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Jim Klinge
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701 Palomar Airport Road, Suite 300
Carlsbad, CA 92011

Category Archive: ‘Market Conditions’

Wheel Estate

For those on the other end of the spectrum, all it can take is a bad break like a serious medical issue or unemployment to cause a disruption in housing.  Many are living out of their car:

Extreme housing prices in California — driven by a combination of speculation, favorable legal/tax positions for landlords, foreclosures after the 2008 crisis, and an unwillingness to build public housing — has created vast homeless encampments, but there’s a less visible side to the crisis: working people in “good jobs” who have to live in their cars.

There’s a whole subreddit devoted to these folks, a mix of maker culture (modding cars to make them more comfortable as homes), hobo chalk-marks (where can you park, and for how long?), and generalized anxiety.

It’s not just single middle-class people, either — they’re roaming America’s streets in company with a vast nomad army of homeless seniors who drive from town to town looking for seasonal work to replace their busted pensions.

What’s striking in California is that many communities already accept people living in vehicles, despite there often being rules or laws against it.

This fall, the city of San Diego expanded its Safe Parking Program, which designates lots that can be used by those living out of their cars, and many other cities have similar programs. Under a law passed last year, Los Angeles also allows overnight parking in some commercial districts. In Mountain View, the mayor brags about the services his city provides to those living in more than 330 cars, trucks and RVs.

Read full article here:


Posted by on Jan 3, 2018 in Jim's Take on the Market, Market Conditions, The Future | 2 comments

Slow Start in 2018?

During our recent frenzied market conditions, getting a good price has taken a back seat to winning the bidding war.

Our SD Case-Shiller Index reflects it – the trend has been very positive:

But the most-recent Case-Shiller reading for San Diego was flat – the steady gains we’ve had every month of 2017 came to a abrupt halt. Just an anomoly?

Our 2017 market was similar to the Frenzy of 2013 – we called it ‘frenzy-lite’. After the frenzy topped off in September 2013, prices were flat for 4-5 months.

True, once we got into the spring selling season of 2014, prices resumed their ascent, and the SD Case-Shiller Index has risen 25% since!

What can we expect now?

A. Sellers and agents have heard that inventory is as low as ever, and can’t resist adding a little extra mustard to their list price, just in case.

B. Buyers have heard that the tax reform will cost them more, and possibly cause prices to go down. They will hesitate to pay more – especially for those homes that need work. After looking this long, it’s too easy to wait-and-see for a few more months.

C. The NSDCC inventory today is about 20% lower than it was last year…..and boy, is it picked over. The sales counts for January are going to be disappointing, unless we get a surge of new listings.

D. Pricing momentum is fueled by sales. Fewer sales = less pricing pressure because of the lack of comps.

Somebody has to go first. Who will be setting the market in early-2018?

  1. Frustrated buyers who just want to get a house.
  2. Affluent people who don’t own here yet.
  3. Those who sold recently and are re-investing their windfall.
  4. Those who have grandkids here.

These are the people who will keep paying whatever it takes – to them, a house is more valuable than +/- a few bucks.  They’re not very price sensitive.

We’ll be fine by March/April – as long as there are decent houses for sale!

Posted by on Jan 2, 2018 in Jim's Take on the Market, Market Buzz, Market Conditions, North County Coastal, Why You Should List With Jim | 2 comments

NSDCC 2018 Inventory

There are other variables, but the amount and quality of the inventory will determine our fate in 2018.  Even with our Sandicor MLS logging duplicate listings, our count of houses for sale between La Jolla and Carlsbad dropped about 10% this year!

It wouldn’t matter if we cut back on the number of higher-end listings – there would still be plenty to go around.  Where did the shortage happen this year?

# of Listings Under $1M
# of Listings Over $2M
Total # of Listings

The number of high-enders were remarkably about the same as last year – the shortage this year was almost entirely on the lower end.

Today, there are only 41 houses for sale priced under $1,000,000. There will be more, but I think we can expect the number of sellers willing to take less than a million to drop even further in 2018 – less than 1,000 for sure, and possibly as low as 700-800 listings.

There were 882 NSDCC houses sold this year under $1,000,000 (so far). We could still have close to that many sell again in 2018 if the frenzy picks up on the cheapies and virtually every listing sells.

Posted by on Dec 28, 2017 in Frenzy, Inventory, Jim's Take on the Market, Market Conditions, North County Coastal | 4 comments

Zillow 2018 Forecast

For those who are putting the finishing touches on their own 2018 forecast, here’s how close the Zillow Group guesses have been:

Local ZHVI-Appreciation Forecasts

2015 Forecast
2016 Forecast
2017 Forecast
2018 Forecast
Carmel Valley
Del Mar
La Jolla
San Diego
Solana Beach

Their guesses have been conservative, and for their 2018 forecasts, they pretty much just halved the appreciation gained in 2017.

The Zillow data changes slightly, depending on where you look on their website, and whether you use town names or zip codes. Here is the LINK to find others.

Posted by on Dec 27, 2017 in Forecasts, Market Conditions, North County Coastal, Zillow | 2 comments

2018 Predictions

JtR Predictions


I guessed we would see 2016 sales drop by 5%.

Instead, they went up 3%, and the median SP went up 6%!


I guessed that we’d have 3,100 sales in 2017, and the median sales price would be $1,200,000. How’s that is turning out?

NSDCC Annual Sales
Median Sales Price
3,016 (today)

The number of 2017 sales should wind up being higher than last year, and also the highest count since the Frenzy of 2013 – and that’s with a median sales price that is 29% higher than in 2013!


I guessed earlier that NSDCC detached-home sales will drop 5% in 2018 – but that would still give us around 3,000 houses sold, which is a healthy amount, given that rates and prices are both expected to be higher.  The median sales price, full of imperfections, should keep rising, and I’ll guess +5% in 2018.

Those same factors, plus a few more boomer liquidations, could also create a bull rush frenzy, with intense wrangling for decently-priced houses listed under $1,500,000.  With more inventory, we could approach 3,200 sales again.

The higher-end market is challenging too, but in the opposite direction.  Today there are 374 NSDCC houses for sale listed over $2,000,000, and we sold about 50 per month in 2017.

2018 Predictions By Readers:

Rob Dawg:

High end volume and price stagnant.

Median rises 8% because every low priced property disappears sold or doesn’t sell. Median rises 8% because median properties are going to be owner improved in order to command a higher price. Total volume however will drop 10% for the same reasons.

It is almost as if financial events have been financialized. No room for small fish in the real estate ocean.

The next stock market event doesn’t lower prices only freezes activity.

Makes me so mad I want to drive a minivan into a swimming pool.

franklin Jones:

My guess, home sales remain -2% due to a lack of inventory in the low end coupled by price increase in that sector. With a median sales price up 5.5% for 2018.

The lower end property will be very competitive. Lets take Encinitas, don’t think you are gonna find a SFR that is decent for under 800K anymore, next will be South Carlsbad which will be under 700K…that is coming. Good time to buy anything over 1.5 mil especially Cardiff and Rancho Santa Fe…good value for the money considering what new homes are going for, we are talking 800K for new San Marcos and up with any kind of a view. that city has really come up in the last five years.

I think for a second house, or rental you cannot go wrong with the beach areas, yea the price, but I think no matter what happens in the future people will always want to live at or near the beach and I don’t see rents tanking anytime soon. Interest rates are gonna up…3.6 to 4.0 this year, next I see towards the end of the year 4.5…in terms of interest that is a 12% increase in interest payments in terms of whole dollars…Lock it in now..while the money is still very cheap. 5years from now when we are at norm…which is 6.5% or more than 50% more interest if you consider 4% or thereabouts. We will see price fluctuation but at these rates lock and load at either 15 years or 30 years..

What do you think?

Posted by on Dec 27, 2017 in Forecasts, Jim's Take on the Market, Market Conditions, North County Coastal | 2 comments

Housing Cycle

Now that the tax reform is happening, what will it means for housing? We already have a natural cycle that has been maturing, and how buyers and sellers interpret the tax reform could exacerbate the issue.  It will take healthy employment and incoming retirees to keep the party going!

From our friends at John Burns:


San Diego is looking pretty good for employment:

Posted by on Dec 21, 2017 in Frenzy, Jim's Take on the Market, Market Conditions, Tax Reform | 1 comment

Tax Reform – Final Bill

We knew these were coming:

The legislation preserves the deductions for mortgage interest and charitable giving, though it lowers the cap on the mortgage deduction from $1 million to $750,000.

Seeking to win over House Republicans from high-tax states, the conference committee legislation caps the state and local tax deduction at $10,000, with filers allowed to deduct property taxes and state and local income and sales taxes.

Those aren’t quite as generous as before, but a happy compromise.

What about the change from owning your home for two out of the last five years to get up to $500,000 tax-free profits?  Both the House and the Senate wanted to change the time period to owning five out of the last eight years.

