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Category Archive: ‘Market Conditions’

60% Looking to Downsize

I don’t know about the relevance of the others above, but the 60.6% of Americans looking to downsize is a nice idea – and probably where the conversation about market conditions begins.

Does anyone HAVE to downsize?

Not really – the worst cases are the seniors in a two-story home who can no longer handle the stairs, but they can always install an elevator or camp out permanently in the living room.

I think we are going to have a limited supply of homes for sale until those thinking of downsizing really NEED to move.  If they are flush, they will most likely stay put.

It will be those who need to tap their equity to stay alive that will finally cut loose of the long-time family homestead, and leave town.

This might be where the virtual-reality headsets could pay off.  Downsizers could take a convenient virtual tour of all the cheaper areas around the Southwest to see if anything is tempting!

Posted by on May 9, 2017 in Boomers, Jim's Take on the Market, Market Conditions | 1 comment

NSDCC Inventory, First Third of Year

So our NSDCC market is cooking….is the amount of inventory to blame?

One-third of 2017 is complete – let’s compare it to recent years:

New Listings Between January-April

Year
New Listings, Jan – Apr
New Listings in April only
2013
1,822
534
2014
1,746
511
2015
1,747
471
2016
1,906
512
2017
1,695
456

Prices are at all-time highs, and FEWER people want to sell??

How can you explain it?  What is different now?

Is it His Orangeness?  The change in president is a notable difference between 2017 and the previous years, but there hasn’t been any specific orders directed at the real estate business, and mortgage rates have stayed about the same.  He could be causing more people to hunker down, but you would think that people would be just as likely to flee!

Potential home sellers know by now what’s in store with Trump.  Not much, if anything, will get done that impacts the real estate selling business.

So what is it?  Why aren’t more people selling at these prices?

It’s because they have nowhere to go that is any better.  The baby-boomers who own most of the coastal real estate have successfully bought one or more personal residences to get to this one, and it will do – it is their trophy property.  Selling a rental property via a 1031 exchange just to avoid taxation isn’t worth the hassle – and how do you do any better than NSDCC?

There are approximately 300,000 people in our market, hopefully we will have at least 1,600 houses to sell during the first four months of every year.

It is the 10% to 20% on the fringe that make the difference.

Some years there are a few extra people who decide to list their house. In 2016 we had 7% more houses listed than the 5-year average. A surge like that can result in more sales, or cause buyers to wait-and-see – it depends on price.

Baby boomers are young enough that they can still manage to live in their long-time residences, but this really should be the peak of the low-inventory era.  Don’t we have to see more boomer-owned properties coming to market as they shuffle off to the retirement home, or the Big McMansion in the sky?

Keep an eye on the fringe – the extra 10% to 20% surges in inventory is where we will see a notable change first!  Until then, expect more of the same!

Posted by on May 8, 2017 in Inventory, Jim's Take on the Market, Market Buzz, Market Conditions, North County Coastal | 3 comments

San Diego HUD Low-Income

The rich, and everyone else. Thanks daytrip:

http://www.ocregister.com/2017/05/03/84000-a-year-now-qualifies-as-low-income-in-high-cost-orange-county/

A family of four with an annual income of $84,450 or less now qualifies as low income in Orange County.  A single person living alone qualifies as low income if he or she earns $58,450 or less a year.

Orange County has the fifth-highest income threshold in the nation, according to new income limits released last month by the U.S. Department of Housing and Urban Development.

Government and private agencies use HUD’s income calculations to determine eligibility for a wide variety of assistance programs, ranging from rent subsidy vouchers and public housing to mortgage assistance. While low-income families qualify for some programs, others are limited to households earning far less, with limits as low as $31,300 for a family of four.

Record-high rents and home prices are driving up Southern California income limits. Orange County apartment rents, for example, increased 20 percent over the past seven years, while the median sale price of an Orange County house has jumped 40 percent.

“When you tell somebody that’s making $70,000 that they’re low income, they go, ‘What? That’s low income?’ Unfortunately, that’s what comes from living in a high-cost county,” said Cesar Covarrubias, executive director of the Kennedy Commission, an Irvine-based affordable housing advocacy group. “That makes it difficult for working families at all levels.”

Even a six-figure salary doesn’t cut the mustard in San Francisco, Marin and San Mateo counties. A family of four there earning $105,350 or less now is considered low income, HUD figures show.

Orange County income limits for a family of four exceed Philadelphia’s ($66,550), Seattle’s ($72,000), Los Angeles County’s ($72,100), San Diego’s ($72,750) and Boston’s ($78,150).

Posted by on May 4, 2017 in Jim's Take on the Market, Market Conditions | 2 comments

Pending-Sales Index Down in SD

Something price could fix…..

