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Category Archive: ‘Why You Should Hire Jim as your Buyer’s Agent’

Seller & Buyer Testimonial

A key point here is that the local neighborhood experts gave them no chance of selling for the price they wanted, even after making improvements.

It sold for full price, on the first day:

Many thanks to our clients for doing this!

Posted by on Sep 3, 2017 in About the author, Bubbleinfo Readers, Bubbleinfo TV, Jim's Buyer Representation, Jim's Take on the Market, Remodel Projects, Repairs/Improvements, Thinking of Buying?, Thinking of Selling?, Why You Should Hire Jim as your Buyer's Agent, Why You Should List With Jim | 3 comments

The Big Stagnation


On the Facebook bubbleinfo, in response to the idea that the bubble won’t be bursting, Matt asked ‘what constitutes the big stagnation when it happens’.

My response:

The Big Stagnation? You’ll know it when you see it.

We used to consider 6 months’ of inventory to be normal, but the new norm is probably 3 months with most of San Diego being 1-2 months today. Rancho Santa Fe is our exception, and has 8 months’ of inventory currently (only because there was a slew of sales last month). I think we can consider stagnation being any market with more than 6 months’ worth of inventory, and/or 100+ average days on market (Avg. DOM in RSF now 129 days).

When the market slows, most of the homes not selling can be explained – bad locations, inferior condition, etc.  Start worrying when you see houses that have it all, including a decent price, not selling.

Other outside influences that might cause the market to stagnate include:

  1. Mortgage rates get back into the 5s. Rates have been under 5% since the end of 2009, which seems like a million miles ago.  Buyers would want to stall their plans for at least six months to see if sellers would compensate by lowering their price.
  2. An occasional bad comp.  This happens today when a lowball sale occurs (usually an inside job), and buyers and sellers wonder if it is real.  Because there is usually scant information about it, the bad comp ends up being a mystery, and we forget after a few months, but another seller has to go first to prove it was an anomaly.
  3. Immigration is halted.  This would have seemed impossible up until a few months ago, but if it happened, we could feel a significant impact on the demand side.
  4. Recession hits locally.  An economic slowdown may not bring more supply right away because those out of work would wait 1-2 years before they believed they couldn’t get another job, and decide to move.  A more immediate impact would be felt on the demand side – we’d be losing buyers right away.

The prime reason for a market stagnation is the resistance that sellers and agents have about lowering their price – they would rather wait and see if it will be different tomorrow.

We might see a 5% or 10% drop without much fanfare, because most every seller around here has gained more than 30% appreciation since 2009 and wouldn’t feel it much.  They might give up a couple of bucks, but if a heavy discount is needed to sell, they will dig in.  It is very likely that the only reason they are selling is to hit the big-money jackpot.

A stagnant market could last for months or years – they tend to last until people subscribe to the fact that price will fix anything!


Posted by on Sep 2, 2017 in Jim's Take on the Market, Market Conditions, Thinking of Buying?, Thinking of Selling?, Tips, Advice & Links, Why You Should Hire Jim as your Buyer's Agent, Why You Should List With Jim | 2 comments

No Chance of Bubble Bursting

I was asked yesterday about the chances of the bubble bursting.

My answer was, “No chance”.

But these things run in cycles, and eventually won’t the market will cool off?

Yes…..some day…..and when it happens, our market will stagnate, rather than see prices decline.  Sellers would need to be desperate to sell for less, and there are too many other alternatives and stop-gaps in place now to prevent desperation.

A. Reverse mortgages – The H.U.D. backed down the loan-to-value last week, but for anyone who is 62 or older, the reverse mortgage will be a viable – though costly – alternative to selling and moving. The average borrower at current interest rates will be able to borrow roughly 58% of the value of their home, down from 64%, and allows them to take the equity out of the house through lump-sum withdrawals, regular payments, or a line of credit.  The loan does not need to be paid off until the borrower dies, sells the house, or moves.

What about the younger, working folks who don’t qualify for a reverse mortgage and could be impacted by the next recession?

B. The foreclosure rules have changed, and the banks would rather let you slide, than kick you to the curb.  Don’t feel like making your payments for months or years?  No problem, just send in what you can, and they will kick around your loan-mod application until things get better.

Want to sell quick?

C. Discount your price 20% to 30%, and a flipper will cash you out in a week.  But that doesn’t tank prices, because the flipper will apply some lipstick and sell it for retail in the next 2-3 months, keeping the neighborhood values afloat.  Could flippers get stuck with some dogs?  Yes, but they are flush and full of ego – how many do you see already who just keep re-freshing their listing at the same price, and holding out for those six-figure gains?  Plenty.

Don’t want to discount?

