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Category Archive: ‘Market Conditions’

House-Price Torpedos

Their agents are telling buyers to wait…but wait for what? Wait how long? Wait for who?  It’s irresponsible to make such casual comments.

Not mentioned in this article is that a good agent can overcome all these obstacles, and a bad agent makes them worse:

Posted by on Aug 1, 2015 in Jim's Take on the Market, Market Conditions, Thinking of Selling?, Why You Should List With Jim | 2 comments

Pending Sales Drop

Realtor Conference Lawrence Yun 007

It seems the inventory is so picked over that the remaining would-be sellers need to lower their price to get in the game – but Yunnie won’t ever say it outright.  At least he didn’t blame it on tight credit this time.  From HW:


An excerpt:

Lawrence Yun, NAR chief economist, says although pending sales decreased in June, the overall trend in recent months supports a solid pace of home sales this summer.

“Competition for existing houses on the market remained stiff last month, as low inventories in many markets reduced choices and pushed prices above some buyers’ comfort level,” he said. “The demand is there for more sales, but the determining factor will be whether or not some of these buyers decide to hold off even longer until supply improves and price growth slows.”

According to Yun, existing-home sales are up considerably compared to a year ago despite the share of first-time buyers only modestly improving. The reason is that the boost in sales is mostly coming from pent-up sellers realizing their equity gains from recent years.

“Strong price appreciation and an improving economy is finally giving some homeowners the incentive and financial capability to sell and trade up or down,” Yun said. “Unfortunately, because nearly all of these sellers are likely buying another home, there isn’t a net increase in inventory. A combination of homebuilders ramping up construction and even more homeowners listing their properties on the market is needed to tame price growth and give all buyers more options.”

Posted by on Jul 29, 2015 in Jim's Take on the Market, Market Conditions | 0 comments


Recently we’ve wondered how many first-timers are participating, but actual data has been scant. D.R. Horton says that 41% of their buyers are first-timers, which is probably similar to the resale market and sounds fairly healthy:


Here are the current market conditions through the eyes of D.R. Horton:


Check their #3 point. Entry-level sales are growing because the builders are getting better at devising new products for first-timers.

Posted by on Jul 28, 2015 in Graphs of Market Indicators, Jim's Take on the Market, Market Conditions | 0 comments

Suspicious Comps

The comps haven’t mattered much during our frenzied market.  But with things settling down a bit, we might see comps matter more.

In March, we discussed who pays more than they should, and why:

Today, let’s point out which comps are the most suspicious.  Both sellers and buyers should proceed with caution when using these comps:

1.  Sales prices above list prices.  Bidding wars have been the norm, but the eventual sales price was thrown out there by somebody who was trying to win the contest, not pay market value.  They probably waived the appraisal contingency too, so there aren’t any checks and balances in place.  Just because one crazy nut was willing to pay that price doesn’t mean there will be others willing to do the same.

2.  ‘Sold before processing’.  How can it be considered market value if the market never had a say?  Rarely do they have a full description or ample photos so you don’t even know what was sold, or why.  Sometimes these are high-priced, where you wonder if the seller and listing agent thought they’d never get the same price on the open market.  But usually they are lower-priced.

3.  Dual agency.  When the seller’s agent represents the buyers too, how do you know what happened at the moment of impact?  Be wary of those that closed for a deep discount under list.

4.  Long-timers.  Have you seen those properties that have been on the market for months without lowering their price, then all of a sudden they sell for full price, or close?  Sure, the market can come up to meet them, but it just smells fishy to me that buyers wouldn’t demand to pay less for a property nobody else wanted for months.

5.  Comps that went pending when hottest (Jan-April 2015).  Today’s market is still good, but for the rest of 2015 it won’t be sizzling like it was when rates were 3.67 – 3.77% earlier this year.  Buyers are going to want to pay a little less than before to compensate.

6. Weak buyer’s agent on the sale.  Inexperienced or desperate agents don’t stop their buyer from over-paying.  The inexperienced agents are usually unaware themselves.  The tricky ones are the big teams who just use the leader’s name on every sale – but you suspect it was an assistant who handled the sale.

Tip of the Day: Examine the photos from the buyer’s perspective.

Buyers have never relied less on their agent – they have all the comps at their disposal, and they will interpret as they see fit.  Your accuracy about the comps is only half the battle – understanding the buyers’ position and how to add value to their interpretation is essential too.

Get Good Help!

Call Jim!

