Here’s our new listing of a luxurious 2,679sf single-story home with view in gated Windemere at the top of Mt. Soledad in La Jolla! Extensively upgraded kitchen that combines nicely with family room for full size great room with views, plus a private outdoor experience in back.
With our tight inventory and ultra-low mortgage rates, it kinda feels like Tesla stock. One minute you’re in the $800s, and the next thing you know, the same house is in the $900s!
What can buyers do?
Don’t buy crap.
Simple enough, right?
But it’s hard to accomplish both, because the best locations have the oldest homes.
Let’s narrow it down further.
If you can afford a decent location, what else can a buyer do to ensure a smart purchase?
Buy a newer home, and/or buy a one-story home.
Newer: Homes built in the last 15 years typically have modern floor plans with a large open great room and lots of windows that allow for ample natural light. When you go to sell it someday, it will still be a desirable home without a load of upgrading or maintenance costs to you.
One-Story: Boomers aging in place guarantee that the scant supply of one-story homes will stay tight, and those that do leak onto the open market will be hotly contested.
Here’s a good example.
This sold for $850,000 two years ago, and after a complete remodel it goes on the market for $1,149,000…..and they get multiple offers. Those who thought they could still buy a nice house in Old La Costa in the $800,000s are really scratching their heads now! But it had the good location, and the sellers added the new look to clinch a nice boost in value.
If you want to stick with a newer house and/or a single-story house, what are your chances?
# Built Since 2005
# One-Story Built Since 2005
0 – $1M
$1M – $2M
$2M – $3M
Buying a newer home or a single-story really looks daunting now, but if you can pull it off, you got it made!
Insisting on a newer home and/or a one-story home will give you maximum assurance that you’ve made a smart buy that will appreciate better than the rest. We can add a few older homes that have been thoroughly remodeled, but they probably still have a floor plan cut up into smaller rooms with low ceilings.
So you’ve heard that the market has slowed a bit, and you’re wondering,
“Should I sell now, or wait it out?”
If you don’t mind keeping your 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:
Over the last ten years, we’ve enjoyed a strong sellers’ market where buyers just paid the price. There was enough competition that if you didn’t pay the seller’s price, somebody else would.
But the competition has dwindled lately – there aren’t as many buyers looking.
Let’s don’t call it a buyer’s market just yet. Let’s call it neutral.
Buyers feel they have more negotiating power now, which means they are:
Tougher on price.
Expect more repairs.
Blow out easier if they aren’t satisfied.
The real struggle is with homes that need work – buyers are passing on the fixers altogether unless the price is right. Sellers used to get away with selling a rough-looking home for just a little less than the superior homes, but now the 5% to 10% gap is back (or more).
Once the market has turned that corner, it probably won’t just bounce back to being a seller’s market – it’s more likely to stay neutral.
How do you know if you should sell now, or take a chance?
Here are ways to decide when to sell:
Sell when you know where you are moving.
Sell when there are strong comps that support your desired price.
Sell when your house looks spectacular.
Sell when nobody else is, or at least when you are the best-priced home of the competition.
If there’s a moment when all four are happening, then you know it’s time – do it!
Could the comps get better next year? Maybe – it only takes a couple of real premium properties to sell nearby and you could add 5% to 10% in value within a few months. But it could go the other way too.
Once buyers they recognize a slower market, they will only want to pay the same as the comps, or less. They will wait patiently for the highly-motivated sellers who price their home closer to the comps – or wait until you lower your price.
The local real estate market around you is a fluid situation, so let the comps help determine your decision. If the sales price of the last house sold near you is an acceptable price for your home, then sell when the inventory is low and you’ll get all the attention.
An example of how quick it can turn:
The house I just sold on Segovia in La Costa was the only house like it for sale when we hit the market. But over the next 30 days, another ten homes listed nearby, which diminished our negotiating power. We had to lower the price to stay competitive, and finally sold for 6% under our original list price, which isn’t the end of the world – but we were more optimistic when we began.
There can be a 5% to 10% variance in price when selling any home. The four nuances above will be factors, but the best thing you can do to sell for top dollar is to hire the right realtor. Contact me at (858) 997-3801 and we’ll discuss what I can do for you!
Compass intends to comply with NAR’s Clear Cooperation Policy MLS 8.0. In addition, the corporate staff will work the MLS to see if we can create a Coming Soon section, like many other areas are doing.
The 8.0 policy legitimizes the Coming Soon marketing, and allows for the Office Exclusives, which is already set up on our internal website. This is why we went to Compass, because it was clear that the game was changing, and the biggest brokerages with the best listing agents would be the most successful – while the little guys get squished.
After less than two years in business, here’s how Compass is doing in Encinitas. Year-to-date sales:
Our assistant Brittnie is a licensed realtor, and for months she has been working with a couple in search of the right entry-level home. Buyers at the low-end of every market have had no negotiating power for the last ten years, but some of the softness in our soft landing can be attributed to pilot error – the listing agents are still (too) cocky.
They made an offer that was 8% below the list price on a home that had been on the market for 3 months with no price adjustment. It was easy to figure out why it wasn’t selling – it hadn’t been remodeled (the type of homes that might have gotten lucky before, but now are struggling to sell).
The sellers counter back at 2% under list, and the agent tells Brittnie on the phone, “Don’t even think about countering the price”.
But that’s not all.
He also included the usual terms left over from the high-flying days:
1. Sold as-is, no repairs.
2. No termite.
3. No home warranty.
The buyers walked.
Previously, all buyers who were frustrated enough by bidding-war losses and rapidly-rising prices would succumb to the demands of the listing agent just to get it over with.
And it’s not just the terms, it is the attitude of the listing agents that is a turn-off too. Buyers aren’t going to put up with it when they see houses languishing on the market these days.
Another favorite is for listing agents to crank down the contingency period from 17 to 10 days. I had one do that to me yesterday on a house that we already confirmed had no permits on record at the city (it’s an older house).
I asked him if he was going to cancel the deal if we didn’t release contingencies after 10 days. His answer? “Hmm, well, I don’t know.”
Is it worth it to put the screws to the buyer in the middle of November on a house with no permits just so you have the option to go back on the market around Thanksgiving?
If the market sluggishness continues, some of it will be self-inflicted.
"Jim and Donna Klinge are by far the most professional, personable and responsive realtors I have ever worked with. They provide VIP concierge level service in every area of the process of selling your home. My home was marketed so successfully that we received an offer the day after our first and only open house. Thanks to Jim's pricing and negotiating, our house is now the highest sold in our community... more "
by Ann Romanello
"Jim educated us, helped us find the perfect house, and then negotiated us a great deal. I would hate to be sitting across the negotiating table from ... more "
"Jim is thorough and will be brutally honest about the homes he shows you. He provides great service and follows through until the very end and even ... more "
"I highly recommend Jim as a buyer’s agent. Working with Jim, we closed this week on a San Diego condo. Jim prepared a list of comparable sales to ... more "