This type of view is fairly affordable compared to other cities:
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Mike Imgarten, a 29-year-old civil engineer, encountered a frenzy of demand and a dearth of inventory during a two-month house hunt this spring in Sacramento, Calif. Fearing he’d end up paying too much, he took a break from the search in June. Sales in Sacramento now are off by more than 25 percent from a year ago.
While inventory remains tight by historical standards, the supply of homes on the market has almost doubled, says Erin Stumpf, Imgarten’s real estate agent. “Six months ago, if I listed a property under $400,000, I would expect multiple offers within a few days,” she says. “Now, I might get one offer within the first couple weeks.”
In California, Arizona, and Nevada, where bidding wars have caused the country’s largest gains in home prices, markets are showing signs of cooling. The surge in prices, combined with higher mortgage rates, is reducing affordability while encouraging more sellers to list properties.
“We are shifting from a frenzy to where buyers are taking a step back and being more analytical and unwilling to just make rash decisions,” says Ellen Haberle, an economist for Redfin, a real estate brokerage based in Seattle.
A reduction in homeowners who have negative equity—owing more on their mortgages than their houses are worth—is pushing more homes onto the market. Negative equity had been limiting sales in regions hard hit by the housing crash. Thanks to rising prices, more than 2.5 million homes returned to positive equity in the three months through June, according to research firm CoreLogic.
Sellers lowered asking prices on about 25 percent of listings in September, the biggest share in two years, according to Redfin, which tracks 22 cities across the country. In October the figure was 23.8 percent.
The inventory of unsold U.S. homes climbed in September from a year earlier for the first time since 2011, while contracts to buy previously owned dwellings plunged the most in three years, data from the National Association of Realtors show.
The pullback comes at a time of year when sales typically slow. Still, the drop-off in heated markets such as Phoenix is far greater than expected, says Michael Orr, director of the Center for Real Estate Theory and Practice at Arizona State University.
A jump in borrowing costs since May has discouraged some buyers, and the government shutdown may have weakened confidence, he says. The average rate for a 30-year fixed loan was 4.35 percent, Freddie Mac said on Nov. 14. That compares with 3.35% in May.
“We have buyers, but they’re on strike,” Orr says. “This caught everybody by surprise, including me.”
Some markets have been super-charged by investors flipping houses and institutional purchasers such as Blackstone Group acquiring large numbers of single-family homes to rent. Many of these buyers are pulling back in the cities with the fastest price growth, says Sam Khater, senior economist for CoreLogic.
Demand slowed after institutional investors began withdrawing from the southern Nevada market a few months ago, says Dave Tina, president of the Greater Las Vegas Association of Realtors. “We did a catch-up from being as low as we were,” he says. “Now we’re going to see normal raises in prices, not the craziness of 32 percent.”
There will be more national stories of despair in the coming months, but I think we just got overheated between May and September (see graph above).
If prices would have topped out around $215,000, then 2013 would have looked a lot like 2012 with 14% appreciation – which is less remarkable during a ‘bottoming’ era. It’s when prices are going up 2% or more per month that it feels crazy.
President John F. Kennedy came to San Diego on June 6, 1963 to address the Marines at the MCRD. Governor Pat Brown also convinced him to give the commencement speech at San Diego State College, and receive an honorary doctorate degree in law at the ceremony. It was the first time a California State College had awarded an honorary doctorate degree.
The tour was covered by local media outlets. Here is the KFMB version – note the sign at the filling station that was advertising gasoline for 29.9 cents per gallon, and that was back when they pumped it for you!
The number of Americans who owe more on their mortgages than their homes are worth fell at the fastest pace on record in the third quarter as prices rose, a sign supply shortages may ease as more owners are able to sell.
The percentage of homes with mortgages that had negative equity dropped to 21 percent from 23.8 percent in the second quarter, according to a report today from Seattle-based Zillow Inc. The share of owners with at least 20 percent equity climbed to 60.8 percent from 58.1 percent, making it easier for them to list properties and buy a new place.
“Home sales will pick up very nicely when people gain the equity they need to sell their house and have a down payment for the next one,” said Neal Soss, chief economist at Credit Suisse Group AG in New York. “There’s a magnifying effect on sales — people are able to list their home and sell it, and odds are they’re going to go on and buy another one.”
A shortage of inventory has forced homebuyers to compete, driving up prices and leaving some shoppers out of the market, said Thomas Lawler, a former Fannie Mae economist who now is a housing consultant. The number of homes for sale reached a low of 1.8 million in early 2013, the fewest in more than a decade, according to data from the National Association of Realtors.
“The pent-up demand from people who now have enough equity to sell their homes will help next year,” said Lawler, president of Lawler Economic & Housing Consulting LLC in Leesburg, Virginia. “We’ll see the effect during the spring selling season. Not a lot of people put their homes on the market during the holidays.”
Read full article here:
A look at residences on the cliff overlooking the La Jolla Shores and the Cove:
Are you accustomed to using the internet for all your shopping needs? Those who prefer to research and buy products and services on-line will find it natural to do the same for agents.
Here are four ways to use the internet when selecting a realtor:
1. Google their name. Any realtor worth considering should have a decent web presence, and hopefully some evidence of their past performance. Check the dates of their latest blog posts or featured listings.
2. Check their license number. Every piece of advertising has the realtor’s license number on it, including websites and business cards.
There are some new agents who are really good, and there are older agents that should be put out to pasture, so it’s not a perfect guide. But at least you can easily tell how long an agent has been in the business with a simple glance at their license number.
The real estate licenses are issued with sequential numbers. I just use my company’s broker number as a guide. If they have a lower number than Klinge Realty, they’ve been around for more than ten years, and if they are a new or newer agent, then I need to check how many sales they have closed on the MLS. Here are the months that these licenses were issued:
|License Number||Month Issued|
|01388871 (Klinge Realty)||June, 2003|
3. Check their profile on Zillow. The industry’s leader now includes both reviews of agents, and how many sales they have closed in the last twelve months.
An agent who has something to offer should have double-digit reviews and sales (good agents should sell at least one home per month on average). Any agent who has more than 75-100 sales has a big team of agents who are all reporting under the leader’s name, which is somewhat deceiving.
4. Look for videos. Every agent worth considering should be using video in some fashion – at least a video of themselves on Zillow or their website, and/or real video tours of their listings with commentary.
Yelp used to be a reliable source, but they have been under fire lately. They have deleted positive reviews from my actual clients, and here a Carlsbad dentist gets on TV with his experience:
Yelp hides additional reviews – check at the bottom of each Yelp page where you see this link: other reviews that are not currently recommended
Get good help!
The Home Value Index has not only been a pretty good measure of pricing trends, but it has also been a good predictor of the Case-Shiller indices.
The next Case-Shiller Index is due out a week from today, and is likely to show more deceleration. The HVI is predicting a less-than 1% increase month-over-month for the 10-City, and 20-City composites.
But the local pricing has been spectacular this year, and we are back to peak pricing – or higher – in some areas:
More cities here: