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Category Archive: ‘Market Conditions’

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

Tiny!

There has to be more movement towards smaller living quarters, if for no other reason than to just reduce housing costs.  This is really small, but I like the transport-ability:

Kasita is a 270-square foot high-tech home designed so people can afford to live in otherwise expensive city centers. These small sleek box-shape units are also stackable and can move between cities.

Posted by on Mar 18, 2016 in Jim's Take on the Market, Market Conditions | 1 comment

Impact of Downsizing Trend

Yesterday we noted how the high-end market is brimming with more inventory.

Having 424 active listings priced over $2,400,000 this early in the season is quite a load – it’s more of a late-summer type of number.  Could the sluggishness have an impact on the markets priced below?

Probably not – it is the tale of two markets, and they can co-exist.

The underlying problem is that downsizing is the trend, leaving the high-end sellers competing for the scant few buyers.

There were only 17 sales last month of NSDCC homes priced over $2,400,000.  Only four of those were in Rancho Santa Fe, where today there are 166 active listings over $2.4 million.

Of the NSDCC houses sold in February, only 12% were over $2,400,000.

Today, 47% of the active inventory is priced over $2,400,000!

Thankfully, the high-enders are a group that can probably endure.  If they really needed to sell and had to lop off $1,000,000 to get out, they’d survive.  It’s what they would have gotten 3-4 years ago.

What would be really exciting is if the high-end market did catch fire, and add more downsizing buyers to the demand below.  I’ve received six written offers on the Salisbury listing – all from owner-occupiers – and it’s gone over list price!

Maybe the lower-end markets can stay hot, and prices rise faster to assist more move-ups!  One way or another, we should have an orderly shuffle to the exits.

Posted by on Mar 15, 2016 in Inventory, Jim's Take on the Market, Market Conditions | 0 comments

Denver

den

Another city that is experiencing low inventory. At the end of the video, the reporter said in February there were 4,000 active listings, and in 2006 there were 25,000:

http://www.9news.com/news/local/low-inventory-leads-to-creative-home-buying-tactics/78582486

An excerpt:

“We’ve certainly received handwritten letters that have been left on our doorstep,” said Troggio. “In addition to that, we often get legal-typed letters that say, you know, ‘I’m a real estate agent and I have a client who’s interested in purchasing your property.”

Real estate agent, Anthony Rael is familiar with these tactics.

“It shows you the level that some buyers will go to, to try to let it be known that look, I’d love to live in this neighborhood,” said Rael, who serves as chairman of the Market Trends Committee for the Denver Metro Association of Realtors.

The latest DMAR Market Trends Report showed the metro area closed out February with a historically low 3,963 active listings. That’s a six percent decrease in inventory over January and a 2.8 percent decrease year over year.

“Usually around this time of year, as we start to enter the spring market, we start to see more and more inventory online. So far, it hasn’t materialized,” Rael explained. “We’re hopeful, for the buyers’, sake we get some more inventory coming online really soon here.”

Posted by on Mar 14, 2016 in Jim's Take on the Market, Market Conditions | 0 comments

Boom or Doom?

Our favorite doomer has published some interesting stats about the Bay Area:

BA

But he is looking at one month only, and comparing to one year only, 2015, which was hot. We’ll see how it plays out.

Yesterday around here we saw a 9% increase in NSDCC new listings and a 9% drop in sales year-over-year for the first two months of 2016 – which looks rather tame compared to those Bay Area numbers.

We can break it down further too.  The lower price ranges have been in a tight range for the last two years, both in the number of active listings and average list-price-per-sf. There certainly has been more new listings this year in the Above-$1,400,000 range, but unless there is a major panic, they will wait until someone comes along:

NSDCC Inventory in the First Week of March

Up to $800,000
# of Active Listings
Avg LP/sf
Avg. SF
2014
82
$397/sf
1,942sf
2015
70
$379/sf
1,945sf
2016
49
$388/sf
2,108sf
$800K-$1.4M
# of Active Listings
Avg LP/sf
Avg. SF
2014
202
$421/sf
2,936sf
2015
200
$438/sf
2,885sf
2016
207
$418/sf
2,904sf
$1.4M – $2.4M
# of Active Listings
Avg LP/sf
Avg. SF
2014
221
$585/sf
3,761sf
2015
198
$602/sf
3,653sf
2016
254
$574/sf
3,595sf
Over $2,400,000
# of Active Listings
Avg LP/sf
Avg. SF
2014
309
$1,004/sf
6,628sf
2015
316
$1,058/sf
6,342sf
2016
414
$956/sf
6,085sf

Mark says prices in key STEM-centric markets will drop 40% – but if sellers can’t get their price, they are more likely to wait, than dump.

Higher-end sellers are just testing the market, and if they are desperate to sell, a few might lower their price in the summer.  But most will wait it out for months or years – they’re not going to give it away!

Link to Mark’s full article:

http://mhanson.com/3-11-hanson-dying-unicorns-still-leave-hoof-prints-just-know-look/

Posted by on Mar 12, 2016 in Jim's Take on the Market, Market Buzz, Market Conditions, North County Coastal, Sales and Price Check | 0 comments

Renovate America HERO

2016-03-10 15.53.17

Renovate America finances energy-efficient home improvements, and is part of the PACE program.  Because the ensuing loan gets put on your property-tax bill, it becomes a negotiable item when selling.

This film is a public service to help participants learn the basics – because you will come across these HERO loans when buying and selling.  Renovate America has been approved by 350 municipalities in California, and have every intention of expanding throughout the country – they have 600 employees!

They have the potential of becoming the Zillow of the home improvement sector – they think big. They have already implemented several customer-care benefits like monitoring the contractors – who don’t get paid until the consumer signs off – and providing contractor-dispute resolution whether the company is involved or not.

Loans are based on the homeowner having at least 10% equity based on a recent appraisal, or values from four AVMs (no income-qualifying required).  The loans are sold on Wall Street as HERO bonds.

Here is an introduction:

Posted by on Mar 10, 2016 in Jim's Take on the Market, Market Conditions, Remodel Projects, Repairs/Improvements | 13 comments

Report on China Real Estate Expo

shanghai

The 11th Annual Overseas Property & Immigration & Investment Exhibition was conducted in Shanghai this past weekend.  A contingent of Mandarin-speaking agents from Orange County had a display booth, where they included three of my listings among their offerings.  They had hoped to make deals on the spot!

It turned out to be a ‘huge disappointment’.

My guy said they hit the ‘perfect storm’ of variables:

  1. The Chinese government has clamped down on money flowing out of China, and the majority of people who came to the expo were wondering just how to get their money out of the country, let alone buying properties.
  2.  One month ago, the Chinese government also lowered the down payment required to buy local properties, which is fueling a resurgence of real estate investment there.
  3.  The currency exchange rate is going in the wrong direction.

He only got two leads out of it, one for Boston, and one for Houston properties.  It’s a long ways to go for a couple of out-of-state possibilities!

He said the best hope going forward was for selling lower-cost properties, like condos for kids around major universities.

yuan

Posted by on Mar 10, 2016 in Jim's Take on the Market, Market Buzz, Market Conditions | 1 comment

Inventory Watch

March 2016 248

There were 123 new listings this week, compared to 80 the previous week, and it was the highest count since early July.  The season is here!

Last week we saw how the higher-end inventory had ballooned, and now there are 666 active listings over $1,400,000 in NSDCC.

But since last Monday, 26 houses listed over $1.4M have gone pending!

In 2015, there were 973 higher-end sales (avg 81/mo.), and 53% of them closed in the first half of the year. It is conceivable that we could do it again!

Click on the link below for the complete NSDCC active-inventory data:

Read More

Posted by on Mar 7, 2016 in Inventory, Jim's Take on the Market, Market Conditions | 0 comments