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Jim Klinge
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Are you looking for an experienced agent to help you buy or sell a home? Contact Jim the Realtor!

Carlsbad
(760) 434-5000

Carmel Valley
(858) 560-7700
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Category Archive: ‘Thinking of Selling?’

Total vs. Active Inventory

This is the sddt.com reporting on Zillow’s report measuring the change in velocity, but neither company includes any help with interpreting:

The number of house for-sale listings in San Diego was down more than 25 percent in June from June 2012, according to Zillow.

However, San Diego had one of the highest degrees of year-over-year inventory improvement between January and June.

The number of San Diego listings on Zillow was down 25.6 percent in June from last year, compared to a 40.5 percent decline in January. Inventory of for-sale homes on Zillow improved by 14.9 percentage points between January and June, controlling for seasonality.

Among the 30 largest metro areas covered by Zillow, those with the highest degree of year-over-year inventory improvement between January and June include Phoenix (31.9 percentage point improvement); San Diego (14.9 percentage point improvement); and Minneapolis (13.5 percentage point improvement).

Inventory shortages worsened between January and June in 29 metro areas overall, and in 11 of the top 30 largest metros. Large metros where inventory constraints have tightened the most since the beginning of the year include Las Vegas (-21.8 percentage point worsening); Chicago (-12.3 percentage point worsening); and Washington, D.C. (-9.8 percentage point worsening).

They are solely measuring the inventory of active listings, and leaving the impression that fewer people are selling. But that’s not true – we already saw that the number of listings in San Diego County this year was about the same as last year. Let’s narrow the focus to NSDCC houses.

The number of listings of NSDCC detached-homes between Jan 1-June 10:

Year
#Listings
Avg SF
Avg LP/sf
Avg SP/sf
DOM
#Closed Sales
2011
2,745
3,260
$449
$372
107
1,112
2012
2,249
3,347
$445
$375
85
1,226
2013
2,446
3,369
$503
$412
34
1,410

The number of listings is +9% higher this year than last year. When you hear that inventory is low, it’s because more homes are selling (+15%), leaving fewer actives.

We should see the gaps in the Y-O-Y comparisons start to moderate, just because the market picked up in the mid-to-late summer months of 2012. The media will think the sky is falling, but keeping an eye on the total number of listings, instead of just the actives, will add to our education. P.S. There are 561 contingent and pending listings too!

Posted by on Jun 14, 2013 in Inventory, Thinking of Buying?, Thinking of Selling? | 1 comment

Investors Slowing

bsNEW YORK — Blackstone Group LP, which has spent $5 billion to acquire almost 30,000 U.S. single-family houses, is nearing the later stages of its buying as home prices jump, said Jonathan Gray, the firm’s global head of real estate.

The market has become more “challenging” as competitors enter the business of buying homes to rent out, Gray said Monday.

Blackstone (NYSE: BX), based in New York, has acquired houses in 13 metropolitan areas and is continuing to make purchases, he said.

“For our type of capital and the returns we hope to generate, my guess is we’re in the later stages of this,” Gray said. “That does not mean the housing recovery itself will not continue for a number of years.”

Blackstone is the largest of the private-equity companies taking advantage of the foreclosure crisis to build portfolios of single-family homes to rent, helping to diminish supply and drive up real estate values in some areas.

U.S. home prices jumped 10.9 percent in March, the most in seven years, according to the S&P/Case-Shiller index of 20 cities.

Blackstone’s purchases represent a fraction of the U.S. housing market and rebounding prices are the result of basic supply and demand,

Gray said. U.S. population growth has outstripped homebuilding because property prices aren’t high enough to spur new construction, creating a shortage, he said.

“There are about 150 million homes in the United States,” Gray said. “We own about 29,000. In the last year, there were 5.6 million homes bought and sold. Of those, we were 24,000. We are a very small percentage.”

The housing recovery is “midstream,” with the eastern part of the U.S. representing good value, Gray said.

National prices are still down about 28 percent from the 2006 peak, according to the Case-Shiller index.

