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Category Archive: ‘Market Conditions’

High Rents Keeping Lower-End Hot

rent squeeze

Do you wonder why the lower-end markets are so hot?

I spoke to a potential buyer yesterday who said he wanted to buy because his rent was so high.  He is paying $2,100 per month to rent a 2br apartment in Shadowridge.

He has lived there for less than a year, and the landlord just gave him notice that they are already raising it to $2,400 per month!

Are you kidding? $2,400 per month for a 2br apartment in Vista???

Here are the median monthly house rentals being advertised in the MLS:

Carlsbad: $4,495

Encinitas: $4,500

Carmel Valley: $4,600

Del Mar/SB: $6,400

La Jolla: $8,800

Rancho Santa Fe: $10,250

The landlords will have to endure more turnover, more repairs, and more all-around hassle as they keep pushing rents higher, but they will keep a fire lit under any tenants who can find a way to buy!

These higher rents should keep the lower-end of each market hopping!

Posted by on Apr 28, 2016 in Jim's Take on the Market, Market Conditions | 3 comments

Price Forecasts Move Higher

risingprices

The hustle to move up the housing ladder is something people did when they were younger – and prices cheaper.  Those move-ups have gotten you here, and hey, it’s not so bad – especially if it means that to replace your home, it costs two or three times more than you paid! 

Expect the housing-inventory stalemate to continue, regardless of how high prices get – people have no better place to go, they don’t want to bother moving, and taxes plus expenses are outrageous.

http://www.realestateeconomywatch.com/2016/04/price-realities-are-blowing-away-forecasts/

This was supposed to be a year of “moderating” prices and a “return to normalcy.”  Instead, upward price pressures have not abated, and red-faced economists are scrambling to crank up their forecasts as price trends at the outset of the buying season knock their protections into a cocked hat.

The culprit? Most forecasters predicted three years of rising prices would encourage more owners to sell, and supplies of homes for sale would catch up with demand, which is increasing as a result of the improving economy and continued low interest rates.

Posted by on Apr 25, 2016 in Forecasts, Jim's Take on the Market, Market Conditions, Sales and Price Check | 1 comment

Roam Around

roam

We could use more inventory, for several reasons – to slow price increases, to provide more opportunities for first-timers and newcomers, and to keep realtors busy!

But people don’t want to move, and that’s unlikely to change.  We’re probably in the best climate in America, and enjoy a relatively-perfect lifestyle – why would you give that up?

Most aren’t going anywhere, and that’s fine.

But for those who might consider taking the money and running, where can you go?  As time goes on, the options are getting more creative.

I’ve long thought that we will see communal living and tent cities as suitable options for some baby boomers.  Others sell their house and buy the big RV and cruise the country.

Did you catch the idea mentioned in the nytimes.com article called roam.co?

You pay $500 per week and live in psuedo-communal living at different locations around the world.  They are just getting started, so the locations are few, but the idea could catch on:

http://www.roam.co/about

Posted by on Apr 21, 2016 in Jim's Take on the Market, Market Conditions, The Future | 5 comments

NSDCC Spring Kick Report

2016-04-16 15.56.17-2

We’re well into the spring selling season (May 1st is twelve days away), and soon the talking heads will be touting fewer sales this year, compared to 2015.

It is short-sighted though, because 2015 was a great year, statistically.  When you consider that prices are still strong, and any softness in the market is at the high-end where hopefully sellers can endure, it’s hard to complain!

NSDCC Detached-Home Sales between March 1 – April 15

Year
# of Sales
Median SP
Avg. $/sf
2012
345
$813,500
$367/sf
2013
438
$873,250
$406/sf
2014
351
$1,030,000
$494/sf
2015
419
$1,100,000
$496/sf
2016
365
$1,142,331
$525/sf

Whether the demand is getting more picky or just taking a breather, to still have 365 sales after a 40% price hike in four years is phenomenal.

Posted by on Apr 19, 2016 in Jim's Take on the Market, Market Buzz, Market Conditions, North County Coastal, Spring Kick | 2 comments

NSDCC Avg DOM, 1st Qtr

sell

Our low inventory has buyers starved for houses to purchase.  When they see a good one, they react immediately – an attractively-priced house will have people driving by within the first hour or two on the market!

Sellers should be aware, and expect to sell their house right away.

Those who don’t shine up their house before listing, or those who get exuberant about price – thinking they have plenty of time – will miss a golden opportunity.  The most desperate buyers are motivated to pay top dollar in the first few days on the market!

