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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: ‘Thinking of Selling?’

Should Buyers Wait?

Should buyers wait a while to see what happens to the housing market?

Are we just seeing the usual end-of-selling-season malaise when where all of the motivated sellers have succeeded, and just the OPTs are stacking up?

Or has the market shifted…..for good? Is this the peak?

I think it depends on your needs:

  1. Only buying a premium property – then stay in the hunt. In the last downturn, the prices of the premium properties held up well – most had less than a 10% decline in value, and that’s before people started hoarding real estate (not selling for any reason).
  2. Only buying a single story – then stay in the hunt.  The one-story market is red-hot, with demand far out-stripping supply, especially in the newer-home or view categories.
  3. Willing to buy a fixer – be patient.  Buy when you see the appropriate gap of 5% to 10% between the creampuffs and the ones that bark at traffic.  If the home is in original condition, the gap should be larger.
  4. Only want to steal a property – very unlikely in the near-term.  Sellers aren’t that motivated, and only a small minority might consider selling for less than 5% of list.

We should be in a stagnant state for months, as everyone waits to see what happens next spring.  But I think buyers will be similarly picky then too.

We’ll see the same or similar psychology take over the whole country at the same time – which is the way it always happens.  What needs to adjust is the sellers’ trend to expect more than what the last guy got.

Here is a discussion guided by our friend and realtor Tom Stone about the market in Sonoma County (follow the link) – and check the comment section too, where Tom mentions the solution. Hat tip Eddie89!

Link to Full Article on Wolf Street

 

Posted by on Aug 16, 2018 in Jim's Take on the Market, Market Buzz, Thinking of Buying?, Thinking of Selling?, Why You Should Hire Jim as your Buyer's Agent, Why You Should List With Jim | 1 comment

List-Price Increments

 

We see people changing their price by $1,000 or $5,000, and it makes you wonder what they are doing.  They can’t actually believe that it will do any good, can they?

Here’s why they do it. Realtors tend to live off their MLS hotsheet, which is the day’s summary of listing activity.  Every time a listing has a price change, it gets back onto the hotsheet, which reminds agents that it’s still for sale, and to consider showing it again.

But that’s the only reason.  Nobody will be too impressed with a price change unless it is substantial, like 5% of the list price.

Back when houses sold in the $100,000s and $200,000s, a price change of $5,000 or $10,000 was 5% or more. But now that 94% of the NSDCC houses for sale are listed over $900,000, buyers get annoyed if you only change the price by a couple of bucks.

I used to think of pricing in easy-to-digest quarters.  For example:

$999,000,

$1,029,000,

$1,049,000,

$1,079,000

$1,099,000.

But now that we have fewer comps, more listings not selling, and overall buyer exhaustion, we might as well cut to the chase. Besides, it’s hard to know where the values are when they can change +/- $50,000 in an afternoon.

Let’s make it simple and just use two price points (half and full million):

$999,000

$1,049,000

$1,099,000

Today’s pricing is slushy enough that moving in $50,000 increments is a good way to keep a listing fresh and compelling!

Posted by on Aug 15, 2018 in Jim's Take on the Market, Listing Agent Practices, Thinking of Selling?, Why You Should List With Jim | 2 comments

Sell Your Home Now, or Later?

So you’ve heard that the market is a little uncertain right now, and you’re wondering if you should just wait a year or two before selling your residence.

If you don’t mind keeping the home forever, then fine, the value will probably go up in the long run. But if you’d rather get your hands on your tax-free equity in the next couple of years, consider this.

In the strong seller’s market we’ve enjoyed over the last nine years, buyers had to pay the price.  There was enough competition that if you didn’t pay the seller’s price, somebody else would.

But lately we’ve seen the competition dwindle.

Let’s don’t call it a buyer’s market just yet.  Let’s call it neutral.

If buyers feel they have more negotiating power, they are going to use it.  They wait more patiently now, critique the comps more closely, and skip the fixers unless the price gap is appropriate.  Sellers of the fixers got away with selling for just a little under the superior homes, but now the 5% to 10% gap is back.

Once the market has turned that corner, it probably won’t just bounce back to being a seller’s market the next spring.

How do you know if you should sell now, or take a chance?

Sell now if you have good comps.

You’re not going to have better comps next year.  Why?

Because once buyers they recognize a slower market, they are going to dig in on price and only pay the same as the comps, or less.  They will wait patiently for the more-motivated sellers who price close to the comps or just under.  Those are the sales that will be setting the market.

So the best-case scenario is to have next-year’s prices be about the same as today.  So you should sell now while you have the certainty.

Posted by on Aug 14, 2018 in Jim's Take on the Market, Listing Agent Practices, Market Buzz, Thinking of Selling?, Why You Should List With Jim | 3 comments

NSDCC Annual Sales History

When I first saw this graph, I thought it was the perfect way to sum up the changes in the marketplace since the 2000-2009 era.  Back then, people were younger, there were plenty of homes for sale, and prices were relatively affordable, so we always had a very fluid move-up and move-down market.

But to see that average tenure has doubled between 2009 and 2017 is striking.

Have the number of sales changed?

NSDCC Annual Sales of Detached Homes

Year
Number of Sales
Median SP
Annual % Chg in MSP
1999
3,236
$475,000
2000
3,285
$555,000
+17%
2001
2,926
$570,000
+3%
2002
3,717
$630,000
+11%
2003
3,932
$732,500
+16%
2004
3,363
$948,000
+29%
2005
3,014
$1,000,000
+5%
2006
2,626
$985,000
-2%
2007
2,479
$1,000,000
+2%
2008
2,037
$890,000
-11%
2009
2,223
$817,000
-8%
2010
2,461
$830,000
+2%
2011
2,562
$825,000
-1%
2012
3,154
$830,000
+1%
2013
3,218
$952,250
+15%
2014
2,850
$1,025,000
+8%
2015
3,079
$1,090,000
+6%
2016
3,103
$1,160,000
+6%
2017
3,084
$1,225,000
+6%
Medians
3,079
$890,000
+6%

Given the huge change in price and that more people are staying put than ever, it is shocking to see that sales have been relatively consistent in recent years.

How do you explain it?

It must mean that the demand is fueled by those who don’t have a house yet – first-timers, and those coming from out of town. It explains why they jump at buying when they see a good one – they don’t have one yet.  Those who already have a house here aren’t as impressed.

The population has grown 25% in San Diego County since 2000, and 30yr-fixed mortgage rates are about half of what they were then.  But for sales to be this strong when repeat movers are so scarce, is remarkable!

P.S. We’ve had 1,620 closings this year, with a median SP = $1,321,500.

Link to Attom article

Posted by on Jul 27, 2018 in North County Coastal, Sales and Price Check, Thinking of Buying?, Thinking of Selling? | 2 comments

Sierra Vista, AZ

Reader AI mentioned Patagonia and Sonoita in southern Arizona as two good places to consider, but both are really small – about 1,000 people each. Because most of this audience is made up of city-slickers, I picked a bigger town to feature as an introduction to southern Arizona.

Described by “Where To Retire” magazine as a “four-season Arizona gem”, Sierra Vista is the ideal retirement location. With a year-round temperate climate, low cost of living, affordable housing, and spectacular natural beauty, Sierra Vista has it all. To find out how you can come and sample our beautiful community for $199 for 2 people over 3 days, visit www.RetireSierraVista.com

Here’s what $325,000 will buy you – 2,670sf built in 2002 on 1/4-acre:


https://www.realtor.com/realestateandhomes-detail/3710-Camino-Arroyo_Sierra-Vista_AZ_85650_M24488-02390

Posted by on Jul 13, 2018 in Jim's Take on the Market, Thinking of Selling?, Where to Move | 4 comments

Dangers of Overpricing Your Home

Ryan has been running a fantastic real estate blog for years and has double the audience that we have here, so check him out at:

www.sacramentoappraisalblog.com

He gave me permission to run his latest post, and #1 is true – once sellers tell all their friends and family that they are selling, it’s like the list price becomes a fact, rather than a hopeful target:

Overpricing is a problem. You’d think in such a “hot” market that it wouldn’t be an issue, but it is. I’m not trying to dog sellers, but let’s talk about some of the most common pricing mistakes right now. I hope this helps.

1) Getting married to the list price: Sometimes it’s like sellers get married to a lofty list price and become unwilling to budge – even when buyers are refusing to pay that much. It’s as if sellers get paralyzed and cannot move beyond a clearly unrealistic price. My advice? Listen to the market and budge on price as needed.

2) I need this amount to move: I’ve encountered a few sellers recently who priced based on how much money they needed to move. But the market doesn’t care about personal finances or plans. The market only cares about paying a reasonable price for the property.

3) Headlines: At times sellers hear sensational headlines like, “Values are increasing more rapidly than ever,” so they price according to a headline rather than similar sales in the neighborhood market.

4) Out of touch with picky buyers: Buyers these days tend to be more picky than ever about what they purchase, but I’m not sure sellers are really in tune with how finicky buyers are about price, location, and condition. You’d think buyers would be so desperate to get into contract and pay anything because of a housing shortage, but they’re actually quite patient in many cases because they want to wait for the right property and feel like they’re paying a fair price. My advice? Price for real buyers in the neighborhood market rather than that one mythical “unicorn” buyer who is going to pay more for some reason.

5) Sales instead of comps: The most common pricing mistake I see is pricing according to a sale down the street that really isn’t comparable. So a seller says, “I know that house is totally remodeled with a pool, but someone’s going to pay the same amount for my house.” My advice? Price according to similar homes that are actually getting into contract rather than dissimilar properties. Be careful about hijacking price per sq ft figures too.

6) The fallacy of summer: We hear that summer is the hottest real estate season, but the spring season is actually the hottest in many markets throughout the country. By the time summer rolls around the market is actually beginning to cool because it’s been hot for almost two quarters already. During summer listing volume is just about to peak for the year, and that means it starts to take longer to sell, prices often begin to soften for the season, and buyers gain more power to negotiate. My advice? Be realistic about prices today.

7) Zillow: I can’t tell you how often I’ve heard, “But Zillow says my house is worth X amount.” I know, Zillow says stuff like, “We’re only a starting point and a ballpark figure.” Yet in my experience sellers rely heavily on the Zestimate and very often treat it like a definitive ending point rather than a ballpark. Remember, Zillow doesn’t know anything about condition, upgrades, smell, etc… Sometimes Zillow nails the value, but other times it’s off by a substantial amount – even in a tract neighborhood. My advice? Take “The Big Z” with a grain of salt.

8) Other: What else are you seeing out there?

I hope this was interesting or helpful. In light of the market beginning to cool for the season, I thought scratching out these thoughts might be helpful and even save sellers some money (and heartache).

Questions: Which mistake do you see most often? Any stories or insight to share? I’d love to hear your take.

Link to His Comment Section

Hat tip to Ben who alerted me to this post!

Posted by on Jul 8, 2018 in Jim's Take on the Market, Market Conditions, Thinking of Selling?, Why You Should List With Jim | 10 comments

#vanlife

While we’re discussing where to move, let’s note that you don’t have to buy another home – although I recommend it!  Here’s an example:

Until six years ago, Melody Shapiro never imagined herself living out of a van.

She hasn’t fallen on hard times, nor has she pivoted into a new career as an Instagram celebrity posing next to her Volkswagen Westfalia and posting selfies from national parks.

After retiring from her job as a psychotherapist in 2011, the idea of living on the road and off the grid began to sound like the dream life for the 73-year-old from Hood River. So she went online to figure out her options.

That’s when she found Outside Van, a Portland-area company that turns Mercedes Sprinters from utilitarian cargo vans into mobile camping palaces.

For $140,000, Shapiro bought a customized Sprinter, equipped with four-wheel drive, solar panels and a queen-sized bed. She speaks excitedly of traveling across the country, unplugging from the outside world, and getting lost in the splendor of the Wallowas and the canyons of southern Utah.

“I like to travel to more remote areas,” she says. “The way it’s set up lets me pull into anywhere and live off the grid without power for four or five days. The high [ground] clearance lets me go just about anywhere. I love the freedom of that.”

Now, Shapiro is living what social media aesthetes have dubbed “#vanlife.”

Read More

Posted by on Jul 7, 2018 in Jim's Take on the Market, Thinking of Selling?, Where to Move | 4 comments

Local Predictions for 2018 – Update

We’re halfway through 2018 – let’s check on the predictions.  Here is where Rob Dawg, Franklin Jones, Ash, and myself guessed what would happen this year:

http://www.bubbleinfo.com/2017/12/27/2018-predictions/

My thoughts in December for 2018, plus extra stats:

I guessed earlier that NSDCC detached-home sales will drop 5% in 2018 – but that would still give us around 3,000 houses sold, which is a healthy amount, given that rates and prices are both expected to be higher.  The median sales price, full of imperfections, should keep rising, and I’ll guess +5% in 2018.

Those same factors, plus a few more boomer liquidations, could also create a bull rush frenzy, with intense wrangling for decently-priced houses listed under $1,500,000.  With more inventory, we could approach 3,200 sales again (3,084 NSDCC houses sold in 2017) .

The higher-end market is challenging too, but in the opposite direction.  Today there are 374 NSDCC houses for sale listed over $2,000,000, and we sold about 50 per month in 2017.

We ended the year with 62% of the houses for sale between La Jolla and Carlsbad being priced over $2,000,000, with a median list price of $2,495,000 overall.

We had 10% fewer listings in 2017 than in 2016, but 2% more sales!

Where are we now?

First-half NSDCC sales are down 11% year-over-year.

Median list price today is $2,295,000, which is down 9%, compared to December 27, 2017.  Of the 935 houses for sale, 55% of them are priced over $2,000,000.

The 2017 NSDCC median sales price was $1,225,000, and the median sales price has been $1,325,000 for the first half of 2018, an 8% increase.

We’ve sold 317 houses over $2,000,000 in 2018, or about 53 per month.

Although we had 10% fewer listings last year than we had in 2016, we have had 9% more listings this year than in the first half of 2017.

Nine percent more listings, but 11% fewer sales?  Expect that buyers will become increasingly picky – there are plenty of houses to go around!

Posted by on Jul 5, 2018 in Inventory, Jim's Take on the Market, Market Buzz, Market Conditions, North County Coastal, Sales and Price Check, Thinking of Buying?, Thinking of Selling? | 3 comments