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Category Archive: ‘Market Conditions’

Chinese Boost Sales

Excerpts from this article in the latimes.com:

http://www.latimes.com/business/la-fi-chinese-homebuyers-20140324,0,2832012,full.story#axzz2wnzTJbz1

The overflow from China’s economic high tide is transforming the housing  markets of suburban Los Angeles.

lennarAffluent Chinese home buyers are driving prices past boom-era peaks, spawning  a subset of property brokers and mortgage lenders that cater to their distinct  needs — and even dictate design details in new subdivisions.

Chinese buyers bought 12% of all U.S. homes purchased by foreign citizens  last year, up from 5% in 2007, according to the National Assn. of Realtors. More  than half their home purchases were in California. And more than two-thirds of  them paid cash, the trade group said.

The trend appears unlikely to unwind soon. More than 60% of China’s wealthy  have left or plan to leave the country, at least part time, and their No. 1  destination is the United States, according to the Hurun Report, a Shanghai  publishing firm focused on recently minted millionaires and billionaires.

Despite dizzying ups and downs in U.S. home prices, the market can seem more  stable than in China, where fears of a property bubble have added to the  economic and political worries of the burgeoning middle and upper classes.

Eva Chen and her husband travel between their homes in Shanghai and Arcadia,  where they purchased a property near Santa Anita Park in October. They scooped  up the second home as an escape from pollution and a shot at better schools for  their two infants.

Compared with housing prices in China, the $1.27-million Arcadia property  didn’t seem expensive.

“The Arcadia house is cheaper,” Chen said.

Others want the prestige of a San Marino or Pasadena mansion, even if paying  for it means working in China and rarely visiting. One of Ng’s neighbors bought  a Pasadena estate, then lived there for just two days out of the two years that  followed.

“He was not renting it out,” Ng said. “People have so much money, they just  say, ‘What the heck. It’s a nice neighborhood. I might as well just buy  one.’”

It’s a story echoed by Patti Hahn of Arcadia, gesturing to the house next  door, which sold for $2.45 million last year, up from $1.55 million in 2006, the  last time it changed hands.

“No one lives there,” Hahn said.

In Las Vegas, which has a long-established community of ethnic Chinese  residents, as well as the allure of gambling and inexpensive housing, Lennar  went a step further when it developed a 40-acre housing tract, Lantern Gardens,  on the outskirts of town.

In addition to applying feng shui design principles and interior apartments  for relatives, Lennar designed a central park that is round instead of square  and aligned most of the homes on a north-south axis, reflecting the preferences  of many Chinese.

“The traffic coming through was principally Asian, and mostly Chinese,” said  Jeremy Parness, the company’s division president for the area.

The company has even taken care to avoid putting the number four in any  address, because it rhymes with the Chinese word for death, Parness said.

Read the whole story here, with great comments too:

http://www.latimes.com/business/la-fi-chinese-homebuyers-20140324,0,2832012,full.story#axzz2wnzTJbz1

Posted by on Mar 24, 2014 in Local Flavor, Market Buzz, Market Conditions | 1 comment

Feb. Sales – Glass Half Full

jim at last year's frenzyIt was noted in the media this week that February homes sales were the at the lowest count in 18 months – yes, a frenzy will do that to you!

http://www.cnbc.com/id/101511116

Sales are going to be ‘sputtery’, and struggle to keep up with previous frenzied months when prices rise sharply.  When prices and rates both rise substantially, you’d think it would put a real damper on sales – but around NSDCC they have held up remarkably well:

NSDCC Detached-Home Sales

Year
Jan. Sales
Feb. Sales
Jan. Avg $/sf
Feb. Avg $/sf
2005
206
184
$500/sf
$480/sf
2006
169
189
$559/sf
$519/sf
2007
157
155
$489/sf
$482/sf
2008
115
131
$474/sf
$485/sf
2009
114
105
$419/sf
$370/sf
2010
137
143
$368/sf
$376/sf
2011
149
166
$366/sf
$377/sf
2012
155
184
$374/sf
$358/sf
2013
185
187
$379/sf
$400/sf
2014
181
176
$498/sf
$483/sf

Let’s remember that these are completely different sets of buyers and houses.  The recent consistency, and resiliency, is remarkable!