From sddt.com

Posted by on Jun 12, 2013 in Flips, Market Conditions, Thinking of Buying?, Thinking of Selling? | 3 comments

Open House Wrap-Up

Here’s a summary of today’s open house.

I had at least 40-50 people stop in, including 11 realtors.  Most were familiar with the model-match house that just went pending 100 yards away – and who raised their price from $640,000 to $660,000 at the same time.

My listing is priced at $649,900 – scroll down to previous post for tour:

Posted by on Jun 8, 2013 in Bubbleinfo TV, Thinking of Buying?, Thinking of Selling?, Why You Should List With Jim | 1 comment

“Great Time To Sell”

For real estate scoop these days, the media goes to the same three places.  But the guy at Trulia is too high up in his ivory tower, and Redfin gets conflicted between reporting market data and creating new gimmicks.

However, Spencer Rascoff of Zillow is right on the money – from cnbc.com:

Against the backdrop of increasing home prices and the prospect of much higher mortgage rates, it’s a “great time” to sell, Zillow CEO Spencer Rascoff told CNBC on Thursday. That is, if you can find a place to buy, he added.

“As mortgage rates inevitably come from 3 percent up to 5 or 6 percent, it’s going to create problems down the road,” Rascoff said in a “Squawk Box” interview.

The average rate for a 30-year fixed rate mortgage punched through the 4 percent level this week for the first time in a year, according to the Mortgage Bankers Association.

“If you have any equity in your home and you’re thinking about selling in the next couple of years,” he continued, “[it's] probably best to sell now, even though home values are continuing to rise.”

“Imagine yourself buying a $300,000 home today, and in four years you may want to trade up to a $500,000 home,” he said. “That home is not just that much more expensive—but because mortgage rates are going to be higher—it’s significantly more expensive. So the trade-up market is going to be very troubled in a couple of years.”

“This is not today’s problem,” Rascoff added, saying today’s real estate market problem is a “big supply-demand imbalance: huge demand driven by low mortgage rates and investor purchasing [of] distressed properties. But very limited supply.”

The reason for the limited supply is that “44 percent of Americans with a mortgage are effectively in a negative equity position,” he said. “Meaning if they sold their home, they wouldn’t be able to clear their mortgage. They’re basically trapped in their home and can’t list.”

“So very little supply and significant demand. That’s driving price spikes,” he said. “You’ve seen six months of greater-than-5-percent appreciation rates. It’s the longest streak of greater-than-5-percent appreciation rates since the [housing] bubble.”

Last week, the S&P/Case-Shiller 20-city home price index for March showed a 10.9 percent increase in housing prices from a year ago.

“We’re now seeing unsustainably high rates of appreciation,” Rascoff said. “In Phoenix, in San Francisco, in Orange County and San Jose, [Calif.], 20-plus percent year-over-year appreciation. Far too high. We’ve come back too fast. It’s concerning.”

Posted by on Jun 6, 2013 in Thinking of Selling?, Why You Should List With Jim | 15 comments

Homebuyers’ Price Anxiety

As sellers hold their grip on the market, buyers are starting to understand what it’s going to take to stay in the game, according to responses in Redfin’s second-quarter Real-Time Home-Buyer Report.

After speaking at length with the buyers, it was determined that although their understandable frustration concerning the low amount of inventory continues to rise, there is an equal elevation in their individuals awareness and recognition of the seller’s market, as well as an overall willingness to actually pay more out of pocket for purchasing real estate.

The report goes on to predict that the prices of property will only continue to escalate, yet likewise finds that the majority consensus of the concern when it comes to an overall stability in the nation’s economy are actually lessening as times goes on.

The following represent the majority sentiment and perspectives of homebuyers questioned:

  • The consensus that is emerging is that the present market is most definitely shifting into a seller’s market with statistics showing that a scant 31 percent of homebuyers actually are of the opinion that it is a good time to buy in their local areas, this finding down from the recent 40 percent.
  • Further supporting this sentiment is the 67 percent of interviewees that consider this a prime time to sell (up from a previous 48 percent).
  • Although the market is showing itself as a seller market, an astounding amount of homebuyers interviewed are revealing their increasing willingness to pay more as the prices continue to rise, most of this eagerness or accommodation appears to be a direct result of the staggering low inventory that has presented on the market this quarter.
  • One percentage that remained static within this quarterly report was the amount of homebuyers who are already preparing for continued pricing increases on the market. It would appear that 23 percent (just up from 22 percent last quarter) are acutely aware and ready for continued hikes.
  • In light of this belief, the rising prices in the market are not only becoming a topic of discussion, but are morphing into an increasingly common concern, with 48 percent of homebuyers polled presenting great anxiety on this issue.

The bottom line of Redfin’s findings points to a few, clear conclusions: homebuyers are frustrated with the low inventory availability on the market, they are growing weary of the increasingly cutthroat competition within the market, and they are unhappy with the current rate and pace at which the homes themselves are selling.

The data for Redfin’s analysis was extracted from interviews conducted with over 1,350 actual homebuyers from 22 metropolitan markets in the U.S, all having recently toured Redfin homes for sale.

http://www.dsnews.com/articles/report-finds-67-of-buyers-believe-market-has-shifted-toward-sellers-2013-05-24

Posted by on May 27, 2013 in Thinking of Buying?, Thinking of Selling?, Why You Should List With Jim | 6 comments

Duration of Frenzy

A frequent question is, “How long will it last?”.  It depends on how long the demand lasts, which at this point appears to be deep and wide.

There are sectors of today’s buyer pool that are still waiting for their shot:

1. Low-Down-Payment buyers.

You can be well-qualified and have no trouble getting any mortgage you want – conventional or FHA/VA.  But if your offers include a smaller down payment and you end up in a bidding war, you are going to lose.

Listing agents tell the sellers that it is safer to take a cash, or big down payment deal, even if it means taking less money overall.

As a result, the low-down buyers are still waiting in the wings.

Here are the percentages of detached-home sales each quarter that were financed using FHA/VA/CalVet loans in San Diego County, and NSDCC:

graph (30)

You can see how tough it is on those with low down payments!

2.  Move-Up Buyers

Many move-up buyers are still waiting, but for different reasons.

If you want to use the equity in your current house to buy the next, good luck making an offer contingent on selling your home.  Those offers go behind the low-down-payments, and you won’t even get a call back.

But if you can figure out how to finance the next purchase without selling, then you still have to find a home good enough to make it worth it, AND be willing to pay enough to win the bidding war.

My rule-of-thumb is that you have to spend 50% more on the new home to make it worth the hassle and expense of moving.  A 50% bump causes these buyers to be pickier than those who don’t own locally yet, and whose desperation level is a tad higher – the “homeless” buyers are inclined to pay more than those who are somewhat comfortable with their current house.

3.  Empty-nesters

According to the census, there are roughly 368,539 people in San Diego County over 67 years old.  Today, there are 1,553 single-story homes for sale – in the county!

Every year that goes by, more baby boomers are thinking about down-sizing, and all deserve to be in a single level.  But they will have to wait, and eventually many will give up and do the stay-in-place aging just because the supply is so limited.

4.  Buyers Who Are Too Busy

You have to devote a major search effort to find the right home, and to make you comfortable enough to bid high enough to win.  The speed at which homes are selling is increasing!

Here is the graph of national stats:

marketspeed

In San Diego it’s faster – 30% of April sales found a buyer in the first week, and 49% found a buyer in the first two weeks!

We will have a very active market place for some time to come – my guess is for at least 1-2 years, and probably longer.  Prices will ebb and flow, but demand and sales should be very strong.

Posted by on May 24, 2013 in Frenzy, Market Buzz, Market Conditions, Thinking of Buying?, Thinking of Selling?, Why You Should Hire Jim as your Buyer's Agent, Why You Should List With Jim | 6 comments

Peak Frenzy?