D.  There are thousands of realtors who will take your listing at any price and hope for the best.  This is how the market will go stagnant – and Rancho Santa Fe is the example, where today there are 213 houses for sale.  They just wait for someone to come around and pay the seller’s price.

The best reason of all for why our housing market won’t burst are the high rents.  If the next recession hits hard, and distressed homeowners think about cashing out, they need to leave town to make it worth it.  If they want to stay in the same neighborhood, the rents are so high that it makes more sense to stay put.  Remember how the layoffs at Qualcomm caused a big concern around Carmel Valley?  Yet prices haven’t tanked – and the 92130 has 85 active listings and 61 pendings today.

Everyone who financed a purchase in the last few years had to qualify through strict guidelines, and, as a result, the affluent have ruled the market.  They won’t get the jitters if the ride gets bumpy; no, they are in for the long haul.

Stagnant City is the worst that will happen.


Posted by on Aug 31, 2017 in Jim's Take on the Market, Thinking of Buying?, Thinking of Selling?, Why You Should Hire Jim as your Buyer's Agent, Why You Should List With Jim | 12 comments

One-Story vs. Two-Story

The other day, an appraiser mentioned to me that he had just completed a study comparing the prices of one-story houses vs. two-story.

He had done a similar study ten years ago, and found that the premium being paid for a one-story then was about 5%.

Today, he found that the premium is about 14% – more than double!

We speculated whether it would double again over the next ten years.  When you consider how short the existing supply of one-story homes is today, and that builders are still addicted to the two-story model, it is pretty easy to guess the premium will increase further!

Here’s a sample of houses sold between La Jolla and Carlsbad this year.

NSDCC Houses Between 2,500sf and 3,500sf Sold 2017 YTD

# of Stories
# of Sales
Avg SF
Avg $$/SF
Median SP

You can get a better ‘deal’ on a two-story home, but as boomers get older and unload two-story houses, that market could get glutty, and the quality one-story houses be even more sought-after.

Posted by on Aug 28, 2017 in Jim's Take on the Market, Market Conditions, One-Story, Thinking of Buying?, Why You Should Hire Jim as your Buyer's Agent | 7 comments

Our Clients’ Experience 2

I appreciate our clients who are willing to go on camera to express their thoughts about their experience – thank you Eddie89!

A key point for buyers in a bidding war is to know when to increase your bid, and by how much.  I help you determine which houses are worthy of a higher bid – and most aren’t, so you will lose a few!

Posted by on Aug 27, 2017 in About Kayla, About the author, Bubbleinfo Readers, Jim's Take on the Market, Klinge Realty, Thinking of Buying?, Why You Should Hire Jim as your Buyer's Agent | 2 comments

Dumbing Down of Real Estate

It’s not just Redfin, most other agent teams are known to have newer realtors on the front lines these days.  Another start-up gives the lockbox code to buyers so they can take their own look around.  A recent survey showed that 1/3 of buyers are making offers on houses they haven’t seen in person!

Experienced agents are doing less and less, and in some cases, they aren’t involved at all.  We are being told that it’s good for the consumer too, because now they get to interact with ‘specialists’ for each phase.

But it appears that consumers may not care that much about getting good help!

Hat tip to GW and MF who both sent this in:

Of those surveyed, 42% of buyers regret the size of home they bought – but only 15% wish they had more information?!?!?!  You have to be kidding!!

Are consumers watching a few HGTV real estate shows and then wandering into their real estate experience thinking they know enough?  It appears so!

Good or lousy help costs the same – but the other prices you pay could be huge!

Posted by on Jul 17, 2017 in Jim's Take on the Market, Why You Should Hire Jim as your Buyer's Agent, Why You Should List With Jim | 0 comments

‘Perfect-House’ Characteristics

Of all the blog posts here, this one gets the most hits by random searchers.

Here it is unchanged from November, 2011:

Punky asked about what to look for in that “awesome I got everything going for me” house.

These thoughts are culled mostly from conversations with our buyers, personal observations, multiple bidding wars, with an emphasis on investment value and some anticipation of future trends:

 1.  Location – Because buyers are looking long-term, the flight to quality has never been so active.  Buying the best location you can afford will never go out of style. Being in a great school district is smart, even if you don’t have kids.

2.  Light and Bright – South-facing homes with ample windows that allow full sun are much preferred.  You may have to provide shade in the summertime, but you’ll save on heating bills in winter and overall have a sunnier disposition than those who live in a cave.  There will be more push towards solar panels at home, and they prefer a south-facing roof.

3.  Walkability – Being able to walk to shops is convenient, but also walking for exercise is smart too.  Does the location encourage you to walk more?  If so, I think buyers will consider it a preferred location, and might pay a little more.  If it’s close to the foothills, the mountain bikers will dig it.

