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Category Archive: ‘Market Conditions’

Market Impulse

The California Association of Realtors does a phone survey every month of 300 realtors (there are more than 250,000 licensees in the state).  They don’t offer any analysis on what their data means, or how to digest it – just the results:

http://www.car.org/marketdata/surveys/marketpulse/

Last Transaction
• 40% of transactions are closing below asking price, 34% are closing above asking price, and 26% are closing at asking. The discount on asking price is 7%, on average, down for the first time in 4 months. The premium paid over asking price is 8%, on average, down from 10% in April, but up from 6.5% in May 2014.
• 65% of properties are receiving multiple offers, down from 72% in April and up from 62% in May 2014. The average number of offers per property declined for the first time in 3 months to 2.8, from 3.6 in April.
• The proportion of homes that had listing price reductions decreased from 28% in April to 25% in May.

Market Conditions
• Floor calls, listing appointments, and open house traffic are up when compared to last month.
• Auctions are down from last month.
• All cash purchases are flat from last month
• Open house traffic and all cash purchases are up from last year.
• Open house traffic is up compared to a year ago.
• Auctions and all cash purchases are down from last year.
• The majority of members expect the same or better market conditions over the next year.

Great news for sellers! A third of you will get 8% over your price, a quarter of you will get your price, and the rest will have to live with a 7% discount. 😆

Seriously, if these results show anything, it’s that the ‘market’ is a mixed bag – and more random than ever.  The houses that are selling are those that are relatively-well-fixed-up and priced attractively, and those owned by sellers who can live with a discount for doing little or no repairs/improvements.  Make sure you pay the right price, for the right product!

Posted by on Jun 23, 2015 in Jim's Take on the Market, Market Buzz, Market Conditions | 0 comments

Staging Benefits

Visitors to today’s open house were very complimentary about the staging, and it does assist those who have trouble visualizing how to furnish a house.  The next-door neighbor at first wondered why we didn’t stage it sooner, but then mentioned that he doesn’t understand why it is needed.

This is a selfie film – If you are watching in front of a regular-sized computer screen, you may want to back up several feet before hitting the play button:

Posted by on Jun 20, 2015 in Jim's Take on the Market, Listing Agent Practices, Market Buzz, Market Conditions | 1 comment

Boomerang

From the SD Union-Tribune:

http://www.utsandiego.com/news/2015/jun/05/foreclosure-shortsale-boomerang-buyers-real-estate/?

An excerpt:

When Chad Sanfillipo got the keys to his house in Ramona last year, he had come full circle in the real estate market.

After losing his home to a short sale during the crash of the housing market, Sanfillipo was once again an owner.

“It felt so exciting to be able to buy again, to have something I own,” said Sanfillipo, 45, who rented for a couple of years before a bank would lend him money again. “There’s no landlord or rent check. I get to say what I get to do with my house.”

Sanfillipo, a systems engineer, is one of roughly 116,000 San Diego County residents who had either a short sale or foreclosure between 2006 and 2014, before and after the Great Recession, according to CoreLogic, a real estate data company.

The good news for Sanfillipo and others who lost their homes during the downturn is that there’s ultimately forgiveness in the lending market. Each month, thousands of San Diegans who went through short sales or foreclosures are completing waiting periods that render them eligible to once again apply for government-backed loans. In the worst case, some must wait seven years, but others can get new loans in just one, depending on whether they go through the Department of Veterans Affairs, Federal Housing Administration, Fannie Mae or Freddie Mac.

People who lost their homes during the recession but own again are called boomerang buyers, and they’re becoming a larger part of the market.

Boomerang buying is becoming a nationwide movement. The National Association of Realtors says that 9.3 million homeowners underwent foreclosures between 2006 and 2014. Already, 1 million of them purchased homes again, and an additional 1.5 million will become eligible over the next five years.

boomerang buyers

http://www.utsandiego.com/news/2015/jun/05/foreclosure-shortsale-boomerang-buyers-real-estate/?

Posted by on Jun 20, 2015 in Bailout, Foreclosures/REOs, Jim's Take on the Market, Market Conditions | 7 comments

California Home Sales in May

The state is cooking! She brings up a good point – it might be hotter if there was more to sell:

California home sales softened in May, but the housing market momentum continued to be solid as the spring home-buying season marked higher year-over-year home sales and prices for the fourth straight month, according to the CALIFORNIA ASSOCIATION OF REALTORS® (C.A.R.).