Posted by on Jul 13, 2015 in Jim's Take on the Market, Listing Agent Practices, Market Buzz, Market Conditions, Why You Should Hire Jim as your Buyer's Agent, Why You Should List With Jim | 1 comment

NSDCC Months’ of Inventory

foot traffic

These guys are making the pitch for why potential sellers should list their home (with Jim) and sell now, using NAR stats that show foot traffic is up, and inventory is down:

Historically its been said that six months’ worth of inventory is ‘normal’ and demonstrates a healthy market.  But it doesn’t take into consideration the buyers’ behavior in a tight-inventory environment, and how the internet has supercharged the dissemination of new listings.

I’d say about 3 months of inventory would indicate a healthy market today.

Let’s break it down by price range too, because different segments are hotter.

NSDCC Detached-Home Inventory:

Price Range
# of Active Listings
# Sold in June
A/S = Months’ of Inventory
$2.4M and up

Sellers can adjust accordingly – the lower your price point, the more likely you will be able to sell for retail, or retail-plus. If you are in the upper region, you should undercut the competing listings nearby because, well, how should we say it, your market is bloated-plus.

Get Good Help!

Posted by on Jul 8, 2015 in Jim's Take on the Market, Market Buzz, Market Conditions, North County Coastal, Sales and Price Check | 0 comments

Website Traffic Up

A fluff piece attempting to reveal something interesting, but they just want you to know that traffic at has been growing since NewsCorp started advertising it:

Summer is officially here, and just like the heat waves sweeping through much of the country, the real estate market shows no sign of cooling off any time soon, according to a preliminary analysis of June data for®.

“Our early read of real estate trends in June suggests good news ahead for the U.S. residential real estate market, especially in the hottest markets with healthy growth in supply,” said our chief economist, Jonathan Smoke, who conducted the analysis.

Based on data for the first three weeks of June, the median list price increased to $233,000, up 7% year over year and 2% over May. Median days on market is still at 66 days, down 7% year over year and flat month over month. Helping create more opportunities for buyers, the listings inventory is now growing faster, at 4% over May but still down over last year.

More and more Americans are spending time searching for the perfect home, our data show. On, traffic and searches continue to set new highs in June, Smoke said. Unique users for the month are now on pace for at least 40% growth year over year, he found, while visits and searches are expected to be up more than 50% and 30%, respectively.

June 2015

Posted by on Jun 30, 2015 in Jim's Take on the Market, Market Conditions | 3 comments

Shiller on Housing

Shiller discussing who should buy a house – those who have stable employment!

Robert Shiller, an economist at Yale, won a Nobel Prize in 2013 for his analysis of asset prices, and his name is half of the much-watched Case-Shiller Index of housing prices. It turns out, he’s not too enthusiastic about home ownership, either as a lifestyle choice or an investment. Buying a house is “like a consumption choice, it’s not really an investment,” he tells Money magazine’s Susie Poppick in the video below.

Posted by on Jun 29, 2015 in Market Conditions | 4 comments

Underpricing on Purpose


Bravo’s reality show “Million Dollar Listing San Francisco” debuts July 8, but I already have an idea for a spinoff — “Million Dollar Over Listing.” It would feature homes in the Bay Area that sold for at least $1 million more than the list price.

There were at least 10 such sales in San Francisco over the past year, 14 in Santa Clara County and five in San Mateo County, according to Multiple Listing Service data. They ranged from teardowns to mansions.

A home at 178 Sea Cliff Ave. in San Francisco, for example, sold in April for $11 million, which was $4.7 million or 75 percent over the $6,298,000 list price.

Patrick Carlisle, chief market analyst with Paragon Real Estate Group, chalks it up to the “general insanity of the overheated market,” which stems mainly from demand outstripping a long period of below-average inventory. In addition, “many agents have adopted a strategy of egregious underpricing,” he said.

In San Francisco especially, underpricing is so prevalent that most buyers search for homes well below their target price, knowing the sale price will be much higher.

“If you price (a home) where it should be, it will sit,” said Realtor Alan Canas.

Canas represented the sellers of a home at 44 Everson St. in San Francisco’s Glen Park neighborhood. The four-bedroom, four-bathroom home was somewhat dated but had magnificent views, which were hard to value.

Canas priced it at $1.8 million in October, expecting it would sell for $2.3 million to $2.4 million.

“The offers we received, it was shocking,” he said. He made counter offers to the two highest — $2.65 million and $2.725 million — asking them to come up to $2.8 million. “One jumped, the other jumped too late,” he said.

What if he had listed it closer to his expected price? “If we had priced it at $2.2 million, I honestly don’t think it would have seen the play (it got) at $1.8 million,” Canas said. “It’s psychological, almost a game.”

The top two offers were both all cash, which is good because if the buyer had needed a loan, “I don’t think it would ever appraise at $2.8 million,” he said.

Read full article here:

Posted by on Jun 25, 2015 in Bidding Wars, Jim's Take on the Market, Listing Agent Practices, Market Buzz, Market Conditions | 0 comments