listings Count – Annual, 2nd Half, and 4th Qtr:

Year
Annual # of Listings
# of Listings, 2H
# of Listings, 4Q
2011
5,223
2,117
915
2012
4,416
1,871
761
2013
4,817
2,027
726
2014
4,691
1,979
761
2015
4,878
2,114
817
Incr over 2014
+4.0%
+6.8%
+7.4%

All signs are pointing to the inventory increasing next year – will a larger selection of homes for sale inspire more buyers to buy?

If so, it means more sales – and a faster rate of appreciation if each sale is slightly higher than the last.

Or will a surge of over-priced listings cause the market to stagnate?  If there are more OPTs stacking up, it makes it more obvious to buyers that the prices are wrong.

I think 2016 will be the most interesting yet – especially if we get mortgage rates bumping up faster than expected!

Posted by on Dec 30, 2015 in Inventory, Jim's Take on the Market, Market Conditions, North County Coastal | 0 comments