Owning Manhattan

The other real estate reality shows are so full of drama that they are barely watchable. While they do pack some drama into Ryan’s new show, Owning Manhattan on Netflix, they mix in a few examples of him doing a masterful job of negotiating between agents and principals to make deals. Specifically, listen to his verbal discipline when talking on the phone – Ryan says very little, and keeps all the attention on the price – no stories or verbal vomiting.

He demonstrates a realtor’s most important job:

Say the right things, the right way, at the right time.

And he could give you the list of the things to say – it’s saying them the right way, at the right time that makes the difference between highly productive agents, and the rest.

He makes it look easy, but the mental discipline to gently yet succinctly assist people with making the right decisions is an art form and extremely uncommon.

I watched the eight episodes that have come out and thought Ryan’s negotiating was the most accurate representation of high-level agent deal-making that has ever been documented. Ryan also loses three key agents during the first season, which is another part of the business – agents are known to move around, and aggressive recruiting (particularly by Compass) is a constant threat.

This is just the trailer – if you are an agent or big fan of real estate, watch the whole series:

Floyd Wickman said it best. Don’t sell with blah blah, when you can sell with blah.

Oh, the 5-offer bidding war with my buyers? After a week of kicking it around, the listing agent finally called last night. Her sellers decided to not conduct a legit bidding war (even though the listing agent had promised it all week) and instead they sold the house to a neighbor at an under-market price.

It was a great example of how most potential bidding wars get botched by amateur listing agents. The realtor doesn’t take control of the situation and it just goes where it goes – and buyers get screwed.

NSDCC July Sales and Pricing, