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Journal

San Diego is Eighth Hottest Market

downtown-san-diego

We finally edged ahead of Detroit. From HW – link HERE

Whether to buy or sell may not be clear following recent housing indicators, which offered contradictory points of view. But Jonathan Smoke, chief economist at realtor.com, says the residential real estate market continued to show strong signs of health in July.

According to realtor.com’s ‘Advance Read of July Trends,’ which draws on residential inventory and demand trends over the first three weeks of the month, the prevailing positive price trend continues with the national median list price increasing to $234,000, up 7% year-over-year and 1% over June. Median days on market increased to 69 days, down 7% year over year, but up 5% month over month.

“It’s typical to see a slackening in the pace of market activity during this time of year, due to back to school and the dog days of summer,” Smoke said. “Increasing median days-on-market suggests the market is finding more of a balance, but demand is still strong. This bodes well for more moderate price appreciation in the months ahead.”

“We have reviewed the data and taking into account less than perfect seasonal adjustment techniques at a very seasonal time for housing and the differing baseline metrics used in the various indicators, we’re comfortable that the market remains strong despite of these recent mixed signals,” stated Smoke.

The 20 hottest markets in the country in July, ranked by number of views per listing on realtor.com and the median age of inventory in each market, follow.

hottest markets

Posted by on Aug 4, 2015 in Jim's Take on the Market, Local Flavor | 0 comments

Rest of 2015

This summer’s 3-mo moving averages look quite different from last year.

In 2014, the list-pricing started to falter as summer approached, and stumbled along until this spring.  But since then, we’ve been on a tear!

summer 2015 avg LP vs avg SP

How can it be explained?  The lower-end buyers are more affected by rising rates, so maybe they are scrambling to buy anything affordable while they can?

According to the MLS, the San Diego County detached-home sales are 7% higher for the first seven months of 2015, compared to last year!  Summer sales this year are hotter than the 2013 frenzy levels in the graph below.

summer 2015 actives vs solds

Any decent houses-for-sale have been gobbled up so quickly that the inventory appears bleak to casual observers who only see low numbers and lousy offerings left behind by the more-motivated buyers.

The casual buyers and sellers will check out once school starts – leaving the rest of this year to the motivated players on both sides.

When is the best time to buy?  When everyone else isn’t!

Posted by on Aug 3, 2015 in Jim's Take on the Market, Market Buzz, Market Conditions, Sales and Price Check | 1 comment

Inventory Watch

Hello August!

The summer market is winding down, and the unsuccessful sellers will be cancelling their listings over the next two months – which is great for buyers. Why?  Because any new listings won’t be using those OPTs as price indicators!

Click on the link below for the complete NSDCC active-inventory data:

Read More

Posted by on Aug 3, 2015 in Inventory, Jim's Take on the Market | 2 comments

Weekend in LA

The transition of our daughter Natalie moving to Los Angeles has begun.  We went with her for a weekend dance convention, and used our hotel points collected over the last 10-20 years to score a free room in a downtown hotel.

Little did I know that it was five minutes away from the Petros and Money summer tour stop, so I talked Donna into going – just to say hello to the ultimate Laker homer, Vic the Brick.

Here are a few photos from our weekend:

2015-07-31 16.36.53

2015-07-31 17.45.39

lincoln

2015-07-31 22.13.47

2015-08-01 20.53.40

2015-08-02 13.12.17

 

How was your weekend?

Posted by on Aug 2, 2015 in About the author | 1 comment

House-Price Torpedos

Their agents are telling buyers to wait…but wait for what? Wait how long? Wait for who?  It’s irresponsible to make such casual comments.

Not mentioned in this article is that a good agent can overcome all these obstacles, and a bad agent makes them worse:

http://money.usnews.com/money/personal-finance/articles/2015/07/30/9-factors-that-can-torpedo-your-homes-selling-price

Posted by on Aug 1, 2015 in Jim's Take on the Market, Market Conditions, Thinking of Selling?, Why You Should List With Jim | 2 comments

Home-Value Guessing

I don’t remember ever hearing about this guy, but he was part of the Case-Shiller team that devised the Index, and now he does his own thing.

