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Journal

Will Prices Keep Going Up?

The N.A.R. Chief Economist Lawrence Yun was befuddled in his previous press release, and now this:

“Home prices keep chugging along at a pace that is not sustainable in the long run,” Yun said. “Current demand levels indicate sales should be stronger, but it’s clear some would-be buyers are having to delay or postpone their home search because low supply is leading to worsening affordability conditions.”

Yunnie is an old-fashioned guy who relies on historical norms.  But more people are probably thinking the same – this run-up in pricing isn’t sustainable.

Or is it?

We are in an environment where we are peppered with lottery ads daily.  People dream about getting rich quick, and selling your house is about the closest most people get – and it’s not enough just to sell your house for an all-time record price.  Instead, every seller wants more than the last guy got.

Unless that mentality changes, prices will keep going up.

Won’t there be a point where we run out of ready, willing, and able buyers?  Yes, but unless a seller NEEDS to move, they aren’t going to budge.  They aren’t going to lower their price until they are absolutely convinced that they must – and it’s more likely that sellers will withdraw their listing and try again later.

If sellers do need a solution, there are more alternatives than ever:

  1. Reverse mortgages.
  2. HELOCs
  3. Share with family.
  4. Share with others. (H/T daytrip)
  5. Loan mods.

Once we reach the point where the market stalls, it will stagnate for years until sellers and realtors realize they must adjust their price to sell.  Realtors themselves struggle to accept the rules of supply and demand – they just keep hanging onto their listing until the market catches up.

Rising rates, economic downturns, political drama, world calamities – none will be as influential as a seller’s ego when it comes to adjusting on price.

Watch the number of sales – they are the precursor.  If/when sales start to decline, all it means is that fewer sellers are willing to adjust enough on price.

Will their reason for moving be powerful enough to not seek an alternative, and sell for what the market will bear?  It’s doubtful, and as a result, a market that is this hot will take time to re-calibrate – if it does at all.

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Posted by on Jun 22, 2017 in Boomer Liquidations, Boomers, How Hot?, Jim's Take on the Market, Market Conditions | 0 comments

Point Loma Sailing

We have a busy family like everyone else….so busy that the only time this summer the four of us could get together was one afternoon last week, so we went sailing off Shelter Island for $89 per person at http://sailsandiego.com/.  Here are photos:

I always figured the sub base would be a super-sophisticated security zone.  It looks like a dock, a floating fence, and a couple of flags from here:

The skipper said they are burying the nuclear waste from the aircraft carriers and subs here:

We all know about the Old Point Loma Lighthouse on top of the hill, but this is the Coast Guard’s newer lighthouse at the more-appropriate sea-level location at the southern tip of Point Loma:

North Island is a very active Navy base:


This was docked for a few hours and then poof, it was gone:

Posted by on Jun 21, 2017 in About the author, Jim's Take on the Market, Local Flavor | 5 comments

Trendy Tuesday by Kayla

I subscribe to Architectural Digest and I absolutely LOVE reading all their articles. I get so many ideas for interior design and it’s a great resource to see all the upcoming trends. It’s also great when you feel like looking at really cool homes all over the world!

Here is the most Instagrammed house in Los Angeles. A lot of brands like to use this home as a backdrop for their look-books. It’s also been used as a filming location for the past few years.

Now, this isn’t the most practical home for a family. It’s multi-level and has more of an artsy/zen-like feel, but that’s normal for Venice!

Here is the article from Architectural Digest:

http://www.architecturaldigest.com/gallery/inside-the-most-instagrammed-house-in-los-angeles

Here is another link from Image Locations that gives you a better idea about the inside:

http://imagelocations.com/oasis/

Posted by on Jun 20, 2017 in About Kayla, Jim's Take on the Market, Trendy Tuesday | 5 comments

Investor Financing For Flips?

Big-money investors are entering the real estate space, though not in California yet – but it’s just a matter of time.

Notorious R.O.B. explores whether there would be much difference between selling to an investor, and selling with a realtor on the open market:

http://www.notorious-rob.com/2017/06/are-investor-offers-always-worse/

But he also brings up a curious thought – what if the investors re-sell the house, and carry the financing for the buyer? An excerpt:

Longtime readers know that I think the most interesting possibility is that companies like Opendoor, Offerpad, and others are looking at revolutionizing the home financing process by offering direct seller financing to buyers. That was premised on the idea that these guys would resell their loans as private label RMBS.

What if they figure out a way to just hold on to the loans and service them directly in some fashion?

If investors were selling re-conditioned homes and offering to self-finance the purchase, they could bring in a whole new set of homebuyers that can’t get a loan now.  They wouldn’t finance just anybody, but they could pick up those who get left out of the current mortgage guidelines for silly reasons.  If they had sensible guidelines, they could even become the go-to lender – you just have to buy their house, at their price, to get their financing!

Creating a new buyer pool could keep the party going for a few more years!

Read Rob’s article here:

http://www.notorious-rob.com/2017/06/are-investor-offers-always-worse/

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Posted by on Jun 20, 2017 in Jim's Take on the Market, Real Estate Investing, The Future | 0 comments

Hardwood-Floor Tips

If you have hardwood floors in your home, then you likely know the fear of ruining them.

Hardwood flooring can really take a home to a whole new level. It is so classy and sophisticated, yet also so homey and comfortable. They really are the perfect floors. That is, if you know how to take care of them.

You should absolutely never do these 10 things to your hardwood floors if you want to keep them looking spiffy.

While well-cared-for hardwood floors are gorgeous, there’s nothing more unattractive than scuffed-up planks. It’s easy to ignore your floors for a while, and then all of a sudden find them almost completely ruined. The worst part is that the more they get ruined, the harder and more expensive they will be to fix.

If you want to keep your hardwood floors looking nice, follow these 10 rules!

https://littlethings.com/never-do-to-hardwood-floors/

Posted by on Jun 19, 2017 in Jim's Take on the Market, Tips, Advice & Links | 0 comments