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An Insider's Guide to North San Diego County's Coastal Real Estate
Jim Klinge, broker-associate
858-997-3801
klingerealty@gmail.com
Compass
617 Saxony Place, Suite 101
Encinitas, CA 92024
Klinge Realty
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Are you looking for an experienced agent to help you buy or sell a home? Contact Jim the Realtor!

Jim Klinge
Cell/Text: (858) 997-3801
klingerealty@gmail.com
701 Palomar Airport Road, Suite 300
Carlsbad, CA 92011


Category Archive: ‘The Future’

Real Estate Class Action Lawsuit

While we’re on how NAR and others have failed us, let’s mention the latest class-action lawsuit:

Link to Notorious Rob article Link to HW

Buyer-agents are heralding this as the Big Turning Point is real estate because the lawsuit aims to ‘break up the cartel’ and unbundle real estate commissions.

There is a whole legion of agents that offer a fee-for-service menu who think they are doing the consumer a favor. But it is a great dis-service to tempt consumers to select their agent based on their fee.  This is where NAR and others have failed us miserably because nobody talks about how important it is for consumers to identify the skill level of agents they are considering.

Agents offer a discounted commission/rebate/fee-for-service because they don’t have the skill level to earn a higher fee.  In effect, they ‘buy the business’ with lower cost/less service, and the consumer gets what they pay for.

But if this lawsuit prevails, causing MLS companies to be run out of business and ‘broker cooperation’ to get dismantled (seller paying the buyer-agent fee), the buyer agents will be the first casualty.

On this blog we talk about street-level impact.

Here’s an example that happened to Kayla in Manhattan, where the rental market is so hot that tenants have to pay their broker directly – and the typical fee is two months of rent.

Kayla is showing rentals to her old college roommate plus one other woman.  The listing agent is present, and when Kayla goes into a bedroom with one of the women, the listing broker pulls the other aside and says, ‘if you don’t want to pay Kayla’s fee, just go through me directly’.

The two women rented the apartment directly through the listing agent, and burned Kayla.

We’re sliding into single agency, where buyers/tenants will just go directly to the listing agent.  They will never know if they saved any money, they won’t know if they got proper representation (unlikely), and they will just take what they get.

The reason disintermediation worked in the travel business because consumers don’t worry about a bad vacation costing them an additional five- or six-figures in resale costs (and major disruption of life) to unwind one.

Without constant reminders of how important it is to Get Good Help, buyers will be left to their own devices and just go directly to the guy who has the product – the listing agent.

Single agency is not what’s best for consumers or agents – yet the market forces are heading in that direction without recognizing the ramifications.  Watch what you wish for!

Obviously, my rantings on this topic have done nothing to slow down the trend, so joining Compass was the best way to position myself for my clients.

Posted by on Mar 13, 2019 in Compass, Jim's Take on the Market, Realtor, Scams, The Future | 0 comments

Compass Search Portal

The real estate industry has never felt the need to create a powerful search portal in response to Zillow.  There should have been an industry-wide effort to create a realtor-centric website to support our business, but NAR and others just shrugged it off.

Traditional realtors should be demonstrating why our experience, our advice, and our gravitas is a better solution for consumers.

It starts with realtors having the best real estate search portal – and Compass has committed to producing it!  Our website will make it clear who the actual listing agent is on each listing, regardless of company.

There is another benefit – we put our Coming Soon listings in the front of the search, which will hopefully cause consumers to keep coming back, and help build the traffic faster.

From our CEO:

The future of the real estate industry will be defined by the company that creates the best experience for buying and selling a home. I believe Compass is going to be that company. To achieve our mission of helping everyone find their place in the world, we must make it as simple and straightforward as possible for people to navigate the process of buying and selling a home. We must also put the person who knows how to create a world-class customer experience front and center: the agent.

Many technology companies are doing the exact opposite. They’re confusing consumers and taking advantage of agents in order to maximize their own profits. They most commonly do this by hiding the true listing agent and monetizing the client lead in a variety of ways.