What makes me think the frenzy is slowing down?

1.  List prices have gone from ‘exuberant’ to “hit-the-lotto” range, generally speaking.  Have you seen it too?  It’s not enough to just get more than the last guy, some sellers list so high that they must be thinking of funding the retirements of them and the kids!

2.  The days-on-market statistic is dropping, but we are into dizzying warp-speed now – it can’t get much faster. 

Here are the DOM for NSDCC detached-home pendings/solds for each month (DOM stops when marked pending, so the DOM is the same whether the listing is marked pending or sold):

Avg Days-On-Market NSDCC Under-$1,000,000

Jan: 48

Feb: 34

Mar: 34

Apr: 30

May: 21

This has to be the peak DOM, doesn’t it? 

3.  The last big pricing upsurge was in 2003, and even though they were giving mortgages to anyone who could fog a mirror, the intense frenzy only lasted about a year – the pricing leveled off to minor increases starting in 2004.  There should be a natural limit on increasing prices – how much can buyers endure?

4.  The gap between fraud and flip is getting larger, which should throw logical buyers back to the sidelines.  You see it every day – and well, here are two new listings today of similar houses in the same neighborhood with nearly 20% price difference:

Five-second listing -  2,876sf asking $562,600:

http://www.sdlookup.com/MLS-130024262-3453_Ravine_Dr_Carlsbad_CA_92010

Flip – 2,476sf asking $669,900: 

http://www.sdlookup.com/MLS-130024357-3429_Moon_Field_Dr_Carlsbad_CA_92010

At some point, don’t buyers start to hesitate when they see these shenanigans?  They should, because it isn’t right – and unfortunately for the legit flipper, it is he who could be harmed.

Just like when the boom started out of nowhere last year (right before the election too!), it is likely that the frenzy will slow….or stop…without notice.

(I’ll add more later)

Posted by on May 13, 2013 in Frenzy, Short Sales, Thinking of Buying?, Thinking of Selling? | 2 comments

Home-Selling Tips

From the mercurynews.com:

housesellSelling your home? You can get the best possible price if you know how to negotiate.

From truly understanding the market to figuring out what moves prospective buyers, it pays to be part detective, part psychologist and completely realistic.

Here are a series of tips to help you negotiate the best price when you sell your home:

1. Understand your market. Your home is worth the most someone is willing to pay for it. Or the least.

The best indicators of the price your home could fetch are actual sale prices (not listing prices) of similar homes in the immediate area during the past few months, says Ron Phipps, principal broker with Phipps Realty in Warwick, R.I., and past president of the National Association of Realtors. Nearby sale prices are called comparables, or comps for short.

Comparable homes are roughly the same age and square footage with the same number of bedrooms.

Read More

Posted by on May 12, 2013 in Thinking of Selling?, Tips, Advice & Links | 0 comments

Hiring A Realtor

The real estate industry is known for its gimmickry, and is ripe for internet hucksters who put their own twist on it.

SD_Coastal sent in this latest attempt – an internet-referral company who has realtors who will discount their commission by 50%.  Towards the end they slip in that you have to sell AND buy a house to get the package deal:

1.  This is one of the most important decisions of your life – choosing a realtor solely based on their commission structure during a frenzied-up market is asking for trouble.

2.  The real estate industry doesn’t want to help you figure it out – rarely do you see any guidance on how to select a realtor from those in the business.

3.  If you only ask one question of your realtor-candidates, ask how many homes they have sold this year.  It is by far the best gauge to determine if they have adequate experience with navigating these choppy waters, and can help you too.

Don’t ask a yes or no question – ask specificially “HOW MANY SALES?”, and if they have closed at least one sale per month then they something to offer – and it would be smart to ask more questions to find out what.

4.  Most every agent will offer you a package deal if you sell-then-buy, but you’ll probably have to ask for it.

Get Good Help!

Posted by on May 9, 2013 in Thinking of Buying?, Thinking of Selling?, Tips, Advice & Links | 16 comments