Highlights

  • Home sales rose above the 400,000 mark in May for the second straight month since October 2013 and were the second highest level in nearly two years. Closed escrow sales of existing detached homes in California totaled a seasonally adjusted annualized rate of 423,360 units in May.
  • The May figure was down 1.1 percent from the revised 427,880 homes sold in April, slightly below the long-run April-to-May average sales increase of 0.6%.
  • Home sales were up 8.9 percent from a revised 388,690 in May a year ago though, and the statewide sales figure so far has outpaced last year by more than 5 percent.
  • CKC.A.R. President Chris Kutzkey commented, “The spring home-buying season continues to be strong, especially in areas where insufficient housing supply is less of an issue. With mortgage interest rates edging up recently and an imminent increase in rates by the Federal Reserve, housing affordability concerns will be heightened but may also prompt prospective buyers to feel a sense of urgency to enter the market.”
  • The median price of an existing, single-family detached California home edged up in May from both the previous month and year for the fourth consecutive month. The median home price was up 0.8 percent from $481,880 in April to $485,830 in May, the highest level since November 2007.
  • May’s median price was 4.4 percent higher than the revised $465,470 recorded in May 2014. The median sales price is the point at which half of homes sold for more and half sold for less; it is influenced by the types of homes selling as well as a general change in values.
  • While sales continued to improve from last year at the state level, the number of active listings dipped slightly from the previous year, keeping the supply of homes on the market flat. The May Unsold Inventory Index was unchanged from the 3.5 months reported in April.

http://www.car.org/newsstand/newsreleases/2015releases/may2015sales

Posted by on Jun 19, 2015 in Local Flavor, Market Buzz, Market Conditions, Monthly Sales Count | 0 comments

More Market Pulse

From cnbc:

http://www.cnbc.com/id/102614420

The biggest barrier to a more robust spring housing market is simply a lack of listings, and there may be even fewer than we think, at least fewer homes people want to buy.

Nearly three-quarters of the homes on the market are “stale,” which is to say that they have sat on the market for more than a month with little to no interest from buyers, according to a new report from Redfin.

The number of homes for sale rose 2 percent in March from a year ago, according to a report from the National Association of Realtors released Wednesday. That, however, includes both new listings and homes that have languished on the market for months. With demand and sales increasing, there is just a 4.6-month supply of listings; a six-month supply is considered to be a healthy market balance between buyers and sellers.

There is something else at play as well: information. With so many websites and apps pushing moment-to-moment market movement, today’s buyers are increasingly data driven. Especially after the epic housing crash that gave birth to all this data, buyer psychology and suspicion are in full swing.

“The trust is broken among buyers. In Denver and Silicon Valley, if the house has been on the market for two weeks, there is something wrong with it,” noted Nela Richardson, Redfin’s chief economist. “Everyone is afraid to overpay, and the herd behavior in the stock market is something we’re now seeing in the housing market.”

Posted by on Apr 23, 2015 in Market Buzz, Market Conditions | 1 comment

Market Pulse

multiple offers steady

From C.A.R.

California REALTORS® responding to C.A.R.’s March Market Pulse Survey saw slightly more multiple offers than the previous month and an increase in floor calls, listing appointments, and open house traffic.  The Market Pulse Survey is a new monthly online survey of more than 300 California REALTORS® to measure data about their last closed transaction and sentiment about business activity in their market area for the previous month and the last year.

  • In a sign of sellers pricing their homes more in line with market conditions, the percentage of properties selling above asking price dropped from its peak in March 2014 at 40 percent to 25 percent a year later. However, the share was up from the lowest point of 16 percent in February.  Nearly half of homes (48 percent) closed below asking price.
  • The premium paid over asking price declined in March, indicating sellers’ and buyers’ expectations are more in line. In March, homes that sold above asking price sold for 7.5 percent above asking price, down from 10 percent in February, and essentially flat from 7.6 percent in March 2014.
  • Homes that sold below asking price sold for 11 percent below asking price in March, unchanged from February. The number of homes that had listing price reductions dropped from 31 percent in February to 22 percent in March.
  • Sixty-three percent of properties received multiple offers in March, up from 61 percent in February but down from 74 percent a year ago.
  • The average number of offers per property in March was 2.6, unchanged from February but down from 3.2 a year ago.
  • Floor calls, listing appointments, and open house traffic were all up in March, compared to both the previous month and year, suggesting the market will continue its upswing in closed escrow sales.

Posted by on Apr 22, 2015 in Market Conditions | 0 comments

NSDCC Could Be Hotter

With all the recent action mentioned in the previous post, it makes you wonder how much the market is fueled by frustration over the selection of homes for sale.  Yes, it is the “season”, but is the lack of inventory causing buyers to grab anything, at any price?

More inventory would help satisfy the demand, and help us discover if there is a ceiling to these prices. But adding just a few more houses for sale would only fire up the frenzy.

Here are the number of NSDCC houses listed between Jan. 1 and April 15th:

Year
Number of New NSDCC Listings, Jan 1 to Apr 15
2012
1,466
2013
1,565
2014
1,486
2015
1,483

Note how the hot frenzy in 2013 was fueled by having more homes for sale.  If we just had an extra 100-200 decent houses for sale now (especially under $2,000,000), they would likely get gobbled up.

Potential sellers, now is the time!

