by Jim the Realtor | Dec 10, 2023 | 2024, Market Buzz, Market Conditions, Spring Kick |
Mortgage rates have come down 1% in the last few weeks, and the casual observers are hoping it means that the Big Turnaround will commence in the Spring of 2024.
But for a full-fledged frenzy to break out, home prices would have to drop too.
We’ll never learn much from the median sales prices by themselves. But the SP:LP ratios demonstrate the off-season trend of buyers driving harder bargains, which is the solution for lower prices too.
We’re probably not going to see the whole market drop in price (i.e., big dips in the median sales prices) because the superior properties should hold their value better with the impatient buyers.
But those who don’t need the perfect house will likely have better luck next year with getting a deal. We only flirted with an over-list frenzy briefly this year, and in 2024 we not see many, if any, 100% months.
by Jim the Realtor | Nov 10, 2023 | Market Conditions, Sales and Price Check
Having 2,218 new detached and attached listings in a county of 3.3 million people is anemic. There were 4,198 new listings in October, 2019.
But it doesn’t look like we need any more – those on the market aren’t selling like before. In fact, the unsolds are starting to stack up now, which is the #1 fear for sellers:
It’s showing here too:
These are the more typical market pressures we would see in a normalizing market. The sellers are losing some of their pricing power, and buyers think that most of the current offerings just aren’t worth it.
by Jim the Realtor | Sep 28, 2023 | Market Conditions, Tips, Advice & Links |
Currently buyers are having to pay 2x or 3x the previous bill for homeowners insurance, due to the lack of options because the big insurance companies have stopped writing policies in California. Some are blaming climate change, and guys like Carl Demaio are blaming Biden, but with a little digging it looks like the insurance-companies requests to raise premiums have been stalled for years. California’s average home insurance rate is $1,225 per year for $250,000 in dwelling coverage is about 14% lower than the US average, according to Bankrate. The thought of insurance premiums being 30% higher sure sounds better than 2x or 3x!
Full story from the LAT:
After a summer that saw many of California’s top home insurers pull back from the state market, Insurance Commissioner Ricardo Lara announced Thursday that he struck a deal with the insurance industry to encourage new coverage in the state.
Insurers, Lara said, agreed to return to the high-risk fire zones in the state in exchange for a number of concessions that will make it easier, in theory, for them to get higher rate increases through the state regulator more quickly. The announcement comes the week after negotiations in Sacramento over a legislative response to the home insurance market fell apart.
Gov. Gavin Newsom also issued an executive order on Thursday afternoon commanding the insurance commissioner to “take prompt regulatory action to strengthen and stabilize California’s marketplace” and consider whether emergency action could be necessary.
The changes are slated to go into effect by the end of 2024, but the hope is that insurers will return to writing new homeowners policies in California sooner. Leading insurers such as State Farm, USAA and Allstate all have requests for rate increases pending with the state insurance department, and are requesting hikes of 28.1 percent, 30.6 percent and 39.6 percent, respectively.
If approved, each company would be allowed to raise its total premiums in the state by that amount, but the rate increase can be distributed differently among homeowners: a cabin in the woods might see a 200 percent jump while a home in San Francisco could see little to no change.
(more…)
by Jim the Realtor | Sep 27, 2023 | Market Conditions
When selling, it’s smart to make your home appear to be pet-friendly!
Proximity to good schools has long been a deciding factor for home buyers. An increasing number of house shoppers, however, are looking for schools that specialize in fetching rather than phonics.
Pets, according to real estate agents and industry officials, cannot be ignored when their owners shop for a home. “We sell houses, you make them homes,” said Creig Northrop, of Northrop Realty in Clarksville, Md. “Pets are part of a family.”
As the number of households with children decline and those with pets rise, pet-friendly homes and neighborhoods are in demand. Households with children younger than 18 dropped from 48 percent of the market in 2002 to 40 percent in 2022, according to Jessica Lautz, deputy chief economist and vice president of research at the National Association of Realtors. Families with pets have increased from 56 percent in 1988 to 70 percent in 2022, according to NAR research.
