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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’

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

I-buyer Advantage

Everyone is getting into the home-buying business.  First it was the well-funded disrupters like OpenDoor and Offerpad, and then Zillow, Redfin, Knock and others jumped in – which caused Coldwell Banker, Keller Williams to also announce their programs (plus Compass and others won’t be far behind).

What will the real estate world be like if sellers have multiple choices of cash buyers?  Which ibuyer will have the advantage?  Zillow is already in the driver’s seat, and they include the additional service of offering a third-party realtor’s opinion too.

From Mike DelPrete – an excerpt:

Zillow announced its Zillow Offers program in Phoenix earlier this year, and started buying houses in May. It is heavily promoting the program across its site. While looking in the Phoenix market, a prominent message is displayed on all active for sale listings.

In its latest quarterly results, Zillow revealed how effective the promotion was: “Since launch, we have received more than 10,000 offer requests from potential sellers.” And: “…in Phoenix, for example, we are seeing about 15% of all dollar value that’s being sold in Phoenix any given month.” That translates to about 1,600 offer requests per month.

Opendoor is on record saying that more than “one in two sellers who received an Opendoor offer” will accept it. It’s currently buying around 300 houses per month in Phoenix, so that’s about 600 offers made per month.

There’s a difference between an offer being requested, and an offer being made. What’s clear, though, is that Zillow is generating a massive amount of offer requests each month, at volumes that rival (and exceed) Opendoor.

Most importantly, Zillow’s leads are coming with zero incremental customer acquisition cost, while Opendoor and other iBuyers must advertise directly to consumers to generate leads.

They aren’t in San Diego yet, but it’s coming. Read Mike’s full article here:

http://www.mikedp.com/articles/2018/10/8/zillow-opendoor-and-controlling-the-consumer-journey

Posted by on Oct 8, 2018 in ibuyer, Jim's Take on the Market, The Future, Zillow | 0 comments

Compass

Today was our Compass Day.

We met our CEO, Robert Reffkin, and we were thoroughly impressed.

We come from different backgrounds – I’m the scrappy street guy, and he is the Wall Street wunderkind – but we see the future of real estate the same way.

He mingled for longer-than-necessary during the breakfast warm-up, and then spoke for about an hour on his vision of Compass, and creating a platform for top-producing agents to best serve their clients.  Then he hung around for another extended period during happy hour, shaking hands and making himself very available to agents and support staff alike. He exemplified leadership in the best way.

It is a contagious environment!

Since January, Compass has hired 210 top-producing agents in San Diego (when we signed two months ago, there were 160). Most importantly, there are also 54 full-time support staff, which is unheard of in typical real estate brokerages.

There will be some consolidation coming to the real estate industry, and eventually the consumers will have a choice between taking their chances with discount fees for minimal service or hiring top professionals to deliver superior service and results (Wal-Mart vs Nordstrom).

We’ll do a second post on this topic, which won’t include how old I feel. I was the only one wearing a tie, and black shoes.  This is a younger crowd!

Posted by on Oct 3, 2018 in Compass, Jim's Take on the Market, The Future | 9 comments

$400 Million x 2

The most fascinating thing about working for Compass is how many people ask about Compass (especially other agents).  I signed up primarily for the future potential, and where big money might lead us.

We got another sense of how big yesterday:

Compass, a real-estate marketplace startup, raised $400 million in an investment round that will bring the company closer to an eventual initial public offering.

After the investment, the New York-based company will have a $4.4 billion valuation, a person familiar with the matter said. The financing will help Compass expand its real-estate technology into more cities, including outside the U.S., the firm said in a statement.

The Softbank Vision Fund and Qatar Investment Authority are leading the round, Compass said.  The company expects growth in 2018 to double to almost $1 billion in revenue, according to the person, who asked not to be identified because the information is confidential. Compass makes its money by taking a small cut of each transaction coordinated by its real-estate agents. The company said it’s on track to post more than $34 billion in sales volume this year.

“We will continue to capitalize on our momentum nationally and internationally,” said Ori Allon, the company’s co-founder and executive chairman.

The latest funding brings the total raised by Compass to $1.2 billion. Besides international expansion, Compass is seeking to enter related businesses beyond property listings, such as mortgage title transfer and moving, CEO Robert Reffkin said in a June interview.

“What books were for Amazon, the brokerage model is for us,” Reffkin said at the time.

Link to Bloomberg Article

On the same day, the same bank announced the same for OpenDoor:

Growing direct homebuyer Opendoor now has $3 billion in financial backing (yes, that’s “billion” with a “b”) thanks to a sizable new investment from Japanese technology company SoftBank Group.

Opendoor announced Thursday that it secured a $400 million investment from SoftBank Vision Fund, SoftBank’s investment arm.

That investment pushes Opendoor’s total equity capital raised above $1 billion – $1.045 billion, to be exact.

In addition, Opendoor said Thursday that it also recently secured $2 billion in debt financing from unnamed “top banks,” meaning the growing company now has more than $3 billion in total funding since it first began buying and selling houses in Phoenix and Dallas-Fort Worth in 2014.