Posted by on Apr 21, 2015 in Jim's Take on the Market, Market Buzz, Market Conditions, North County Coastal, Spring Kick | 2 comments

Seller Demands

This article lays out the basic 12 tips for homebuyers to use when preparing to buy a home:

http://money.usnews.com/money/personal-finance/articles/2015/04/13/12-tips-for-spring-homebuying-in-a-sellers-market

The local market has been very competitive lately, with multiple offers on every quality offering.  Here are other things for home buyers to expect from sellers once you start making offers.

These aren’t thought out clearly by listing agents; instead, they are things done to them on previous deals so they will want to impose them on you whether they make sense or not:

1.  They will want you to shorten your contingency periods.

The common belief is that shorter periods will make you move faster, and then blow you out quicker if you aren’t a player.  But in reality, buyers get irritated and want to pay less or cancel as the manipulations start mounting.

2.  No appraisal contingency.

Buyers are prone to think, “But this is your price, and you want me to risk the appraisal coming in low?”

3.  Seller rentback.

Sellers want you to fund their retirement account, and have you let them live in your house for free for weeks or months.  Make sure the rent is retail-plus with heavy penalties if they don’t leave on time to ensure they move as agreed. Consider that the seller could declare bankruptcy the day after closing and make your life miserable for six months.

4.  Ernest-money deposit.

Even though it is refundable until you sign off all contingencies, the sellers will want you to increase it, just to make sure you know who the boss is.

 5. Buying ‘as-is’.

It already says in the contract boilerplate that the property is sold “as-is”, but the listing agents will mention it again just so you don’t get any ideas about asking for seller repairs.  Once you complete your inspection, the sellers and agent will expect you to live with any defects – regardless of how much you paid.

6.  Seller disclosures.

The confidence is already running high, so if there are any borderline disclosure issues, they might get left out by the sellers.  Make sure you thoroughly inspect the property, neighborhood, and HOA!

7.  Escrow and title companies.

Don’t even think about selecting your escrow and title companies, and expect that the seller choices on both will include some ‘co-ownership’ fine print later (i.e. kickbacks).

8.  Removing attached items.

Items attached to the home are part of the real estate, and are included in the sale by definition.  But don’t be surprised if the sellers strip out all the good stuff (TVs, lights, window coverings, etc.), and leave you with holes.

9.  Termite clearance.

Ha ha, very funny.  The sellers will expect you to live happily ever after with their termites, just like they have.

10.  Listing agent dominates the home inspection.

Buyers deserve to have a good look around during the home inspection, and get comfortable with what they are buying – chances are they have only seen it for a few minutes before then. Yet the listing agent wants to be there to “answer any questions”, and use that as a guise for snooping on the inspector to see if the problems and defects are really that bad.  Kudos for being concerned, but uncomfortable buyers are less likely to close escrow.

Because a bidding war feels like hitting the lottery, sellers and their agents get giddy and don’t consider how their demands can turn off buyers, and make them want to pay less, not more. 

If you want to sell for top dollar, hire a listing agent who can tactfully include safeguards that don’t cause buyers to go backwards.

Posted by on Apr 15, 2015 in Bidding Wars, Market Buzz, Market Conditions | 2 comments

Monthly Housing Survey

another survey.

Fannie interviews 1,000 people every month, and then leaves it up to their ivory-tower guy to explain it to the masses.  Here’s my conclusion from my own personal survey: buyers are being cautious due to prices going up so fast.

http://www.fanniemae.com/portal/research-and-analysis/housing-survey.html

Consumer attitudes toward housing appear to have stalled somewhat amid a recent dip in confidence regarding personal finances and income growth, according to results from Fannie Mae’s March 2015 National Housing Survey.

Among those surveyed, the share who expect their personal financial situation to improve over the next year fell to 41 percent last month, while those who said their household income is significantly higher than it was 12 months ago fell to 22 percent.

Additionally, the share of respondents who said they would buy a home if they were to move decreased 5 percentage points to 60 percent – a new all-time survey low.

On the bright side, the share of consumers who believe now is a good time to sell a home reached a new survey high of 46 percent, narrowing the gap with those reporting it is a good time to buy, perhaps signaling a more balanced housing market.

“Consumers are being patient prior to entering the housing market. Our March survey results emphasize how critical attitudes about income growth are to consumers’ outlook on housing,” said Doug Duncan, senior vice president and chief economist at Fannie Mae. “We’ve seen modest improvement in total compensation resulting from a strengthened labor market. However, income growth perceptions and personal financial expectations both eased off of recent highs, consistent with Friday’s weak jobs report. Simultaneously, the share of consumers expecting to buy on their next move has declined. We believe the recent setback in consumer sentiment should be short lived if early signs of income growth bear out and occur in proportion to expected interest rate increases. Meanwhile, the wait for housing expansion continues.”

http://www.fanniemae.com/portal/research-and-analysis/housing-survey.html

Posted by on Apr 7, 2015 in Jim's Take on the Market, Market Conditions, Spring Kick, Survey | 0 comments