Research by real estate giant Zillow confirmed the effect of the pandemic on pet ownership. It found nearly three-fourths of home buyers and 57 percent of renters in 2021 reported owning one pet, said Amanda Pendleton, Zillow’s home trends expert, up from 64 percent of buyers and 51 percent of renters a year earlier.
“One of those things moving up in importance is walkability, having a place that someone can easily pop outside and walk a dog, important proximity to the vet and dog parks [are] also important because you want to easily be able to take care of anything that your pet may need,” Lautz said. “And those things do come up, and you may not want to put your large dog into the car.”
The American Kennel Club advises house hunters looking for a dog-friendly neighborhood to visit the area early in the morning, while dogs are out with owners for pre-work walks. “Take a look at the breeds, along with their overall well-being,’’ it suggests. “A neighborhood with a variety of breeds speaks to a general dog-savvy population.” Another key, the AKC said, is looking for neighborhood businesses that offer water bowls or a bowl of treats.
Americans are spending more on their pets than ever: $136.8 billion on their companions in 2022, up from $90.5 billion in 2018, according to the APPA.
https://www.washingtonpost.com/business/2023/09/21/home-buying-pets/
by Jim the Realtor | Sep 11, 2023 | Local Flavor, Market Conditions |
Homeowners in San Diego are the least likely sellers in the country to lose money if they put their house on the market, according to a new study.
The study, which was conducted by the real estate company Redfin, analyzed real estate data from 50 of the most populous metro areas in the U.S. to get a sense of current market trends.
San Diego had the lowest share of homes sold at a loss — only 1.1%, the study found — over a three-month period that ended in July 2023. Nationwide, the share of homes sold for less money than they were purchased was around 3%.
San Diego is one of the most competitive and expensive real estate markets in the country, according to Redfin, with most homes selling within 12 days of their listing this year.
This year so far, over 5,500 homes have been sold in the San Diego metro area. The average sale for these homes comes in around $901,000 — up 3% from last year — and more than half are sold above asking price.
https://fox5sandiego.com/news/business/san-diego-homeowners-are-the-least-likely-to-sell-homes-at-loss-in-the-nation-study/
by Jim the Realtor | Sep 6, 2023 | Forecasts, Jim's Take on the Market, Market Conditions, The Future |
An article published yesterday included some guesses about the future of the real estate market over the next five years. For those who thought it would be the usual expert opinions touting 3% appreciation per year, you won’t be disappointed, though Larry did throw in a possible 10% decline in California:
Yun foresees no major changes in purchase price tags on a nationwide level next year, with fluctuations of only about 5 percent one way or the other. The only exception is California, he says, where the market could see 10 percent declines: “Because it’s so expensive, California is always the most vulnerable to changes in interest rates.” This scenario is already playing out in the priciest areas in the state: For example, San Francisco median home prices are down 9.71 percent since last year, according to Redfin data. Overall, in five years, Yun expects prices to have appreciated a total of 15–25 percent.
McBride predicts home prices will average low- to mid-single-digit annual appreciation over the next five years. This rate of appreciation, he says, is consistent with the long-term average of home prices increasing by a rate that hovers a percentage point above the inflation rate.
https://finance.yahoo.com/news/housing-market-predictions-forecast-next-175441472.html
I think the North San Diego County coastal region will perform much better for the following reasons:
- Baby boomers aren’t dying fast enough. The capital-gains tax for long-time homeowners is so burdensome that heirs to the estate will insist on their elders aging-in-place, or renting out the home if their elder goes into a senior facility. This will prevent any concentrations of boomer liquidations, and sprinkle them over the next 20-25 years – keeping inventories low. (Half of boomers are still working!)
- The dollar continues to devalue – money isn’t worth what it used to be.
- San Diego is a premier destination spot for rich people. The affluent who tire of deteriorating conditions in their current town will be happy to join us – and pay whatever it takes.
The demand will stay strong and the inventory extremely tight. The realtor and lender populations will get cut in half (at least) and the fascinations about the real estate market will continue – but for almost everybody it will be from the sidelines.
The local Case-Shiller Index has risen 54% since March 2020.
I think we will see another +50% in the next five years, and in 2028 there won’t be a month when we have 100+ sales of detached homes between La Jolla and Carlsbad.