Here are the number of NSDCC houses sold up to $1,400,000 in the first quarter, ranked by days-on-market:

Avg DOM
2013 #/SP:LP
2014 #/SP:LP
2015 #/SP:LP
2016 #/SP:LP
0
19/97.0%
8/98.2%
6/91.9%
9/97.4%
1-14
205/99.5%
169/99.4%
160/98.6%
125/99.3%
15-30
80/97.2%
58/97.7%
65/96.7%
64/97.7%
31-60
68/96.5%
78/96.5%
83/96.7%
72/97.0%
61+
157/95.5%
96//94.8%
104/96.1%
89/95.9%

Sellers – you want to get your price, right?

The houses that sell closest to list price are those that go pending in the first two weeks.  These SP:LP ratios are based on the list price on the pending date – the price which typically needs to be lowered first to get a buyer to offer, because they know it isn’t working after the first few weeks.

Hire a listing agent who can handle the immediate urgency – Get Good Help!

Posted by on Mar 31, 2016 in Jim's Take on the Market, Market Buzz, Market Conditions, North County Coastal, Thinking of Selling?, Why You Should List With Jim | 0 comments

Hot Times in the Southland

competition

Some great quotes on the current market conditions:

http://www.latimes.com/business/realestate/la-fi-spring-market-20160328-story.html

The couple is looking for a home under $2 million, but they’ve found little suitable near a good public school. They’ve put in only two offers in the roughly six months they’ve been looking — and were unsuccessful both times.

This month, Lee, 32, went to a packed open house for a four-bedroom house in north Redondo Beach. It was so busy that the real estate agent ran out of fliers. She put in an offer for more than the $1-million asking price but lost. Instead, the home went into escrow to another buyer, less than a week after it was listed for sale.

In such a hot market, would-be sellers are conflicted about whether to cash in now or wait for prices to rise further. Some have begun to question how long the hot market can last.

“They think we are due for a correction,” said Nikki Hochstein, an agent who specializes in the Westside and is helping the Lees find a home.

On a recent Sunday, about 150 people flocked to a three-bedroom condo in West L.A. for an open house, agent Tregg Rustad said.

Among the interested buyers were Sameena Shaikh, a medical researcher, and her husband, Muddassar, who works as a software engineer in Santa Monica.

The couple have been searching for a home for about a year but haven’t pulled the trigger. In that time, they’ve seen prices rise and now fear mortgage rates will jump. As they surveyed the packed open house they vowed to be less picky.

“We don’t want to make the same mistake,” Sameena said.

Muddassar explained their new tactic: “Let’s just buy something.”

Read full article here:

http://www.latimes.com/business/realestate/la-fi-spring-market-20160328-story.html

Posted by on Mar 28, 2016 in Frenzy, Jim's Take on the Market, Market Conditions | 1 comment

Coachella Valley Real Estate

2014-04-11 22.15.30

More in our series of how real estate markets are faring around the world.  I chose this report because of the realtor quote that the market is ‘in a bit of a slump’, resulting from a 15% shift in demand?  Markets could be that sensitive!

Our market doesn’t seem to be having any price declines or ‘slump’, but our NSDCC inventory priced above $1,400,000 is up 26% year-over-year, like mentioned below. 

http://www.huffingtonpost.ca/2016/03/26/low-loonie-california-rea_n_9551794.html

PALM SPRINGS, Calif. — Canadians are no longer flocking to California’s sunny Coachella Valley to buy homes since their currency has weakened, and many are putting properties they own up for sale, real estate experts said.

The move coincides with a decline in the Canadian dollar since oil prices have plummeted, the Desert Sun newspaper reported on Saturday.

After the U.S. housing market crashed in 2007, the Canadian dollar achieved parity with the U.S. dollar, prompting many Canadians to swoop up properties in the region.

Even as the U.S. economy recovered, Canadians still made up at least 15 per cent of homebuyers in California’s Coachella Valley, said David Emerson, a local real estate agent.

Now, home prices have fallen in the region, and the number of homes for sale has jumped. Inventory rose by about 25 per cent over the last year, according to the California Desert Association of Realtors.

“Our Canadian buyers are not buying,” Kelly Trembley, a realtor with Bennion Deville Homes, told the newspaper. “This was the perfect storm for the desert, and that’s why our real estate right now is in a bit of a slump.”

Brian and Linda Pahl — who live in Vancouver — bought a three-bedroom home in La Quinta more than two years ago for $450,000. Now the couple hopes to sell it for $725,000.

If the Canadian dollar strengthens down the road, however, Brian Pahl said he hasn’t ruled out another purchase.

“With the Canadian dollar being as low as it is, it pays to sell the home and pay the capital gains (tax),” he said. “We can buy again in two years.”

http://www.huffingtonpost.ca/2016/03/26/low-loonie-california-rea_n_9551794.html#slide=start

Posted by on Mar 27, 2016 in Inventory, Jim's Take on the Market, Market Conditions, North County Coastal | 0 comments

That’s It?

More lightweight coverage of the local real estate market – have you noticed how reporters don’t dig around much? The headline bait is embarrassing too – homes aren’t disappearing, they are just more expensive.

http://www.10news.com/news/starter-homes-disappearing-in-san-diego

Stunning new numbers confirm what first-time home seekers already know: It’s getting dramatically more difficult to find an affordable first home in San Diego County.

A new study by Trulia says the supply of starter homes has plummeted 80 percent over the last four years — to fewer than 1,000 homes for sale.

Starter homes, according to the real estate tracker, are in the lower third of prices. In the county, that means a median $327,400 for a home.  San Diego renters are feeling the pinch. Johny Thornton, a North Park resident, just got his rent raised by $75 a month.

“You pretty much just have to bite the bullet,” he said.

Thornton could try to buy a home, but it’s getting more complicated in the county, where demand far exceeds new home construction.

Trulia says most of the starter homes are in areas like downtown, El Cajon, Oceanside, Encanto and Spring Valley.

P.S. There is one house for sale in Oceanside under their $327,000 mark.

Posted by on Mar 24, 2016 in Jim's Take on the Market, Market Conditions | 2 comments

Solutions For The Non-Super-Rich

paloalto

Hat tip to Eddie89 for sending in this article – he also wondered when we’ll see this around here!

http://sanfrancisco.cbslocal.com/2016/03/22/250k-per-year-salary-could-qualify-for-subsidized-housing-under-new-palo-alto-plan/

Excerpts:

Palo Alto is seeking housing solutions for residents who are not among the Silicon Valley region’s super-rich, but who also earn more than the threshold to qualify for affordable housing programs.

The city council has voted to study a housing plan that would essentially subsidize new housing for what qualifies as middle-class nowadays, families making from $150,000 to $250,000 a year.

The plan would focus on building smaller, downtown units for people who live near transit and don’t own cars, along with mixed-use retail and residential developments.

“Prices have just gone through the roof, making it unaffordable for middle-class people, your firefighters, your teachers, and, frankly, some of your doctors,” Palo Alto Vice Mayor Greg Scharff said.

Scharff worries that losing middle-class workers will hurt the city. “What the council is proposing is that we work together to fund and subsidize, what is basically middle-class housing; which, traditionally, has not been subsidized,” Scharff said.

Bean can hardly believe it.

“We have people struggling to make it at a quarter-million dollars a year,” Bean said. “That’s a terrible thing.”

 

Posted by on Mar 23, 2016 in Bailout, Jim's Take on the Market, Local Government, Market Conditions | 6 comments

How Long Have Sellers Owned 2

The first posting in this series was on December 12 – let’s check in occasionally to see how long recent sellers owned their home before they sold it.  This is a review of NSDCC detached-home sales that closed in March, 2016:

Year of Previous Sale
1st Review (12/12/15)
2nd Review (3/19/16)
1900-1999
34 (27%)
28 (25%)
2000 – 2003
18 (14%)
19 (17%)
2004 – 2008
29 (23%)
33 (29%)
2009 – 2011
19 (15%)
12 (11%)
2012 – 2016
22 (18%)
21 (18%)
New Home
3 (2%)
1 (1%)

The long-time owners continue to lead the pack, with 42% having owned their home more than 12 years before selling it recently.

Buyers should be prepared for fixers, and sellers should do what they can to improve their home to sell because nearly half of the sales probably look dated.

Interesting that those who could make the quickest big profits, those who bought in 2009-2001, we’re the least likely to sell.

More stats:

Other Categories
1st Review (12/12/15)
2nd Review (3/19/16)
Number of Sales
125
114
Avg. $$/sf
$505/sf
$552/sf
Median SP
$1,080,000
$1,129,000
Avg DOM
60
38
Sold in First 10 Days
24%
32%
Lost $$
11
3
0 DOM
5
8

Pricing is still strong, and buyers are stepping up – with one-third of sales happening in the first 10 days on the market! (I was checking for relists too).

Posted by on Mar 19, 2016 in Boomer Liquidations, Jim's Take on the Market, Market Conditions, North County Coastal, Sales and Price Check | 2 comments