Since then, Opendoor has been growing by leaps and bounds and raising money hand over fist.

Opendoor is now operating in nearly 20 markets, including Atlanta, Charlotte, Dallas-Fort Worth, Las Vegas, Nashville, Orlando, Phoenix, Raleigh-Durham, Tampa, and San Antonio, and has plans to into California, the Pacific Northwest, and several other areas over the next few months.

Opendoor’s next market expansions will be in Sacramento, California; Riverside, California; Denver, Colorado; Portland, Oregon; Austin, Texas; and Jacksonville, Florida.

And the company plans to be operating in 50 markets by 2020.

Link to Article

It looks like the future of real estate sales will be determined by how these big-money players spend their dough!

Posted by on Sep 28, 2018 in Compass, Jim's Take on the Market, Realtor, The Future | 0 comments

Open Chaos

Opendoor, the ibuyer who purchases your home for cash and closes escrow at your leisure (as long as you don’t mind paying their 6% to 13% fees plus home repairs) has made a deal to acquire a discount brokerage:

Opendoor announced Tuesday morning that it has acquired Open Listings, a real estate site that offers homebuyers a 50% refund on the fees their real estate agent would have received.

With the acquisition, Opendoor will now be able to buy a home directly from a seller, then help that seller find a new home (whether it’s a newly built home or an existing one), offer them a mortgage, and close on the sales through its own title operations.

Basically, buyers who use Open Listings find, tour, and buy homes through the platform. Real estate agents only come into the process when it’s time to make an offer on the home.

Link to Article

They are building a platform similar to the Red team’s, and both are weak in the beginning – they both offer inexperienced agents or no help at all at the initial showing of the home.  These guys expect you to go to the listing agent’s open house, and then make an offer with their online agent.

I believe that every buyer should receive professional advice from their agent while at the property – and reflect those details into the offer price.  Otherwise, you pay too much!

The online agents haven’t seen the house in person, and can’t offer the same expertise.  Besides, if you are an online agent, you just want to hurry up and write the offer and expect any defects to come out during the home inspection.  The buyers end up basing their entire investigation on a $500 guy who has no fiduciary duty to them and whose job is limited to the moving parts of the house.

But let’s say you can live with that.

These types of disrupter platforms are entirely dependent upon all agents sharing their listings on the MLS.  But as the major brokerages continue to input their listings on their company website first (Redfin’s publicly-stated policy), the MLS will soon become a relic, and the marketplace of last resort.

All of the market conditions are pushing in this direction.  We are transitioning from the Wild, Wild West to Full-Tilt Chaos!

Get Good Help!

Posted by on Sep 12, 2018 in ibuyer, Jim's Take on the Market, Listing Agent Practices, Realtor, The Future | 1 comment

How Far We’ve Come

Hat tip to my father-in-law who sent this in – he wasn’t around then!

  • What a difference a century makes! Here are some statistics for 1918:
    • The average life expectancy for men was 47 years.
    • Fuel for cars was sold in drug stores only.
    • Only 14 percent of the homes had a bathtub.
    • Only 8 percent of the homes had a telephone.
    • The maximum speed limit in most cities was 10 mph.
    • The tallest structure in the world was the Eiffel Tower.
    • The average US wage in 1910 was 22 cents per hour.
    • The average US worker made between $200 and $400 per year.
    • A competent accountant could expect to earn $2000 per year.
    • A dentist $2,500 per year.
    • A veterinarian between $1,500 and $4,000 per year.
    • And, a mechanical engineer about $5,000 per year.
    • More than 95 percent of all births took place at home.
    • Ninety percent of all Doctors had NO COLLEGE EDUCATION!
    • Instead, they attended so-called medical schools, many of which were condemned in the press AND the government as “substandard.”
    • Sugar cost four cents a pound.
    • Eggs were fourteen cents a dozen.
    • Coffee was fifteen cents a pound.
    • Most women only washed their hair once a month, and, used Borax or egg yolks for shampoo.
    • Canada passed a law that prohibited poor people from entering into their country for any reason.
    • The Five leading causes of death were:
      • 1. Pneumonia and influenza.
      •   2. Tuberculosis
      •   3. Diarrhea
      •   4. Heart disease
      •   5. Stroke
    • The American flag had 45 stars.
    • The population of Las Vegas, Nevada was only 30.
    • Crossword puzzles, canned beer, and iced tea hadn’t been invented yet.
    • There was neither a Mother’s Day nor a Father’s Day.
    • Two out of every 10 adults couldn’t read or write.
    • And, only 6 percent of all Americans had graduated from high school.
    • Marijuana, heroin, and morphine were all available over the counter at local corner drugstores.  Back then pharmacists said, “Heroin clears the complexion, gives buoyancy to the mind, regulates the stomach, bowels, and is, in fact, a perfect guardian of health!”
    • Eighteen percent of households had at least one full-time servant or domestic help.
    • There were about 230 reported murders in the ENTIRE U.S.A.!

Posted by on Sep 7, 2018 in Jim's Take on the Market, The Future | 6 comments