At Compass, we are not just looking to elevate ourselves, we are looking to elevate the industry. Being the first company to show the true listing agent on every listing will not only help bring clarity to the home-buying process, but it is the right thing to do.

It is part of a 3-step strategy to win the consumer:

  1. Make the Compass website and mobile app just as good as the best aggregators by end of summer 2019
  2. Invest millions of dollars advertising our Coming Soon inventory to consumers around the country
  3. Put the listing agent on every listing, making Compass.com the only site in the country where consumers can always find the listing agent

It means we are gently nudging consumers towards connecting with the listing agents directly, making that trend more obvious to all.  If the business is going that way anyway, we might as well be out in front of it. JtR

https://www.compass.com/

Posted by on Mar 12, 2019 in Coming Soon, Compass, Jim's Take on the Market, Realtor, The Future | 2 comments

Zillow Strategy

It’s out in the open now – Zillow intends to change the game. An excerpt from an interview with Rich Barton where he admits Zillow used agents to get big, and is now deciding how to use that power:

An excerpt from I-News:

Barton also indicated there could be major changes coming to the way that Zillow deals with agents. Thus far, Zillow has derived profits from charging agents to appear on the site, with the idea being that would-be homebuyers will find those agents and end up working with them.

But that’s changing.

Barton told Stratechery that he wants to move away from a subscription based model and toward “a success-based compensation scheme that is around what happens when consumers actually close a transaction.” That will delay Zillow’s revenue but should whittle down the number or people the company is working with and improve the consumer experience.

“It enables us to move from a system of huge floors of people dialing for dollars for advertisers, which is what’s happening right now, to a group of people where we are actually interviewing and selecting partners we think can do the best job for our collective consumers,” Barton said. “It’s a complete mindset switch in the way we are thinking about things.”

The comment appears to reference Zillow’s Premier Broker Flex Pricing program, which debuted last year.

J.D. Ross, another cofounder at Opendoor, picked up on Barton’s comments and opined that Zillow appears to be acknowledging it will ultimately displace real estate agents.

A Zillow spokesperson noted that Ross’ comment was merely his interpretation and pointed to another part of the interview where Barton discussed the importance of agents for the company’s future business. Barton described Offers as a “fast lane,” but added that most consumers will still choose a more conventional “right-hand lane.”

“So we see both of these lanes as critical because we want to serve everybody, we want to get everybody to a better place,” Barton said, referring to both Offers and the company’s agent-based business.

Posted by on Mar 7, 2019 in Jim's Take on the Market, Realtor, The Future, Zillow | 3 comments

VanBnB

It figures that more people will be sleeping in their cars, but did the city council think some would be making money on it?  Expect even more scrutiny of AirBnB, the website:

Last month, the San Diego City Council unanimously voted to stand by their repeal of an almost 36-year ordinance that prohibited residents from living in vehicles on streets within our city limits.

“And it’s now legal to crash-out anywhere [inside a vehicle] in San Diego, so it makes more sense for tourists on a budget to rent a 2-in-1,” Michael added, “and sleep by the beach.”

Last week, an Ocean Beach resident posted a collage of photos on Facebook titled: “VanBnb coming to a curb near you ….” One of the photos was of a black van that was available for $28 a night.

Michael’s buddies didn’t buy into the rent-a-van-and-sleep-inside suggestion for spring break.

“I still think it’s a great idea,” he said. “The people renting the vans or RVs on Airbnb and this so-called ‘VanBnb’ are [likely] vetted, so they shouldn’t be problematic. They should be forewarned that they might be targets of mad-doggin’ by anti-vandwellers that own property by the beaches.”

https://www.sandiegoreader.com/news/2019/mar/04/stringers-aibnb-vans-invade-san-diego-streets/

Posted by on Mar 5, 2019 in Homeless Cure, Jim's Take on the Market, The Future | 0 comments

Zillow ‘Moonshot’

Bloomberg has this article on Spence stepping down at Zillow yesterday:

https://www.bloomberg.com/news/articles/2019-02-21/zillow-ceo-rascoff-steps-down-so-barton-can-lead-moonshot-effort

Zillow must believe that flipping homes is their future:

On average, a customer asks Zillow for an offer on their home every five minutes, said Barton, signaling there’s ample consumer demand for a simplified home-selling process.