4.  Security – Does the location make you feel safe? People already have concerns about their safety, and those could get worse in the future.  Is it a secluded spot?  Can anyone sneak up on you from behind?  Do the neighboring properties help or hurt?  Tracts with smaller lots can provide a ‘safety in numbers’ feeling.

5.  Privacy – No homes looking in, especially not looking down on you from above.  Up-slopes are acceptable as long as there is ample distance of flat area in between, and the houses above are set back so you don’t see them much.  The worst are the example shown at Viridian, where the house/stucco wall behind you is about 5-10 feet higher, and 20-30 feet away – it is an unsettling feeling.

6.  One-Story – My personal preference, and they are selling for an approximate 10% premium.  If you’d rather have a two-story, and then run into trouble later with stairs, know that you can always add an elevator – look for spots where you can devise a landing upstairs.

7.  Floor Plan – The most desirable houses are those with big open rooms that flow.  This can be fixed with an open checkbook, so use your imagination.

8.  Indoor/Outdoor Entertaining – For those who entertain, this is a big feature.  The outdoor kitchens are very popular, but just having a decent spot for a BBQ can satisfy many.

9.  ‘Visual Openness’ – Having a view is nice, but you should be guarded about how much premium you are paying.  The coast is so socked in with fog ‘marine layer’ these days that you’re not going to see the ocean much, so the very max I would pay is $100,000 extra for the best ocean view – and it drops off in a hurry.  Most people are satisfied with having something pleasant to look at, so if you can see beyond the backyard, then the resulting night-light view gives you a 24-hour view of something.

10.  Guest Suite – A downstairs bedroom/bath can usually double as a den/office area, but the primary use is for guests – especially the in-laws.  Having it separated from the rest of the house is ideal, and it doesn’t have to be detached.

11.  Great Room – Having the kitchen/family room combo is imperative, and money can fix.  Includes a big-screen TV that you can see from the kitchen sink.

12.  Style, Character, ‘Pizazz’ – These are hot features for selling, and can be added easily.

13.  Three-car Garage – Otherwise known as the California Basement, the third-car garage usually hold people’s junk.  Why people insist on having so much junk is another topic.

14.  Master with Walk-in Closet – This item is imperative for the ladies; guys could live with a gunnysack or cardboard box – or with leaving their clothes on the floor.  It is probably an efficiency thing – being able to see the available selections probably makes it easier to choose, especially with shoes.  A window, or ample lighting in the closet is a plus.

15.  Game Room – If you have teenagers, a separate room is better for video games.

16.  Cul-de-Sacs – I can do without the screaming kids, but cul-de-sacs are a big boost for re-sale.

17.  Green – Good for energy efficiency/cost savings, but not many homebuyers will spend crazy money here – I wouldn’t pay more just because a house has solar panels.  Being self-sufficient and off the grid is a big draw, but paying the right price for the house is #1.

Things to avoid:

1.  Extra-large backyards – They cost too much to maintain and you don’t use them enough.  My rule-of thumb still stands – if you can mow the lawn in less than a half-hour, you’re good.

2.  Pools are also out, especially at the coast – The weather is not hot enough that you will use them much (unless you swim for exercise), plus they take up too much of the backyard.

3.  Overgrown trees – If they are more than 20 feet tall, they’re probably too big and messy, and people are afraid that they’ll fall on the house.  People close to the coast would rather have sunlight.

4.  Condos – Unless they have exceptional other features, it’s better to rent, due to the difficulty in obtaining mortgage financing.

5.  High monthly fees – How long will it be before we see Occupy Mello-Roos?

6.  Three or more levels – Two-story is the max.

7.  Linoleum, single-pane windows, formica, 8-ft ceilings, etc. – all the old, dated stuff.

8.  Power lines nearby – Perceptions are particularly negative, whether accurate or not.

9.  Double-yellow-striped streets – Perceived as too busy, whether they are or not.

10.  Noise – Freeway, street, airport/jets, skateboards – not only are they a turnoff to potential buyers, they might drive you crazy.

11.  Close to a high school – The kids drive too fast, and don’t have respect.

The key is to find the right blend of ingredients for your particular needs.  If you can find most or all of the above, you will have an enjoyable house that will re-sell easily!  Focus on buying a house that already has items that money won’t fix (items 1-6 at top).  Your agent should be an expert at evaluating, and balancing the mix!

Early in the hunt, surrender to the fact that whatever house you end up buying, it will most likely need repairing/updating/remodeling – plan to spend $25,000 to $50,000 after closing.

Here are other links:

Trophy Properties:

Housing Trends of Future:

Posted by on Jun 1, 2017 in Jim's Take on the Market, Why You Should Hire Jim as your Buyer's Agent, Why You Should List With Jim | 3 comments