California pending home sales downshift for third straight month in March

LOS ANGELES – Even with a strong performance in March closed escrow sales, a shortage of available homes and robust price growth that’s eating away at affordability stifled pending home sales for the third straight month, the CALIFORNIA ASSOCIATION OF REALTORS® (C.A.R.) said today.

Following seasonal factors, REALTORS® responding to C.A.R.’s March Market Pulse Survey saw elevated market activity, with an increase in floor calls, presentations, and open house traffic for the third month in a row.

Pending home sales data:

• Based on signed contracts, statewide pending home sales decreased for the third straight month in March on a seasonally adjusted basis, with the Pending Home Sales Index (PHSI)* declining 4.5 percent from 112.5 in March 2016 to 107.4 in March 2017. On a monthly basis, California pending home sales dipped 2.9 percent from the February index of 110.6.

• March’s pending sales decline is the greatest so far this year, portending sales activity in the usually busy spring homebuying season will be dampened, primarily due to demand outstripping the supply of active listings, which was 12 percent lower than in March a year ago.

• At the regional level, Southern California remains the bright spot in the state, which led both in closed escrow sales in March and the smallest decrease (-1.3 percent) in March non-seasonally adjusted pending sales. In fact, Los Angeles and Riverside counties were the only two areas of Southern California that saw an increase in pending sales from a year ago, at 1.6 percent and 3.1 percent, respectively. Pending sales fell 3.6 percent from March 2016 in Orange County, 5.6 percent in San Diego County, and 8.0 percent in San Bernardino County.

http://www.car.org/aboutus/mediacenter/newsreleases/2017releases/mar2017pendingsales

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Posted by on Apr 29, 2017 in Jim's Take on the Market, Market Conditions, Sales and Price Check | 21 comments

Seattle!

Yesterday it was Seattle that had the highest increase in their Case-Shiller Index, rising 12.2% Y-o-Y.  You know that frenzy fever is high when the quotes barely make sense:

LINK

Andrea Conway’s home selling story has become the norm for Seattleites. She bought her Ballard home for a little under $500,000 around Easter 2014 and just sold it for more than $750,000

From the time they listed to the time they sold, the Conways, who are moving to California, had multiple offers and closed within a week. Realtors say that is very common right now for Seattle sellers. The buyers paid in all cash.

“Sellers are putting houses on the market, and it’s just normal for things to sell above list price and in some cases well above list price,” John L. Scott Realtor Carl Shaw said. “In a lot of cases, you’re seeing anywhere from four-to-eight, up to 15 or 20 offers on houses.”

The Conways say they may move back to Seattle in a few years, but right now they have decided to leave the city.

“We love it. We love the Seattle vibe, but the real estate market is so hot right now that we’re not comfortable, and we really can’t afford to put our money in this market right now,” Conway said.

She has this advice for buyers.

“Be prepared to spend considerably more than the asking price, especially if it’s in one of the hot neighborhoods like Ballard, or Fremont, or Wallingford, or West Seattle,” Conway said.

Shaw told us that buyers should be prepared to have as much cash ready as possible or have complete loan approvals.

Shaw has been doing this for 28 years and says the only other time when he saw this hot of a job and housing market was in 2006.

“In that market (2006) we had a ton of inventory, we had builders with a ton of inventory, and the difference now is that we have really strong job growth and next to no inventory,” Shaw added.

Next to no inventory is a tough reality for buyers, but for the Conways it is a blessing.

“We’re thankful, and we’ll see what the next adventure holds for us,” Conway said with a smile.

Posted by on Apr 26, 2017 in Frenzy, Jim's Take on the Market, Market Conditions | 10 comments

Burbank!

http://www.cnbc.com/2017/04/24/spring-housing-strongest-sellers-market-ever.html

Spring homebuyers are pounding the pavement at a furious pace, but the pickings are getting ever slimmer.

Even as more homes come on the market for this traditionally popular sales season, they’re flying off fast, with bidding wars par for the course. Home prices have now surpassed their last peak, and at the entry level, where demand is highest, sellers are firmly in the driver’s seat.

“I’ve been selling real estate for 25 years and this is the strongest seller’s market I have ever seen in my entire real estate career,” said David Fogg, a real estate agent with Keller Williams in Burbank, California. “A lot of our sellers are optimistically pricing their homes in today’s market, and I have to say in most cases we’re getting the home sold anyway.

Fogg listed a three-bedroom, two-bathroom, 1,240-square-foot home in Burbank for $789,000 and had three offers before the first open house Sunday. In the Los Angeles-area market, that is considered an entry-level home. The open house drew more than 100 potential buyers, most of them already weary of the competition.

