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Category Archive: ‘Thinking of Buying?’

Additional Expenses of Homebuyers


Buying a house just gets you started – there are the other goodies too.  In the tony coastal regions, add a zero to these numbers!

http://www.mortgagenewsdaily.com/07132017_home_buying_behavior.asp

An excerpt:

Specifically what do home buyers purchase?

The biggest ticket item for new home buyers is sofas, spending an average of over $700, 60 percent more than spent by buyers of existing homes and 6.4 times more than spent by non-movers in a year.  There is also a large effect on purchases of living room (other than sofas), dining room, and kitchen furniture with new home buyers spending $687 on living room chairs/tables and another $345 on kitchen and dining room future, outspending existing home buyers 12 to 1 in both categories and non-buyers by 5 and 9 times respectively.

The differences in spending patterns are similarly large when comparing spending on window coverings. New home buyers spend 10 time more than existing home buyers and 4 times more than non-buyers.

The biggest outlay in the appliance budget of new home buyers are for laundry equipment, landscaping equipment and computer hardware/systems. They outspend both existing home buyers and non-buyers on all of these and on big-ticket items like refrigerators and televisions as well.

The high level of appliance spending may seem surprising given that many new homes come equipped with them.  However, she cites a survey by the Home Innovation Research Labs found that two-thirds of new homes built in 2015 came without laundry appliances and 36 percent had no installed refrigerator.

Also unexpected, new home buyers spend almost as much ($3,729) as existing homes buyers ($4,085) and outspend non-moving owners ($2,232) on property alterations and repairs, but they spend on quite different things.  Existing home buyers and non-movers spend more on various repairs and replacements and on kitchen/bathroom renovations and purchase and installation of new systems while new home owners spend on outside additions and alterations, including new driveways, walks, or fences.

The analysis further shows that home buyers don’t compensate for their higher level of spending by cutting back on other things like entertainment, travel, restaurants meals, etc. “This confirms that home buying indeed generates a wave of additional spending and activity not accounted for in the purchase price of the home alone,” NAHB says.

Posted by on Jul 13, 2017 in Jim's Take on the Market, Thinking of Buying?, Tips, Advice & Links | 0 comments

Windansea 4-Plex

Two new listings in La Jolla in two days!

The fourplex is 313-319 Nautilus, which is just seven doors up from the world-famous Windansea Beach.  They are similar 1-bedroom units, built in 1951 and recently renovated.  The rents range from $2,000 to $2,195 per month on annual leases.

It’s not even a 3 cap, so investors would have to appreciate the land value and proximity to the beach to make it worth it for them.  But there has been so much development nearby, we think the eventual buyer will tear it down and build new.

List price is $2,350,000, which is the appraised value.

Here is the property manager’s interior tour:

Beautiful remodeled one bedroom cottage steps to beach in best area of Windansea. Designer upgrades include tiled bath and kitchen- new fixtures, cabinets, counters and new stove, fridge, microwave and dishwasher plus all new flooring. This immaculate cottage is bright and sunny and comes with a Garage included. The unit has high open beam ceilings.

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Posted by on Jul 1, 2017 in Jim's Take on the Market, La Jolla, Real Estate Investing, Thinking of Building?, Thinking of Buying?, Why You Should List With Jim | 0 comments

The Unwanted McMansion

A great article from realtor.com. Excerpts:

As baby boomers look to downsize out of their suburban McMansions, a generational showdown is looming: Millennials might be coming into their own as the nation’s biggest group of first-time home buyers, but they aren’t exactly lining up with bids in hand for those large, expensive homes in the sleepier suburbs. Instead, they’re looking for a different kind of home—the same ones, in fact, that the empty nesters are looking to buy.

It’s a battle of the millennials vs. baby boomers playing out in the nation’s suburban housing markets.

Younger and older generations alike are gravitating toward smaller dwellings in more urban, walkable suburbs and cities, with restaurants and coffee shops around the corner. It’s leading to a real estate traffic jam: Increasingly, boomers are getting stuck, because most can’t buy the home of their dreams until they unload their current ones. And many millennials have neither the desire nor the means to help them out.

“What you have is everyone chasing the same type of home,” says Rick Palacios, director of research at John Burns Real Estate Consulting. “More and more buyers of all ages want to avoid having to deal with a huge yard and all the upkeep and the costs to maintain [a larger] home.”

It’s creating an odd imbalance in a real estate market—a disruption to what has long been considered the traditional generational housing life cycle. And it’s leaving many would-be buyers out in the cold.

When they do make that move to the suburbs, millennials often seek more walkable towns that have many of the urban amenities they’re used to, like bike lanes, social events, and lots of shops and restaurants.

“What’s really attracting millennials are the communities that are bringing the urban flavor out to nonurban towns,” Palacios says. “They don’t want the traditional  massive homes and big yards. They want smaller homes and cool things to do.”

“It’s more important to have proximity to the lifestyle they want,” says Jason Dorsey, president and researcher at the Center for Generational Kinetics, focused on millennials and Generation Z. “Their living room is actually the park outside the condo.”

It’s not just the size of boomers’ homes that is a turnoff; it’s also the style. Times and tastes have changed, and today both boomers and millennials are attracted to modern, open floor plans—which aren’t common in the older homes that boomers are hoping to unload. Boomers like the flexibility of these spaces for aging in place, and millennials like the clean design.

And while they’re willing to compromise on size, millennials are less willing to bite the bullet on amenities. Weened on HGTV, they want high-end finishes, nice countertops, upscale appliances, and luxurious bathrooms.

“They’ll buy a smaller house with fancier amenities, close to town, rather than chase square footage,” Dorsey says.

As for Generation X, having weathered the Great Recession during what should have been their prime earning years, they now have to save for their kids’ college expenses, their retirement, and caring for their aging parents. So they’re not likely to trade up from their starter homes. And if they do, many prefer an easier-to-maintain smaller home in a community with activities they enjoy—just like those millennials and boomers, Dorsey says.

Meanwhile, since the boomers see their home as their nest egg, they’re not all willing to reduce their asking price and shortchange their retirement accounts, says Dorsey. So more of them end up staying put.

“There certainly was a lot of speculation about what would happen if the boomers tried to sell their houses en masse, and whether that would flood the market with a supply of large homes that the younger population didn’t want—or couldn’t afford—to buy,” Porter says. But “the boomers do seem to be moving less and aging in place more.”

Read full article HERE.

Posted by on Jun 9, 2017 in Boomer Liquidations, Boomers, Jim's Take on the Market, The Future, Thinking of Buying?, Thinking of Selling? | 5 comments

Private Down-Payment Assistance

Those with less skin in the game are typically the people who have the most trouble in a down market. Apparently, the potential profit must be so large that the investors overlook that – or figure there is little chance the government will let the market go down again?

LINK

Several years after her divorce, Tricia DeWaal was still living in the 3,200-square-foot home where she’d raised her children. When her youngest moved out, DeWaal knew it was time to downsize.

“For what I wanted, I had a 20% down payment, but that would pretty much clean me out in terms of cash,” DeWaal told MarketWatch. “I wanted to have some backup.”

After lots of online research, DeWaal came across a company called Unison, which had an intriguing sales pitch. The company’s home-buyer program offers buyers money for a down payment in exchange for a share of equity in the home, to be paid back when the owner sells.

DeWaal had what she called a “very positive experience.” “It’s definitely a good thing for somebody who’s trying to afford a certain amount that they can’t quite get to,” she said.

Homeownership’s biggest barrier to entry, the down payment, looms larger and larger all across the country. Student debt payments and high rents are formidable barriers to saving, and, while there are plenty of ways to buy a home with less than 20% down, all require some form of mortgage insurance, making them more expensive.

For a long time, nonprofits have tried to help home buyers up and over the hurdle. But in today’s tight market and constrained lending environment, fintech companies are seeing an opportunity as well, particularly in the hottest housing markets, where 20% down can mean six figures.

Unison and a competitor, OWN Home Finance, which is set to launch a similar product later this year, got started years ago with a slightly different business model: allowing homeowners with high levels of accrued equity a means of tapping into that money.

Here’s how Unison’s model works: The company contributes up to 50% of the down payment, or 10% of the total cost of the home, and, then, when the owner sells, Unison takes a share of the profit, usually 35% — or a share of the loss, also usually 35%.

For many housing market observers, the idea makes a lot of sense.

“I love to see the experiment,” Brett Theodos, a senior research associate at the Urban Institute, told MarketWatch. “It’s really intriguing as home prices appreciate and incomes don’t. It feels like a missing rung in the ladder between renting and owning. We have so many investment vehicles that you can get into for small amounts of money, but homeownership is very much an all-or-nothing proposition.”

Still, with programs like these, according to Theodos and other experts, the devil is in the details.

Read More

Posted by on May 31, 2017 in Down Payments, Jim's Take on the Market, Mortgage News, Thinking of Buying? | 4 comments

Love Letter

Now that everyone does it, you have to wonder about the effectiveness – but if it’s competitive, you can’t afford not to!  Though I did have a seller tell me to not include any emotional stuff to try to influence her – this is business!

Link to cnbc.com article

If you’re in the market to buy a house, there’s one simple, free thing you should do: Write a letter to the seller about why you want to buy the house.

A well-written letter can make the difference between winning your bid and missing out.

Obviously, the most important thing to do to win a bid is to offer the most money or the quickest, least painful closing timeline. But in a competitive market where bids are tight, a good letter can help.

A house is a very personal, intimate part of a family. Selling is not easy and not fun. It’s not just a financial decision. A home has memories and emotions tied into it. When selling, you want to know that you’re passing it along to the right people who will care for it as much as you did. And, if you care about your neighbors, you want some peace of mind that you’re giving them good new people for the block.

I am currently in the process of selling my second home and buying my third house in a five-year period. Hopefully, this one will be the “forever” home, and we won’t be moving again.

When we sold our first house, the buyers sent us a wonderful note about why they wanted the house. They told a story about searching for the perfect home and how when they came to our house it felt right. They talked about their family and how this house would be perfect for their home.

They also offered the best price, so there wasn’t much debate. But selling the house to the highest bidders, who told us why they wanted the house, made us happy. It also sanded off any rough edges that may have come later in the selling process.

In the process of buying our third house, we wrote a letter to the sellers about why we wanted the house. We were offering significantly below the opening asking price, so we wanted to help the process in any way possible. This was not some sort of flip, or us trying to take advantage. We loved the home, loved the renovations, loved the neighborhood and wanted to raise our family in the home.

We won the bid. Did the letter help? Perhaps. Our broker told us the sellers wanted us to buy the house, and our broker implied that was because we fully appreciated all the work that had been done on the house.

While selling our second house, we got a letter from bidders who offered below our asking price. They lost the bid, but we were rooting for them to win because of their gracious letter. The winning bidders offered significantly more money, but no letter. If the bids had been tied, the letter writers would have won. If the bids had even been close — just a few thousand dollars apart — we might have gone with the letter writers.

Buying a house is an expensive, time-consuming process. A letter shouldn’t take long to write, and it doesn’t cost a thing. If you’re buying a house, you’d be foolish not to do it.

Link to cnbc.com article

Posted by on May 30, 2017 in Jim's Take on the Market, Thinking of Buying? | 1 comment

RSF Open House Today 12-3pm

Kayla and I will be at 7060 Via Del Charro today 12-3pm!

An authentic California Ranch on 2.79 acres in horse country! Park-like estate with a stunning single-level main house that was redesigned and extensively upgraded in 2009 – it’s like a new house! The wide-open floor plan features wood-beam ceilings, wide-plank real hardwood floors, and several sets of french doors! Pool/spa, 3-car garage, TWO detached guest houses (perfect for multi-gen), tennis court, RSF schools, & no HOA!  The master suite was highly upgraded in 2016 with new steam shower, jacuzzi tub, and walk-in closet! On sewer too! Plenty of room for horse facilities with trails nearby. $2,750,000

https://www.zillow.com/homedetails/7060-Via-Del-Charro-Rancho-Santa-Fe-CA-92067/16730852_zpid/

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Posted by on Apr 29, 2017 in Jim's Take on the Market, One-Story, Open House, Rancho Santa Fe, Thinking of Buying? | 4 comments

Live-Work

Good examples of a growing trend in flex space, and how people are handling their live-work needs:

http://www.realtor.com/news/trends/working-home-real-estate-developers-help/

An excerpt:

Self-employment rates are higher for older Americans than for younger workers, according to the Bureau of Labor Statistics, and new homes targeting mature buyers reflect this trend.

At Chelsea Heights, a development in Silver Spring, Md., developer EYA built townhouses with a flex space on the ground floor, which many owners use as an office.

In 2015, Michael Shulman and Jackie Judd paid $950,000—more than they planned—for a 2,600-square-foot townhouse in Chelsea Heights. It has three bedrooms, along with flex space.

“The flexibility of the floorplan was very important to us,” says Mr. Shulman, a 60-year-old investment adviser who runs an online service called “Options Income Blueprint” from his townhome’s first-floor flex space. Ms. Judd, a freelance journalist, works on the townhome’s third floor, far away from her husband’s frequent webinars.

“We don’t get into each other’s way during the day,” says Mr. Shulman. “You know that old saying: I married you for better or for worse, but not for lunch.”

Lisa Phillips Visca, a writer and script consultant in Los Angeles, works out of her three-bedroom, 2,200-square-foot condominium at Playa Vista, a planned community on the Westside of the city. At least once a day, she leaves to get air, grab coffee or lunch or shop for groceries.

With her husband, Dennis Visca, a garment-industry executive, she moved from a larger house in Pacific Palisades in January. The couple was drawn to the vibe and walkability of the neighborhood, which locals call Silicon Beach for its lively technology scene, with startups and offices of tech titans such Google and YouTube.

The Viscas, both empty nesters in their 50s, paid $2.1 million for their condo, located in a modern brick building designed by KTGY. Mr. Visca took the unit’s flex space as his home office, while his wife uses one of the bedrooms for her work, which includes directing and producing films, plays and television shows. Ms. Phillips Visca starts the day as early as 3 a.m. with coffee in her office, conveniently located on the far end of the space, away from master bedroom and living room.

“There is perfect privacy,” she says. For a creative person working from home, she says, “the floorplan was a huge bonus.”

Posted by on Apr 27, 2017 in Jim's Take on the Market, Thinking of Buying? | 1 comment

My New Listing in The Harbor Club

Are you looking for a larger downtown condo with premium upgrades, walls of glass, and close to all? Check out this 2br/2ba, 1,624sf single-level home with renovated kitchen, hardwood floors, marble and granite baths, custom sound and lighting, and extra-large MBR walk-in closet! Full resort-style amenities including lobby attendants, newer pool/spa, BBQs & picnic area, library, fitness center, & sauna. Gaze out over the tropical oasis from every room – urban living at its best!  Only $799,900!

Harbor Club Condominiums is a high-rise residential building in San Diego, California composed of two towers of equal height. The 41-story towers have a height of 424 feet (129 m) and are a prominent fixture in San Diego’s skyline. Located in the Marina district of Downtown San Diego, Harbor Club was designed by architects BPA Architecture Planning Interiors. The condos are located near the San Diego Convention Center and Petco Park. The towers are currently the eighth tallest buildings in San Diego and were completed in 1992.

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Posted by on Mar 28, 2017 in Jim's Take on the Market, Listing Agent Practices, Thinking of Buying?, Why You Should List With Jim | 2 comments

Food for Thought

Everyone loves Tony, and he is prolific at using social media to inspire people.  I respect what all three guys said below, and I’ll add: Do something!

LINK

For generations past, home ownership was a significant rite of passage that signaled stability, commitment, and, often, prosperity.

But, in this as in so many other cases, millennials are different.

As of 2015, adults under age 35 made up 19 percent of U.S. households but less than 10 percent of homeowners, according to a report released by Harvard University’s Joint Center for Housing Studies.

Entrepreneur and bestselling author Tony Robbins says that, while millennials might be missing out on the social upsides of home ownership, real estate is not the best investment they could be making.

“One of the weakest performers [is] your own personal real estate, because it doesn’t provide much income,” Robbins says. “It’s an inflation hedge. You do a little better than inflation, and you can have your own home, so there’s a psychological, emotional benefit.”

Instead, millennials in a position to buy property should be considering how to do so in a way that will provide them additional cash flow, he says.

“If you can own real estate, real estate with an income is the one [form of] real estate that’s more valuable,” says Robbins.

Opinions on the imperative of millennial home ownership vary.

Self-made millionaire Grant Cardone tells CNBC that home owners are forced to continue to spend unceasingly, and that he regrets buying a house at age 30.

“Unless you have 20 million bucks in the bank, in cash, you have no business buying a house,” says Cardone.

In personal finance classic “Rich Dad Poor Dad,” author Robert Kiyosaki notes that houses should be viewed as a liability, as opposed to an asset, and points out that it’s not a given that a home will appreciate in value.

“I am not saying don’t buy a house. What I am saying is that you should understand the difference between an asset and a liability,” Kiyosaki writes. “When I want a bigger house, I first buy assets that will generate the cash flow to pay for the house.”

Posted by on Mar 26, 2017 in Jim's Take on the Market, Thinking of Buying?, Tips, Advice & Links | 10 comments

Home Buyers – Prepare for Battle

An article from cbsnews.com – get good help!

http://www.cbsnews.com/news/buying-a-home-in-2017-prepare-for-battle/

An excerpt:

“Home buying is about substantive economics, but it’s also got an element of ‘animal spirits,’” said its President Steve Udelson. “In some of the hottest markets, we’ve seen a double-digit run-up in prices.”

The website surveyed 1,289 prospective buyers nationwide, and its findings suggested that most prospective homeowners already had their feet in the starting blocks for the spring selling season. More than half were willing to go beyond their budget — by an average of nearly $38,000 — to get the property they desired.

And like most competitive athletes, they were hopeful as well as scared. Not surprisingly, about 60 percent of those surveyed feared:

  • Bidding wars driving up the price of their dream home.
  • Losing the “earnest money” they put down when they signed a contract.
  • Becoming “house poor,” that is, unable to afford amenities like a meal out in order to make the mortgage payment.

Read full article here:

http://www.cbsnews.com/news/buying-a-home-in-2017-prepare-for-battle/

Posted by on Mar 26, 2017 in Frenzy, Jim's Take on the Market, Market Buzz, Market Conditions, Thinking of Buying? | 2 comments