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Category Archive: ‘The Future’

Moving Out

It might get so bad that we see an occasional flurry of supply!  H/T daytrip:

More than half of California voters say the state’s housing affordability crisis is so bad that they’ve considered moving, and 60 percent of the electorate supports rent control, according to a new statewide poll.

The findings from UC Berkeley’s Institute of Governmental Studies reflect broad concerns Californians have over the soaring cost of living. Amid an unprecedented housing shortage, rents have skyrocketed and tenants have faced mass evictions, especially in desirable areas.

“It’s an extremely serious problem,” said poll director Mark DiCamillo. “People are being forced to consider moving because of the rising cost of housing – that’s pretty prevalent all over the state.”

Of the 56 percent of voters who said they’ve considered moving, 1 in 4 said they’d relocate out of state if they did.

Read full article here:

http://www.sacbee.com/news/politics-government/capitol-alert/article174026561.html

Posted by on Sep 19, 2017 in Jim's Take on the Market, Market Buzz, The Future, Thinking of Selling? | 1 comment

The Future

We got into the future of realtors over the weekend.

It started with the crowdfunding effort to raise money to build a realtor-owned portal, and the goal is $1,100,000.  But less than $200,000 has been donated so far, so it’s unlikely the effort will be successful.

It’s a good idea though!

I explained why here, and then kept it going in the comment section:

http://www.bubbleinfo.com/2017/09/16/realtor-portal-fundraising/

But talk about the future may make you wonder what will happen here.

What is the future of the bubbleinfo.com, and JtR?

While most of the house-selling industry is going to the big agent teams, I’m going to stick with the personal-consultant approach, and use this blog to help differentiate myself from the rest of the pack.

I’ll risk being seen as irrelevant, but I’ll take that chance and try to appeal to those who are curious for more data/insight about our local market.

It is astonishing how many visitors still come to the blog!  Don’t people stop reading real estate websites once they buy or sell a house?

Yet the Google Analytics above show that we’re still getting almost 5,000 unique visitors per months with virtually no promotion at all.  Even if most of those hits are the sexy internet bots, I’d be happy if we had 500 people!

Thank you for being here!

What’s Next for JtR and Bubbleinfo.com:

  • More Kayla – I’ve said it before, but I mean it this time.
  • Grow the Staff – Interviews began today to hire one more person.  Not looking for the big-team, just need more help with the little things.
  • Blog Upgrades – Work is underway to add a home-search feature, and consolidate others. Hoping to tune up the mobile access too.
  • Blog Content – This paragraph below is included in every sale, and I think it gives permission for agents to be honest and provide the transparency that is wanted and needed – not sure how far I will push it though:
  • Videos – I am more enthusiastic about videos than ever, and have been converting to Facebook Live as an alternative.  Not that many people watch the videos here, but I’ll keep them coming and hope to improve on them because they are the future.  Every blog post is automatically uploaded to that Facebook account, so if that is a preferred way for you to receive your knowledge, then like/follow the page there and you will get everything you get here, and then some!
  • Documentary Film – Today is the deadline for Sundance, and Giorgio has been screening privately to industry insiders to get valuable feedback before submitting.  We discussed last week about including some of my old foreclosure videos, so there is hope I won’t end up on the cutting room floor.

Stick around, there’s plenty more to come!

Tell your friends and family who are thinking of buying or selling to use this blog as a resource, and to employ Kayla and I to be their realtors!  I’d appreciate it!

Save

Posted by on Sep 18, 2017 in About Kayla, About the author, Bubbleinfo Readers, Jim's Take on the Market, The Future | 8 comments

Realtor-Portal Fundraising

The fundraising has begun for the building of the realtor portal:

https://fundrazr.com/StopZillow-PreLaunchTeam

Greg should disclose the secret weapon mentioned – because if the new website isn’t substantially better than Zillow, then we are wasting our time and money.  His list of features is not impressive, and no one is going to leave Zillow – consumers or agents – unless he has a spectacular idea up his sleeve.

Having our own portal is a good idea and within reach if every agent chips in a few bucks.  Are there enough who care?  Most will assume it is a duplication of the MLS and not really needed.

But the reason we need it is because having our own portal would help create the ultimate club for agents.  Let’s build the portal outside of the N.A.R. and other top-heavy administrative bodies that suck down profits yet provide little if any benefits to agents themselves.

You would think groups like N.A.R., C.A.R., Zillow, big brokerages, etc., provide some structure for the industry, but they don’t. Yes, there are rules, but nobody enforces them.  Brokers who are supposed to be supervising their agents will look the other way if it means making more commissions.

We don’t even need rules – an agent’s reputation among their fellow agents is enough to keep them in line.  The rule most broken is the sharing of listings with fellow agents, but that’s been abused for so long that most agents don’t remember signing that form when they joined the MLS.  We will have to live with single agency (aka dual agency for now), but it is already upon us anyway.

More of the upstart companies are choosing to advertise on radio and TV, and distorting the truth is widespread. If we eliminate all the unnecessary money-grubbing entities, be honest with ourselves and the public about the (no) rules, take the gloves off and fight it out with our fellow agents for the business while cooperating on our own powerful portal, then the best agents would survive – which is ultimately what the consumers deserve.

Posted by on Sep 16, 2017 in Jim's Take on the Market, Realtor, Realtor Training, The Future | 7 comments

Driverless Cars and Real Estate

Thanks JB!

https://www.realestateconsulting.com/8-big-housing-changes-thanks-driverless-cars/

Fully autonomous vehicles (AVs) should become commonplace within 10–20 years, disrupting entire industries while triggering structural shifts in housing and the economy.

The path to government approval and consumer acceptance of AVs will have hiccups no doubt, so we expect ride-sharing along with semi-autonomous vehicles to kick-start the movement towards AVs.

For consumers, the tipping point for large-scale adoption will come when not owning a car makes more financial and logistical sense than traditional ownership. Car enthusiasts, the affluent, and rural households will continue to own cars as AVs evolve.

The combination of widespread ride-sharing and self-driving cars will reshape housing in 8 significant ways:

  1. Prime real estate will be unlocked for new home construction (parking lots, auto dealerships, gas stations).
  2. Outlying drive-until-you-qualify housing markets will eventually reemerge once the majority of core infill markets have repurposed their prime real estate.
  3. Urban employment should continue rising as prime real estate is repurposed for housing, allowing more people to live closer to city centers.
  4. Density will increase, with the days of wide streets, massive driveways, and two-/three-car garages a thing of the past.
  5. Construction costs will decline as transportation costs plummet for moving building products from manufacturing facilities/warehouses to new home construction sites.
  6. Fewer home sales will occur, as the elderly will be able to stay in their existing home long after losing their driving rights.
  7. Assisted-living facility demand will be less than most people expect.
  8. Repair and remodeling will flourish due to seniors remodeling their homes to age in place. Millions of garages will also be converted to fully functioning livable space.

Read full article here:

https://www.realestateconsulting.com/8-big-housing-changes-thanks-driverless-cars/

Posted by on Sep 16, 2017 in Jim's Take on the Market, The Future | 5 comments

More Bubble Talk

This expert says the next recession will cause home prices to come down hard, but we learned last time that people have to live somewhere, and the government will save us.

http://www.marketwatch.com/story/this-veteran-investor-nailed-the-last-housing-bubble-and-now-expects-another-2017-09-15

An excerpt:

Stack’s prescience makes his latest warning particularly ominous. He has dusted off the same Housing Bellwether Barometer that raised red flags more than a decade ago and is watching it to see when — not if — the nation’s booming housing market will turn down.

That barometer, Stack explained, is an index of “the most sensitive stocks in the housing industry” — including homebuilders and mortgage companies. It recovered nicely after the 2008-2009 crash and has been flat for the past few years. But over the past 12 months, Stack said in an interview, it “started to go up like a rocket ship again, similar to what it did back in 2004-2005.

That tracks the anecdotal evidence he’s seen of frantic bidding wars in some of the nation’s hottest markets. “It’s that kind of nuttiness that defines the psychology of a bubble,” he said.

Some key statistics also point to a new housing bubble:

  • The Case-Shiller national index hit all-time highs last December and continues to rise.
  • Case-Shiller indexes show prices in Boston, San Francisco, and Charlotte, N.C. about 10% above their previous peaks; Portland and Seattle, around 20% higher, and Denver and Dallas, 40% higher. These are the new boom towns, replacing Las Vegas, Phoenix, and Miami the last time around.
  • The SPDR S&P Homebuilders ETF has quintupled (up 400%) from its March 2009 lows, vastly outperforming the broad S&P 500 , which has gained around 270%.

Stack says the best way to measure housing’s true value is to compare it with long-term inflation, and that measure is also raising a warning flag.

“Median family home prices are 32% above the long-term inflationary trend — in other words it has to fall 32% to get down to where it was,” Stack explained. “That’s not as bad as the 35% in 2005, but it does kind of wake you up and say, this isn’t normal, this is going to end badly.” To me, there isn’t much difference between being 32% and 35% overvalued.

Stack acknowledges there are big differences between 2005 and now. “You’re not seeing the esoteric mortgages, the so-called liars’ loans…,people buying multiple homes, thinking that they can rent it and make money on it,” he said.

Back then there was rampant mortgage fraud, huge demand from Wall Street for subprime mortgage securities and rating agencies giving them black checks, with no regulatory oversight whatsoever. Also, says Stack, there was an inventory glut then and a shortage now that is causing prices to soar.