“It’s very tough. Most of the listings are intentionally listed a little low to get a lot of attention, and it’s not uncommon to get 12 to 16 offers on one property,” said Jilbert Mosessian, who has been renting in the neighborhood but wants to buy. “In three properties recently, we did our best, we went considerably over the listing price, and we were told that there were still five people above us and they were only going to deal with them.”

Mosessian said he will have to try another neighborhood and cut his expectations.

Posted by on Apr 24, 2017 in Frenzy, Jim's Take on the Market, Market Conditions | 1 comment

Boomer Liquidation Postponed

This guy saw it like I did – that there would be “the great senior sell-off”, but he had more concern that the millennials wouldn’t be there to pick up the pieces. He is back-pedaling now on when it will happen – and I think he is just guessing. It will happen when it happens, and each neighborhood will be affected differently. Hat tip daytrip!

It’s a dilemma that has preoccupied Arthur C. Nelson, a U of A professor who spoke with former CityLab staff writer Emily Badger in 2013 about what he dubbed “the great senior sell-off.” Nelson postulated that Boomers would soon be selling their homes in droves, but would be hard-pressed to find buyers—mainly because Millennials wouldn’t want to buy them.

Nelson pointed to the affordability issue as well as the fact that about a quarter of Millennials prefer urban housing, such as condos or townhouses, over the detached suburban homes that were the Boomers’ preferred habitat. Younger buyers, he said, will also be looking for starter homes—smaller than the big Colonials and split-levels that line America’s cul-de-sacs. “We can predict the next housing crash,” he said at the time. “That’ll be in about 2020.”

Four years later, Nelson tells CityLab that he believes the sell-off will still occur—but later, in the mid- to late 2020s.

This has to do with people deciding to defer selling their homes, hoping to get a better price later than settling for a lower price now. “Home values in much of the country are still less than those before the Great Recession of 2007 to 2009,” he says. Prior to the recession, the typical homeowner would sell a house about every six years. “It was like clockwork,” says Nelson. “This drove a lot of planning and development projections.”

“It’s not that Boomers are going to ‘age in place,’” says Nelson. “They’re going to be stuck in place, and they’re going to make the best of it.” Those who can afford it will remodel.

Though Jennifer Molinsky, a senior research associate at Harvard’s Joint Center for Housing Studies, agrees that exurbs and rural areas will likely be vulnerable to the Boomer/Millennial housing mismatch, she’s not as pessimistic about the sell-off as a whole.“The Baby Boomers are a large generation,” she says. “Nothing they do is going to happen en masse.” She also believes that the Boomers who don’t age in place will demand an increasing array of housing options that will help spread out sales over time, decreasing the likelihood of a sudden glut of housing.

Read full article here:

https://www.citylab.com/housing/2017/04/who-will-buy-baby-boomers-homes/522912/

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Posted by on Apr 16, 2017 in Boomer Liquidations, Boomers, Jim's Take on the Market, Market Conditions | 1 comment

Leaving Town

Interesting that San Diego County is mentioned as an area to which  people are moving! Hat tip to JT for sending this in:

http://www.latimes.com/business/la-fi-leaving-socal-20170414-story.html

Excerpts:

Huntington Beach residents Chris Birtwistle and Allison Naitmazi were about to get married and decided it was time to buy a home.

They wanted to stay in the area but couldn’t find a house they both liked and could reasonably afford — despite a dual income of around $150,000.

So they decided to go inland — all the way to Arizona, where they recently opened escrow on a $240,000 four-bedroom house with a pool, just outside Phoenix. Their monthly mortgage payment will be about $500 less than what they paid for a two-bedroom apartment in the Orange County beach community.

“The only hesitation was [leaving] the great weather,” the 31-year old Birtwistle said. “But we talked about what we can get here and what we can get there for the same price and that was a no brainer.”

Moves out of the area remain far below levels seen during last decade’s housing bubble, when out-migration was nearly triple what it was in 2016 — and real estate agents urged clients to “drive until you qualify.”

But after slowing down in the aftermath of the Great Recession, which devastated the housing market, out-migration is picking up as prices climb steadily higher, according to U.S. Census Bureau data.

To escape high prices, people — often younger and with lower- or middle-class incomes — are looking toward the Inland Empire and nearby states for additional square footage and a lower mortgage payment.

“[Migration] is settling back into longer-term patterns,” said Jed Kolko, chief economist with employment website Indeed.com who analyzed the data.

Others were more blunt.

“The impact is to create an auction situation between the haves and the have-nots,” Christopher Thornberg, founding partner of Beacon Economics, said of the housing shortage. “And the have-nots have to move away.”

Read full article here:

http://www.latimes.com/business/la-fi-leaving-socal-20170414-story.html

Posted by on Apr 14, 2017 in Jim's Take on the Market, Market Conditions | 4 comments