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(760) 434-5000

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Most recent articles

Who’s Selling?

Yesterday we wondered if there was a possible threat of a baby-boomer liquidation sale in the coming years, and we had a load of comments – thanks for participating!.

Can we get a feel for what’s happening now?  Here’s a check of the 67 NSDCC houses that have sold between $750,000 and $1,000,000 in the last 30 days.

These are the years when the sellers purchased:

Years Purchased
Number of Sellers
1965-1980
8
1981-1990
4
1991-2000
12
2001-2007
23
2008+
20

Only a couple sold for less than the price they paid, and there were 3 short sales too (no REO listings).  The newer homes in Carmel Valley bolstered the more-recent stats too.

About 36% of the sellers bought their home prior to 2001, and are probably baby-boomers (or older). Most will at least be empty-nesters by now, and could be candidates for the ‘downsize and travel’ crowd. If their numbers increased, they would most likely be offering older fixers upon which flippers can feast, and eventually be sold to those looking for a substitute for new homes, which are in short supply.

Posted by on Oct 24, 2014 in Jim's Take on the Market, Market Conditions, North County Coastal, Thinking of Buying?, Thinking of Selling? | 16 comments

Boomers Not Saving

Though we have reverse mortgages available, you can’t help but think we’ll be enduring a baby-boomer housing liquidation sales event over the next 10-20 years.  I think it’s already underway, and disguised as those wanting to “downsize and travel a bit”. 

Hat tip to daytrip for sending this in from Wells:

https://www.wellsfargo.com/about/press/2014/middle-class-retirement-saving_1022.content

Saving for retirement is a formidable challenge for middle-class Americans, with 34% not currently contributing anything to a 401(k), an IRA or other retirement savings vehicle, according to the fifth annual Wells Fargo Middle-Class Retirement study.

Forty-one percent of middle-class Americans between the ages of 50 and 59 are not currently saving for retirement. Nearly a third (31%) of all respondents say they will not have enough money to “survive” on in retirement, and this increases to nearly half (48%) of middle-class Americans in their 50s.  Nineteen percent of all respondents have no retirement savings.

On behalf of Wells Fargo, Harris Poll conducted 1,001 telephone interviews from July 20 to August 25, 2014 of middle-class Americans between the ages of 25 and 75 with a median household income of $63,000.

Sixty-eight percent of all respondents affirm that saving for retirement is “harder than I anticipated.” Perhaps the difficulty has caused more than half (55%) to say they plan to save “later” for retirement in order to “make up for not saving enough now.”  For those between the ages of 30 and 49, 59% say they plan to save later to make up retirement savings, and 27% are not currently contributing savings to a retirement plan or account.

Sixty-one percent of all middle-class Americans, across all income levels included in the survey, admit they are not sacrificing “a lot” to save for retirement, whereas 38% say that they are sacrificing to save money for retirement.

While a majority of middle-class Americans say that they are not sacrificing a lot to save for retirement,  72% of all middle-class Americans say they should have started saving earlier for retirement, up from 65%  in 2013.

When respondents were asked if they would cut spending “tomorrow” in certain areas in order to save for retirement, half said they would: 56% say they would give up treating themselves to indulgences like spa treatments, jewelry, or impulse purchases; 55% say they’d cut eating out at restaurants “as often”; and 51% say they would give up a major purchase like a car, a computer or a home renovation.  Notably, fewer people (38%) report that they would forgo a vacation to save for retirement.

Read full article here:

https://www.wellsfargo.com/about/press/2014/middle-class-retirement-saving_1022.content

Posted by on Oct 23, 2014 in Boomers, Jim's Take on the Market | 35 comments

Hang In There Buyers!

We seen the local NSDCC detached-home inventory hovering lately, instead of dropping off as expected.  Two other signs, declining sales and SP:LP, make it look like buyers are gaining  more control as we head into Halloween week.

The number of sales between August 15 and October 15 are down 18% from last year (and 25% from 2012), though there will be some late reporters:

Year
# of Sales
Median SP
Avg SP
SP:LP Ratio
Avg DOM
2011
444
$822,500
$1,052,013
91%
86
2012
618
$838,500
$1,116,907
95%
76
2013
559
$994,300
$1,324,491
96%
52
2014
461
$1,050,000
$1,418,498
94%
50

Buyers should stay engaged, if for no other reason than the low rates.  The dwindling new listings coming on the market should be ‘motivated’, and if you don’t mind weeding through the long-time listings there should be some deals in there too.