“It’s like advertising free beer at a college party,” he said.

They’re finding out that flipping isn’t as easy as it looks though.  In addition, realtors aren’t spending like they used to:

In August, the company said that it was taking longer than anticipated to sell the homes it acquires. Three months later, it reported that some advertising customers were pulling their business because they disliked changes to the platform. Shares in the company, which peaked at $65.21 in June, plummeted to a low of $27 in November.

Agents may have told Zillow that they were pulling their business because of changes in the platform, but that won’t be the end of it.  As the number of home sales decline nationally, realtors will slow or stop spending money – starting with the very expensive Zillow ads.

Zillow still says they love realtors, but we’ll see about that.  Once their advertising income declines, and the homes they bought start piling up, it is inevitable that they will think they don’t need agents any more.

The next few years are going to be exciting!

Posted by on Feb 22, 2019 in Jim's Take on the Market, The Future, Zillow | 8 comments

Instant House

With cities under pressure to provide affordable housing, it would be nice if there were ready-made buildings that a crane could drop onsite.

This is the right idea, but high-cost (probably more than most would spend).

If we could find a builder/factory that would sell them for half of this or less, I think there would be strong interest.  I’ll keep an eye out!


But this is the speed that would sell:


https://modulehousing.com/

Posted by on Feb 2, 2019 in ADU, Jim's Take on the Market, The Future | 4 comments

County Waives Fees for ADUs

We’ve talked about one-story homes – another way to add insulation from any potential downturn is to buy a property that can accommodate a granny flat. They can produce extra cash flow (the county states that they can be rented), and if you ever have to sell, there are home buyers looking to have grandma on-site rather than putting her in a senior facility at $5,000 per month.  Cities have been slow to accommodate the accessory dwelling units (ADUs), but they need to comply with low-income housing so they should come around.

Hat tip to Bryce and Nancy:

The San Diego Board of Supervisors voted to waive fees for residents building accessory units on their property Wednesday to address the county housing shortage.

These accessory dwelling units, known as “granny flats,” are described as attached or detached residential spaces to an existing property that can provide sleeping, eating, cooking, and sanitation, according to the county.

“This is a critical step in our on-going efforts to address the region’s housing crisis, especially the serious need for affordable housing,” said District 2 Supervisor Dianne Jacob. “This new program is the quickest and easiest way for us to expedite the development of housing.”

The board voted Wednesday to waive all county permit and development impact fees over the next five years with the hopes of bringing thousands of additional granny-flat homes across the county.

The previous cost of a permit for a granny flat was $1,222 plus $0.0411 per square-foot of space, according to the county’s website.

In total, residents planning to build granny flats could save an average of $14,000, according to District 5 Supervisor Jim Desmond.

In order to offset the loss of these fees, the county said it would subsidize $11 million for the five-year program.

“We will continue to be creative and challenge the status quo to solve the region’s housing crisis,” said Desmond.

The incentivized units can be used for family members or rented out as a source of income for the homeowner, the Board of Supervisors said.

To learn more about what constitutes a granny flat, go to the county’s website.

Link to Article

Posted by on Jan 10, 2019 in ADU, Jim's Take on the Market, The Future | 3 comments

Bank of Mom & Dad

How can the market keep going? Generational wealth distribution!

Among respondents with an annual income over $100,000 who anticipate familial help with a down payment, the average expected level of support is over $50,000, enough for a 20 percent down payment on the national median condo price.

This is more than twice the expected down payment assistance of those making between $50,000 and 75,000, and over ten times that of those making less than $25,000, who expect to receive $4,358 on average.

This finding highlights the chronic nature of wealth inequality — not only do lower-income millennials have less purchasing power themselves, but their families have less support to offer.

We find that when it is available, familial down payment assistance can put homeownership much closer in reach.

Among millennials earning more than $50,000 and expecting help with a down payment, we estimate that 32.8 percent will be able to acquire a 20 percent down payment within the next five years, compared to 19.8 of those with similar earnings but no expected down payment assistance.