P.S. The preliminary numbers for this month look much lower than last year (we had 298 sales in March, 2013, which was 25% higher than in 2012).

This will probably continue for the next few months – any comparison to the max-frenzy months of 2013 is going to look dismal.  But the sky isn’t falling, and price will fix anything.  Get good help!

Posted by on Mar 22, 2014 in Market Buzz, Market Conditions, North County Coastal, Sales and Price Check | 1 comment

Spring Surge of Inventory?

homesweethomwThe guy in the video below expects a surge of inventory this spring because of higher prices.

But it’s not happening yet.

Here are the NSDCC detached-home listings that hit the market between Feb. 15 and March 15 (and 2012 had one extra day due to leap year):

Year
# of New Listings
LP Avg $/sf
2012
435
$425/sf
2013
443
$474/sf
2014
400
$551/sf

Greed and money are apparently taking a backseat to the utility value of a home, the comfort and convenience of not moving, and the weather!

Posted by on Mar 20, 2014 in Inventory, Market Conditions | 1 comment

Pocket/Off-MLS Sales

PocketIn a world accustomed to shock and awe, it seems that all media outlets feel the need to bolster their headlines to grab more eyeballs.

The I-News is no exception:

http://www.inman.com/2014/03/10/study-suggests-mls-played-little-or-no-role-in-nearly-half-of-2013-home-sales/#

Their comment section dissects the article pretty well, so let’s go straight to checking the sales in our own market.

The MLS and the tax rolls limit how many records you can search, so here is a comparison of NSDCC closed sales for the first two months of 2014:

Sales of SFRs, condos, and PUDs on tax rolls: 629

Detached and attached-home sales in MLS: 576

Percentage of sales in the MLS: 92%

You would think that sellers would insist on exposing their home to the maximum number of buyers.  But there are always going to be non-MLS sales that occur for various reasons, including new homes, for-sale-by-owners, homes sold to occupying tenants and/or family members, plus investors and flippers.

Off-market sales create a sexy headline, but around here the vast majority of sellers want open-market exposure, via the MLS.

Posted by on Mar 18, 2014 in Listing Agent Practices, Market Conditions | 0 comments

Mortgage Fraud

FBI-logoLast summer I met with an FBI agent to discuss a local realtor. I submitted 32 pages of conclusive evidence that implicated the realtor in committing 19 cases of short-sale fraud.

Though the agent said he would pursue it, I never heard from the FBI again.

Hat tip to daytrip for sending in this article from the nytimes.com:

http://www.nytimes.com/2014/03/16/business/a-loan-fraud-war-thats-short-on-combat.html?ref=business&_r=0

Two excerpts:

“The I.G. report confirmed what’s been clear for quite a while — that the D.O.J. has never taken mortgage fraud seriously,” Professor Levitin said. “There is going to be no comeuppance for crimes committed during the financial crisis. This sets a really bad precedent for future crises because we’re seeing that there is going to be no deterrent effect of criminal law.”

“The report fits a pattern that is scary for a democracy, that there really are two levels of justice in this country, one for the people with power and money and one for everyone else. And that eats at the heart of what I think makes this country great.”

Posted by on Mar 17, 2014 in Fraud, Market Conditions, Mortgage News, Scams | 7 comments

Frenzy – It’s Baaaack

Can you feel it?  The frenzy, creeping in on you?

Those watching closely may have noticed how the market has ’picked up’ over the last week or two.

We’ve had more buyers than sellers for a while now, so that alone doesn’t constitute a frenzy.  In a low-inventory environment, you should have multiple offers on every quality property.

It’s the velocity.

Here are signs of frenzy-building:

1.  It’s been hot.  A year ago, the frenzy was just becoming obvious – but at this point, the market has been hot for the 18 months.