Jumbo rates

Posted by on Oct 22, 2014 in Jim's Take on the Market, Sales and Price Check | 1 comment

Move and Zillow/Trulia

The CEO of Move, Inc has commented on the News Corp purchase, and how Realtor.com can position themselves among Zillow/Trulia:

http://www.housingwire.com/articles/31747-exclusive-move-ceo-steve-berkowitz-opens-up-about-news-corp-deal?page=1

Berkowitz told HousingWire that he views the shifting landscape of online real estate as a positive for Move.

“We see Zillow and Trulia coming together as an opportunity,” Berkowitz said.

“What you will have now is two vigorous competitors vying for the hearts of the consumers,” Berkowitz added. “The industry will benefit from these moves. This will help the consumer understand the role that the Realtor plays. The difference between our competitors and us is the humanity that the word Realtor brings.”

Berkowitz said that despite the increasing popularity and acceptance of online real estate sites as a part of the real estate transaction, he doesn’t anticipate the human element ever disappearing from the home buying process.

“Humanity is something that we don’t think will ever move out of the transaction,” Berkowitz said. “Zillow is a cold, calculated estimate. It’s just numbers going into a database. A home is more than that. The home is the center of its own social network.

“There are roughly five million transactions a year. Those are transformational for the consumer. The role the agent plays is much more than just facilitating the transaction. They’re offering that sense that the transaction is life-alteringly important.”

Berkowitz said that he views the timeline of the Zillow/Trulia deal as another positive for Move.

“The ambiguity and timing of the Zillow/Trulia deal is an opportunity for us,” Berkowitz said. “Our competitors promised cost savings in 2016. I can promise that you will see the impact of (the Move deal) in 2015.

“I think you’ll see us look for ways to get off the ground running. We’ll take this runway we have and focus on building our constituencies.”

Read the full article here – there are three pages:

http://www.housingwire.com/articles/31747-exclusive-move-ceo-steve-berkowitz-opens-up-about-news-corp-deal?page=1

Posted by on Oct 21, 2014 in Realtors Talking Shop, The Future | 4 comments

90% Same As 1986

Owning a house is one of the few ways to try to get ahead. From the Atlantic:

Today, the top 0.1 percent of Americans—about 160,000 families, with net assets greater than $20 million—own 22 percent of household wealth, while the share of wealth held by the bottom 90 percent of Americans is no different than during their grandparents’ time.

What does this look like at the household level? Perhaps the most striking chart produced by the economists’ efforts to measure U.S. wealth is the one below, which shows that after a long march upward, and then a steep decline, the “average real wealth of bottom 90 percent families is no higher in 2012 than in 1986.” Meanwhile, the top 1 percent of wealthy families has almost completely recovered from the ill effects of the financial crisis.

rich get richer

Read the full article here:

http://www.theatlantic.com/business/archive/2014/10/the-bottom-90-percent-no-better-off-today-than-in-1986/381669/

Posted by on Oct 21, 2014 in Market Conditions | 2 comments

Inventory Watch – Bloated w/OPTs

The inventory count hasn’t dropped much.  Last year the number of houses for sale declined 7.2% between September 2 and October 28 as sellers checked out for the holidays.  This year it has only dropped 2.6%.

With more sellers waiting longer before canceling their listing for the holidays, it might make you think that they must be ‘motivated’, but it is the opposite – if their price was right, they would have sold by now.

The UNDER-$800,000 Market:

Date
NSDCC Active Listings
Avg. LP/sf
DOM
Avg SF
November 25
95
$376/sf
47
1,988sf
December 2
79
$371/sf
50
2,047sf
December 9
72
$383/sf
43
1,954sf
December 16
81
$378/sf
42
1,948sf
December 23
77
$374/sf
49
1,937sf
December 30
76
$373/sf
51
1,950sf
January 6
74
$370/sf
49
1,995sf
January 13
71
$381/sf
44
1,921sf
January 20
72
$384/sf
41
1,877sf
January 27
75
$399/sf
40
1,891sf
February 3
78
$409/sf
41
1,876sf
February 10
82
$395/sf
38
1,927sf
February 17
85
$387/sf
35
1,929sf
February 24
90
$383/sf
37
2,008sf
March 3
82
$397/sf
39
1,942sf
March 10
88
$377/sf
37
2,008sf
March 17
89
$366/sf
34
2,038sf
March 24
79
$369/sf
34
2,031sf
March 31
78
$367/sf
39
2,069sf
April 7
87
$373/sf
32
2,054sf
April 14
97
$380/sf
31
2,000sf
April 21
87
$377/sf
32
2,062sf
April 28
107
$379/sf
29
2,044sf
May 5
114
$376/sf
27
2,046sf
May 12
108
$385/sf
31
2,012sf
May 19
107
$385/sf
0
0sf
May 26
105
$375/sf
34
0sf
Jun 2
102
$376/sf
36
0sf
Jun 9
102
$377/sf
37
0sf
Jun 16
104
$369/sf
35
0sf
Jun 23
111
$380/sf
34
0sf
Jun 30
119
$376/sf
36
0sf
Jul 7
122
$387/sf
36
0sf
Jul 14
127
$388/sf
34
0sf
Jul 21
135
$381/sf
36
0sf
Jul 28
144
$382/sf
37
0sf
Aug 4
148
$379/sf
39
0sf
Aug 11
135
$375/sf
42
0sf
Aug 25
135
$374/sf
43
0sf
Sep 1
126
$377/sf
46
0sf
Sep 8
130
$375/sf
46
0sf
Sep 15
134
$369/sf
45
0sf
Sep 22
127
$376/sf
49
0sf
Sep 29
132
$378/sf
48
0sf
Oct 6
130
$367/sf
48
0sf
Oct 13
131
$378/sf
44
0sf
Oct 20
130
$385/sf
45
0sf

Read More

Posted by on Oct 20, 2014 in Inventory, Jim's Take on the Market | 9 comments

McTeardowns

teardowns

From our friend Karen at BloombergBusinessweek:

http://www.businessweek.com/articles/2014-10-15/chinese-home-buying-binge-transforms-california-suburb-arcadia

“Oh, hey! How ya’ doin’?” Raleigh Ornelas hollers, leaning out the window of his spotless white pickup truck. He’s recognized the man across the street, a developer standing in front of a Tuscan-style mansion under construction. “Where have you been hiding at? I call you, you don’t call me.”

Ornelas is an informal broker in Arcadia, Calif., a Los Angeles suburb at the foot of the San Gabriel mountains. He’s been keeping an eye out for the builder, an Asian man with a slight comb-over who goes by Mark. Ornelas has found two older homeowners who’ve finally agreed to sell their properties, and he knows that Mark, like all developers here, needs land on which to build mansions for an influx of rich clients from mainland China.

Ornelas rattles off addresses on a nearby street. “Three-eleven, that guy, he’s wack,” he says, shaking his head. “He wants 2.8.” He means million dollars. “And then 354, they want $2 million.”

The lot is 17,000 square feet. “Seventeen for 2 mil?” Mark asks, incredulous.

“I know,” Ornelas says. “They’re going crazy.”

A year ago the property would have gone for $1.3 million, but Arcadia is booming. Residents have become used to postcards offering immediate, all-cash deals for their property and watching as 8,000-square-foot homes go up next door to their modest split levels. For buyers from mainland China, Arcadia offers excellent schools, large lots with lenient building codes, and a place to park their money beyond the reach of the Chinese government.

The city, population 57,600, projects that about 150 older homes—53 percent more than normal—will be torn down this year and replaced with mansions. The deals happen fast and are rarely listed publicly. Often, the first indication that a megahouse is coming next door is when the lawn turns brown. That means the neighbor has stopped watering and green construction netting is about to go up.

This flood of money, arriving from China despite strict currency controls, has helped the city build a $20 million high school performing arts center and the local Mercedes dealership expand. “Thank God for them coming over here,” says Peggy Fong Chen, a broker in Arcadia for many years. “They saved our recession.” The new residents are from China’s rising millionaire class—entrepreneurs who’ve made fortunes building railroads in Tibet, converting bioenergy in Beijing, and developing real estate in Chongqing. One co-owner of a $6.5 million house is a 19-year-old college student, the daughter of the chief executive of a company the state controls.

Read full story here:

http://www.businessweek.com/articles/2014-10-15/chinese-home-buying-binge-transforms-california-suburb-arcadia

Posted by on Oct 19, 2014 in Market Buzz, Market Conditions, The Future, This Is America | 4 comments