On the other hand, “you are seeing lending institutions loan 95% or more of the value of the home,” he said. “That is a problem, because when home prices come down, it makes it very easy for the home buyer to walk away from that mortgage.”

One key similarity: “We still have a lot of easy money out there for mortgages,” he said. “We have a Federal Reserve policy today that’s unfortunately like the early 2000s,…, and it’s conducive to bubbles.” The federal funds rate now is very close to the 1% low where Greenspan pushed it, and that triggered the final, disastrous stages of the last bubble.

The big danger, of course, is the next recession, which Stack views as inevitable. “At some point we’re going to have another economic downturn, another economic recession,” he said.  “When we see that downturn…you’re going to see [housing] prices come down quite hard over a period of 12- to 24 months.” He added that he doesn’t foresee a recession until at least 2018.

Stack’s record isn’t perfect — in early 2016 he called a bear market that never happened — but it’s been excellent over the long run, and going back to the 1987 stock market crash, he’s had a knack for spotting bubbles.

Posted by on Sep 15, 2017 in Doomer, Jim's Take on the Market, The Future | 12 comments

$1B Mid-Coast Trolley Extension

More on the Blue Line trolley extension:

On September 14, 2016, the top transit official in the United States committed $1 billion toward building the San Diego region’s newest trolley line, signing an agreement that will provide 50 percent of the funds to extend the popular transit service for 11-miles from Old Town to UC San Diego and the University City community.

The largest public transit project in the history of the San Diego region, the Mid-Coast Trolley Extension will extend the existing Blue Line, building nine new stops along the north coast of San Diego, including near Mission Beach, Pacific Beach, the VA Medical Center, the UC San Diego campus, and the dense residential and commercial areas along Genesee Avenue.

“The Mid-Coast Trolley will bring fast, reliable transit to the places where it’s most needed, including our largest research university and biggest employment center,” SANDAG Chair and San Diego County Board of Supervisors Chair Ron Roberts said. “At the same time, it is an outstanding example of our ability to leverage the region’s local TransNet dollars to bring in outside money to complete major transportation projects.”

The San Diego region was able to garner the 50 percent match for the Mid-Coast Trolley in large part because it has a dedicated local source of funding that provided the other 50 percent match for the project. Revenues from TransNet, the countywide half-cent sales tax for transportation, are covering half of the $2.1 billion total project cost.

“FTA is proud to partner with San Diego to bring new transit options to this growing region,” said FTA Acting Administrator Carolyn Flowers. “With the population along the Mid-Coast corridor expected to grow nearly 20 percent in the coming decades, this Trolley extension will offer a much-needed alternative to traffic congestion in the years ahead.”

A ceremonial signing of the Full Funding Grant Agreement – dedicating approximately $1 billion to the project over the course of 10 years subject to annual Congressional approval – took place on the campus of UC San Diego, at a location where the future Pepper Canyon Trolley station will be built. As part of the ceremony, Flowers handed Roberts a symbolic $1 billion check. Metropolitan Transit System (MTS) Board Chair Harry Mathis, UC San Diego Vice Chancellor Gary Matthews, and Cynthia Abair, Acting Director of VA San Diego Health Care System, also spoke during the ceremony.

Pre-construction activities for the project – primarily the relocation of underground utilities out of the project alignment – are already underway. Primary construction is expected to begin this October, with service anticipated to start in 2021.

Once the extension is built, transit riders will enjoy a one-seat ride (no transfers) from San Ysidro to University City. Planners estimate that the project will provide more than 20,000 new transit trips every weekday.

The construction of the Mid-Coast project is expected to produce more than 14,000 new local jobs. Even after the construction is over, the Mid-Coast project will have an estimated $116 million of annual economic impact on the region by reducing congestion, reducing parking needs, and increasing access to jobs. The Mid-Coast corridor supports more than 325,000 jobs. The two ends of the route – Downtown San Diego and University City – account for nearly half of that total.

For more information, visit KeepSanDiegoMoving.com/MidCoast

My tour of the area:

The official, professional flyover tour:

Posted by on Sep 9, 2017 in Bubbleinfo TV, Jim's Take on the Market, La Jolla, Local Flavor, Local Government, The Future | 6 comments

Predicting The Big One

If the tragic hurricanes weren’t enough, now Mexico has been struck by a 8.2 earthquake last night.  I covered earthquakes in San Diego last month, but here is another story on the risk of the Big One hitting Southern California – and San Diego is still looking good, relatively:

http://www.ocregister.com/2017/03/10/what-are-the-chances-of-a-major-earthquake-in-southern-california/

The U.S. Geological Survey 2014 earthquake forecast indicates that the likelihood of a moderate earthquake – between magnitude 6.5 and 7.5 – has decreased, but the chance of a higher-magnitude quake in the region has increased.