Among those earning less than $50,000, the prospects are notably worse, but those who expect down payment help still see a significant step up compared to those expecting no help. While help from family can make homeownership a more attainable goal, this option is available to a minority of millennials, with the largest benefits accruing to those earning the highest incomes.

Link to Article

Posted by on Dec 9, 2018 in Bailout, Boomers, Jim's Take on the Market, The Future, Thinking of Buying? | 7 comments

Defective Nuclear-Waste Storage

Are you looking for one more reason to move away? 

It sounds like if/when the Big One starts shaking, you will need to grab everything you own and move to Yuma.

The Nuclear Regulatory Commission (NRC) admits in their November 28, 2018 NRC Inspection Report and Notice of Violation, every Holtec canister downloaded into the storage holes is damaged due to inadequate clearance between the canister and the divider shell in the storage hole (vault).  The NRC states canister walls are already “worn”.  This results in cracks. Once cracks start, they continue to grow through the wall.

The NRC stated Southern California Edison (and Holtec) knew about this since January 2018, but continued to load 29 canisters anyway.  Edison’s August 24, 2018 press release states they plan to finish loading mid 2019.

The NRC states Edison must stop loading canisters until this issue is resolved.  However, there is no method to inspect or repair cracking canisters and the NRC knows this.

The NRC should require all San Onofre thin-wall canisters be replaced with thick-wall transportable storage casks.  These are the only proven dry storage systems that can be inspected, maintained, repaired and monitored in a manner to prevent major radiological releases and explosions.

California state agencies should revoke San Onofre permits and withhold Decommissioning Trust Funds until these issues are resolved.

The Navy should consider revoking the San Onofre Camp Pendleton lease until Edison agrees to replace thin-wall canisters with proven thick-wall transportable storage casks.  This is a national security issue. If the NRC cannot do their job, maybe it’s time to bring in the Marines. The Navy has nuclear experts.

The current storage system puts the public at risk. Nuclear waste stored in thin-wall steel canisters (only 5/8? thick) cannot be inspected, repaired or safely transported. Thin-wall canisters crack, but technology does not exist to inspect for cracks or repair cracks once canisters are filled with highly radioactive nuclear fuel waste.

The President of Holtec has stated a through-wall crack will release millions of curies of radionuclides and it’s not practical to repair them, even if you could find the cracks.

Yet, they have no plan in place  to stop or contain a cracking, radiation-leaking, and potentially exploding canister.

Each canister contains roughly a Chernobyl nuclear disaster.  Once canisters explode, the radionuclides will travel with the wind, similar to how smoke traveled with the California Camp Fire.

San Onofre will have 73 canisters stored on-site by mid 2019.

Link to Article

Posted by on Dec 9, 2018 in Jim's Take on the Market, Local Flavor, Local Government, The Future | 11 comments

Compass Convention

We attended the Compass REtreat in Los Angeles over the last day and a half.

It was a quick get-together to roll out the future plans, participate in four breakout sessions on the usual topics – social media, team-building, scripts, and risk management – and attend the thank-you party last night.

I appreciate the effort, because the party itself was pretty impressive.  Gourmet-food stations, open bar, and a 12-piece live dance band for the 2,000 Compass agents who attended (out of 7,500).

But the thing I respected the most was that the CEO, Robert Reffkin, stood by himself at the entrance and personally greeted every agent as they arrived.

No assistant, no senior staffers or entourage – just Robert by himself, fully focused on expressing his appreciation to each of us.  Nobody does that.

They will be investing a boatload of money into the business, primarily in support of the agents being more effective in the coming years.

But it is the human connection with the agents, and commitment to our future together that will make Compass the leader in the industry.

Compass offices, nationwide:

End of 2017: 30

End of 2018: 150

End of 2019: 300 (projected)

Six months ago the company goal of 20% market share in the Top 20 markets nationwide sounded far-fetched.  Today it seems very real – we have offices in each of those Top 20 markets, and just need to grow further.

I think it’s going to happen.

Posted by on Nov 30, 2018 in Compass, Jim's Take on the Market, The Future | 2 comments