Both buyers and sellers are expecting a frenzy now.

NSDCC Feb.
#Sales
Median SP
Median DOM
2011
166
$844,000
60
2012
184
$795,000
69
2013
184
$900,000
25
2014
172
$906,500
24

All three indicators from last month are pointing to more frenzy.

2.  How fast listings go pending.  With listing agents riding high on their horse, you typically see them play around for 7-10 days before a new listing gets marked pending.  It seems like more listings are going pending faster – and it’s about the same as last year (though this year’s haven’t all closed):

NSDCC 2/22 to 3/7
# Pendings with DOM<6
# New Pendings
%
2013
42
136
31%
2014
35
119
29%

3.  The percentage-paid-over-list-price.  It’s been standard to see homes sell for 5% to 10% over list price, but it can get crazier.

This was a fascinating – though extreme – example.  A great-looking house with fantastic view, but it is right on La Costa Ave. and located in an area with terrible soil quality:

http://www.sdlookup.com/MLS-140009811-2662_Galicia_Way_Carlsbad_CA_92009

Look how steep the hill is – it looks like it could slide down the hill any day:gal

From the remarks: This property is for cash buyer, builder, or investor. Home has compaction and soil issues. Only shown to qualified buyers.

The soils problem must be serious, given their initial list price of $500,000.  Yet it sold for $685,000 cash, or 37% over list price and closed in ten days.

It must have been worth it to someone, and probably worth close to that for many, but it is the percentage that gets me.  With the problems, wouldn’t you try to buy it for 10% or 20% over list?

4.  It’s March.  The wait-and-see buyers haven’t had any indications of inventory flooding the street – in fact, we’ve had fewer new listings this year than last (between Jan. 1 and March 5th):

Year
# New Listings
LP Avg $/sf
2013
886
$494/sf
2014
858
$541/sf

Buyers are getting antsy – for them, there aren’t any signs of relief.

It is a great time to sell – contact Jim the Realtor to get started today!

(858) 997-3801 cell or jim@jimklinge.com.

Posted by on Mar 8, 2014 in Frenzy, Jim's Take on the Market, Market Buzz, Market Conditions, North County Coastal | 8 comments

SD Markets in Tiers

Rich Toscano does a nice job dissecting the San Diego markets, and explaining the differences.  An excerpt, plus one of five graphs from the VOSD:

http://voiceofsandiego.org/2014/03/06/cheaper-homes-still-rebounding-fastest/

Cheaper homes have done a lot better in the rebound, but they also suffered far worse during the crash. Here’s what happens when we start the graph at the bubble peak:

dec_2013_case_shiller-2

Read full article here, and donate if you can!

http://voiceofsandiego.org/2014/03/06/cheaper-homes-still-rebounding-fastest/

Posted by on Mar 7, 2014 in Frenzy, Market Conditions | 3 comments

More on Rich-Man’s Game

From the NAHB:

http://eyeonhousing.org/2014/02/25/why-are-new-homes-getting-so-big-look-at-whos-buying-them/

Preliminary data provided to NAHB by the Census Bureau on the characteristics of homes started in 2013 show the trend toward larger homes continued unabated last year, as did the share of new homes with 4+ bedrooms, 3+ full baths, 2-stories, or 3-car garages.

The average size of new homes started in 2013 was 2,679 square feet, about 150 square feet larger than in 2012 and the fourth consecutive annual increase since bottoming out at 2,362 square feet in 2009.

New homes started in 2013 were also more likely to have additional features: nearly half, 48%, had 4 or more bedrooms; 35% had 3 or more full bathrooms; 22% had a garage for at least 3 cars; and 60% were 2-stories.

The share of new homes started with these features has been increasing consistently for 3 or 4 years, and the most obvious question is “why?” Why are homes getting this BIG?


To get an answer, just take a look at WHO is buying new homes?

Read More

Posted by on Mar 6, 2014 in Market Conditions | 6 comments