Plate movement
The rate of plate movement along the San Andreas fault is approximately 1.3 inches each year – about the same rate your fingernails grow. A USGS report released March 2 detailed a study of the southern San Andreas fault. The study found evidence of 10 ground-rupturing earthquakes between magnitude 7.0 and 7.5 between 800 A.D. and 1857.

Predictions based on the survey forecast a 16 percent chance of a magnitude 7.5 or larger earthquake near Kern County in the next 30 years.

Prediction models
The USGS cautions that although its most recent prediction model is vastly improved since the version in 2008, it is still an approximation. The USGS uses two kinds of scientific models to predict earthquake probability.
1. The earthquake rupture forecast shows where and when the earth might slip along the state’s many faults.
2. The ground motion prediction model estimates the subsequent shaking given by one of the fault ruptures.

The color-coded data are the state’s forecast from 2014:

(SD in bottom right corner)

The USGS estimates long-term quake hazards to give communities an assessment of risk in their area. More than two-thirds of the nation’s annualized earthquake losses in property and structures will be in California, and in California, 80 percent of the losses will be in these 10 counties:

Top 10 counties by estimated annualized earthquake loss (percent of state total)

1. Los Angeles (30.6%)
2. Santa Clara (8.9%)
3. Alameda (8%)
4. Orange (7%)
5. San Bernardino (6%)
6. Riverside (5.6%)
7. Contra Costa (4.6%)
8. San Francisco (3.8%)
9. San Mateo (3.5%)
10. San Diego (3.3%)

A major earthquake hitting Southern California would be devastating to the region, and is one of the biggest threats to disrupting the housing market.  But hopefully the impact on San Diego housing would be less.

Posted by on Sep 8, 2017 in Jim's Take on the Market, Local Flavor, The Future | 2 comments

New Homes for Boomers

What could really boost the market further would be if we had more new or newer single-story homes for sale.  Baby-boomers would be much more likely to ditch the older two-story family estates and glide into a ready-set single story home – if there was just an easy exit.

If you wanted a new house under $500,000, how about Las Vegas? The home above is in Summerlin, and I’ve been there.  It is a great alternative for those who don’t mind the heat!

Or if you insist on San Diego County, but might go to the outskirts?

Here are one-story new-home options for you locally:

Plus, this is the Pardee tract they sold off to Toll:

True, in order to downsize, most sellers need to leave town, but at least there are some new-home options to consider nearby.

The folks at the 55-and-over Auberge near Santaluz just wrapped up sales of their brand-new one-story homes, and it would be a good place to look for resales.  Here is a tour of the Plan 3 model, which one of my buyers purchased:

Save

Posted by on Sep 7, 2017 in Boomers, Bubbleinfo TV, Builders, Jim's Take on the Market, One-Story, The Future | 2 comments

The Challenge of Capitalism

An interesting essay on today’s housing crisis – thanks daytrip!

But the pushers of market-friendly solutions, and even most affordable housing activists, miss a central point in the housing debate: we already have enough housing in this country.

The problem is not supply. It’s that the supply is owned by the wrong people.

From downtowns to suburbs, there’s a glut of vacant housing and land owned by the rich. The one neat trick to solving the housing crisis: give the things owned by the rich to the poor.

The richest neighborhoods in many cities are also some of the most vacant. If you walk around Midtown Manhattan or Downtown Brooklyn on a weekday evening and look up at all the residential luxury skyscrapers that have cropped up in the last decade, you might notice they’re relatively dark.

In the stretch of Manhattan between Park and Fifth Avenues and 56th and 59th Streets, 57 percent of apartments were vacant at least ten months a year, according to a New York Times analysis based on data from 2012. Buildings from 60th Street to 63rd Street were also only around 50 percent occupied.

Across the country, even in smaller cities, downtowns are being filled with tall, expensive, and often empty apartment buildings. The apartments in the flashiest of these buildings, like the towers rising along 57th Street in New York (now sometimes called Billionaire’s Row) are often bought by the LLCs of the uber-rich, and they’re used more as investment opportunities than as places to live.

So why do we keep building so much vacant luxury housing? It’s a simple function of how capitalist land markets work.

With demand for housing high and government intervention and spending on affordable housing low, land prices have no reason to drop. If a developer buys a plot of land in, say, Cleveland for $1 million, there’s no reason the lot next to his or hers will be sold for less per square foot, and so whatever developer purchases that land will have to build something that extracts $1 million, plus profits, in rents or sales.

This is not a new phenomenon — it’s one of the central theses of Frederick Engels’ 1872 treatise, “The Housing Question:” if there’s no purposeful depression of prices on land, housing prices have no reason to become cheap. The land at the center of cities will always go up, until they are unaffordable to everyone but the richest.

Read full article here:

https://theoutline.com/post/2153/evict-the-rich

Posted by on Aug 23, 2017 in Market Conditions, The Future, Thinking of Building? | 4 comments