What do you think?
by Jim the Realtor | Aug 23, 2023 | 2023, Boomers, Market Conditions, Where to Move
Unless you are among the very affluent, you need to move out-of-state to make it worth selling your home in San Diego. If that looks inevitable, do it while you are younger and can handle the challenge! Start by going through your stuff – your kids don’t want it and will dump most everything you leave behind.
While the median distance moved in the 2022 Profile of Home Buyers and Sellers was 50 miles, one-quarter of buyers traveled over 470 miles to find their new home. Traditionally, buyers have stayed close to their past homes. From 1989 to 2021, the median distance moved was just 10 to 15 miles.
Based on this generational trend, it is not surprising that those who moved more than 470 miles from their past residence were more likely to be repeat home buyers. Just 11% were first-time buyers. This dispels one potential myth that has abounded in the last year: that first-time buyers are the ones making the move to find their first property far from their rental unit. It does happen, but it is more likely a repeat buyer who is making the distance move.
https://www.nar.realtor/blogs/economists-outlook/long-distance-movers-why-did-they-move-and-how
by Jim the Realtor | Aug 22, 2023 | Market Buzz, Market Conditions, Market Surge
Could rates get so high that it turns into a cash-only market? It’s heading that way.
Of the 118 closings this month between La Jolla and Carlsbad, 45% were all-cash, and it’s competitive. My buyers made a cash offer that was $101,000 over list on this one and didn’t make the final round. There were 13 offers.
Interest rates are based on trading levels in the bond market. Bond traders began their day looking at significantly weaker levels (i.e. higher yields/rates) versus last Friday, but for no apparent reason. Actually, it would be more fair to say “for no new reason.”
Reasons for the rising rate momentum are apparent and ongoing. Decades-high inflation required decades-high rates to fix. The higher rates are supposed to be damaging the economy more than they have. Until that damage shows up, rates have a green light to continue higher.
As more and more market participants abandon their preconceived notions regarding an imminent rate reversal, the upward momentum takes on a certain glacial quality. In other words, it’s self-sustaining, often resulting in days like today where rates look like they’re acting on some obvious catalyst despite the absence of any such news.
Mortgage rates were already new 7.4% by the end of last week and today’s increases bring the average lender closer to 7.5%. This is the highest since late 2000. Lower rates are still available for certain scenarios and discount points, but many scenarios are also seeing higher rates.
Link to Mortgage News Daily
by Jim the Realtor | Aug 18, 2023 | Graphs of Market Indicators, Local Flavor, Local Government, Market Conditions |
They expect another 200,000 homes to be built in SD County? Where? MCAS Miramar?
San Diego officials are expecting an end to the region’s perpetual growth.
Driving the news: San Diego’s population is expected to peak in 2042, and then decline by about 100,000 people by 2060, according to the latest regional forecast by the San Diego Association of Governments.
- Ray Major, SANDAG’s chief economist, told the agency’s board last month this is the first regional forecast expecting a population decline.
- “Every other forecast has had huge increases, with the San Diego region growing to 4 million people by 2050 … Now we’re looking at 3.4 million.”
Why it matters: The forecast carries planning implications for major, taxpayer-funded resources like housing, transportation infrastructure, water and energy.
By the numbers: San Diego’s growth machine has been slowing for decades.
- The region grew by 1 million people from 1980 to 2000. But in the last 20 years, San Diego added half that.
- Planners now forecast just 140,000 new San Diegans over the next two decades.
- That’s when the region’s population is expected to peak. By 2060 the region is expected to have just 40,000 more people than it has today.
Between the lines: The region’s death rate is increasing, its birth rate is decreasing, and migration is flat.
- One in 10 San Diego residents were over 65 in 2000. By 2060, that’ll be one in four residents.
- That aging population will demand different government services and have different transportation and housing needs, said Cynthia Burke, SANDAG’s senior director of data science.
- “Our parks are going to need more pickleball courts and fewer play structures,” she said during the July board meeting.
Read full article here:
https://www.axios.com/local/san-diego/2023/08/14/san-diego-population-decline-forecast
by Jim the Realtor | Aug 7, 2023 | Market Conditions |
Rob did a great blog post on the real cause of the crazy home-value appreciation:
Link to full article