I found this on page 663 of 1101 here:

I’m not a lawyer, and could be a little woozy after scrolling 600+ pages, but I think they threw it out altogether!  Before I get too excited, can an attorney tell us that ‘No provision’ means nothing was included in the final bill?

If the two-out-of-five-years is still the law, then the realtor spokespeople better be running to the microphone to declare total victory, and assuring everyone that property values won’t be going down 5% to 15% now!

Posted by on Dec 15, 2017 in Frenzy, Jim's Take on the Market, Local Government, Market Conditions, Tax Reform | 37 comments

California’s Housing Failure

We see these stories regularly now, but nothing is changing.  Even if we had another housing crash and prices retreated by 10% or 20%, homes would still not be affordable for most.  Hat tip to Richard!


For all of its claims of being an economic paradise, California is a failure when it comes to housing.

Not just low-income, affordable housing, but middle-income, working-class housing for teachers, firemen and long-time residents hoping to live anywhere near work.

“California has a housing crisis. We can’t provide housing to our citizens,” said Rita Brandin, with San Diego developer Newland Communities. “In Georgia, Texas and Florida, it can take a year and a half from concept to permits. In California, just the process from concept to approvals, is five years – that does not include the environmental lawsuits faced by 90 percent of projects.”

Numbers tell the story of California’s housing crisis.

* 75 percent of Southern Californians can’t afford to buy a home, according to the state realtors association.

* 16 of the 25 least affordable communities in the US are in California, according to 24/7 Wall Street.

* Officials this year declared a homeless emergency in San Francisco, Los Angeles, San Diego and Orange counties.

* 56 percent of state voters say they may have to move because of a lack of affordable housing. One in four say they will relocate out of state, according to University of California Berkeley’s Institute of Governmental Studies.

 * A median price home in the Golden State is $561,000, according to the realtors association. A household would need to earn $115,000 a year to reasonably afford a home at that price, assuming a 20 percent down payment. Yet, two thirds of Californians earns less $80,000, according to the U.S. Census Bureau.

* The household income needed to afford a median-priced home in the Silicon Valley town of Palo Alto is $450,000.

* In San Francisco, a median priced home is $1.5 million, according to the Paragon Real Estate Group.

* Home prices in California are twice the national average, and 70 percent can’t afford to buy a home, according to state figures.

* Median household income in L.A. is $64,000. That’s half what is necessary to buy a home.

*1 in 10 residents are considering leaving because they can’t afford a place to live, according to a state legislative study, while US Census figures show 2 million residents, 25 and older, have already left the state since 2010.

* In 2016, 30 percent of California tenants put more than 50 percent of their income toward rent and utilities, according to the California Budget & Policy Center. Economists consider 30 percent the limit.

* California needs to double the number of homes built each year to keep prices from rising faster than the national average, according to the Legislative Analyst’s Office.

“The biggest tragedy of California is we have stopped building houses for the middle class,” said Borre Winkle with the Building Industry Association of San Diego. “Think of California’s housing market as a martini class. We’re building some affordable housing at the low end. Absolutely nothing in the middle and the top end is high-income housing, which subsidizes low-income housing. So that is a broken system.”

In 2016, the cities of Houston and Dallas built more homes, 63,000, than the entire Golden State, which built 50,000, according to US Census Bureau figures.

“Supply and demands works,” said USC real estate professor Richard Green. “People want to be here and we’re not accommodating them with new housing and so the cost of the housing goes up.”

Read full article here (blaming building fees and NIMBYs):


Posted by on Dec 15, 2017 in Builders, Jim's Take on the Market, Local Government, Market Conditions | 10 comments

NSDCC November Sales

Much like in the last presidential election cycle of 2012, the November, 2016 sales were high, and led to a frenzied selling season the following spring (we had 4% more NSDCC sales in 1H17 than in 1H16).  But sales were solid last month too, which hopefully means Spring 2018 will be lively.

NSDCC November Sales

# of Sales
Avg. $$/sf
Median Sales Price
Median DOM

This is only one-month’s worth of data, but these stats suggest that pricing may have topped off, and we’re finding an equilibrium.  The average $$/sf and median sales price from last month are closer to those from 2015 than 2016.

It’s interesting that the median days-on-market is almost half of what it was five years ago!  There’s not much hesitation in buyers these days.

Posted by on Dec 12, 2017 in Jim's Take on the Market, Market Conditions, North County Coastal, Sales and Price Check | 2 comments