Here they developed a tool to predict the chances of hitting your target value in the next year. Click on the link below and once inside, click on ‘Tools’ at the top of the page:

http://www.weissindex.com/tools/target_value/?

Plus they have a colorful history of values that goes to 2016, so at least some of these are speculative. Each dot on this map represents one house – the color represents whether the house is increasing or decreasing in value that month:

Posted by on Aug 1, 2015 in Jim's Take on the Market, Listing Agent Practices, The Future | 2 comments

1031 Exchange

Image result for 1031 exchange

I appreciate the analytical, business-like aspect of the 1031 exchange, and try to do a couple every year just to keep my chops up.  I’d love to do more exchanges because sellers of investment properties have to re-invest to avoid capital-gain taxes.  But it’s rare that you can find new properties locally that are a good enough buy to make it worth the trade.

But for those who can – here is a good article on the basics of the 1031 tax-deferred exchange, plus three extra points worth noting:

LINK to 1031 exchange article

The excerpt:

While you will always want professional guidance when doing this kind of swap, there are three things to have in mind from the start:

  • Be aware of “passive liability.” In other words, if you have a $1 million mortgage, do a swap and acquire a property with a mortgage of $900,000, you have “gained” $100,000 in the eyes of the taxman. If you are buying and selling large investment properties, these gains can add up quickly.
  • To “exchange” a vacation or second home, that home must be an investment property. If you are planning to swap a vacation home, you need to make the case that it is an active investment. Usually that means being able to show paying tenants for at least a year. To ensure that you do not swap an investment property for a primary residence, a 2008 IRS ruling created a “safe harbor” for dwellings in a 1031 exchange. To meet the safe harbor rule, in each of two years immediately following the exchange, the home must be rented to another person for 14 days or more, and you may not use the home for more than 14 days (or 10 percent of the total number of days the home is rented in a 12-month period).
  • An exchanged vacation home cannot become a primary residence for purposes of taking advantage of the principle residence exclusion. Property acquired in a 1031 exchange is subject to a five-year-period of exclusion from the principal residence capital gains tax benefit.

Link to full article

Posted by on Jul 30, 2015 in Jim's Take on the Market, Real Estate Investing, Realtor Training | 0 comments

House Lottery

The first few house lotteries were shut down due to their gambling nature, but now there are new twists.  First it was the flipper who is unloading a 1906 Craftsman-style home to the person who submits $100 and the best dessert-recipe HERE

Now these folks in Phoenix who paid $350,000 for their house want you to submit an essay and $150 to have a chance to win their flip:

http://www.housefor150.com/

lucia

From KTAR – click HERE for link:

PHOENIX — Valley residents with an extra $150 lying around might want to think about investing that in real estate.

That money could actually go a long way as a Phoenix real estate investor says that’s all it takes to have a shot at purchasing one of his properties.

“We purchased the house with the sole intention of making it beautiful and selling it for profit,” said Erin O’Connor.

O’Connor intends to make a profit by selling the nearly 4,000-square-foot, five bedroom home at 6517 W Lucia Dr. through an essay contest that costs $150 to enter.

Any adult can submit an essay up to 250 words, O’Connor will then narrow the essays down to the best 300 and an attorney will pick the final winner.

“If you win the essay contest, then you’re given the exclusive right to purchase the home for $10 and your normal closing fees,” he said.

Those title and escrow fees are estimated to be roughly $3,000, according to O’Connor’s website.

O’Connor said there needs to be a minimum of 4,500 essays submitted for the contest to be valid and only the first 5,500 will be accepted. That ensures at least $675,000 in revenue for the home and at the most, $825,000.

Michael Weinstein of the YourRealEstateWorld.com team at West USA Realty wrote in an email the property has an estimated value of $418,210, so 2,788 entries would be needed to simply break even on the property.

Weinstein called it a fun idea for those that have the resources but was skeptical about the business model for sellers. O’Connor however, said he hopes it is a business model that not only works, but also will catch on.

“I do believe that it could catch on (and) we could make a business out of it,” he said.

A portion of the revenue from the essay entries will go to benefit St. Jude Children’s Hospital, O’Connor said.

Posted by on Jul 30, 2015 in Ideas/Solutions, Listing Agent Practices, Thinking of Selling? | 3 comments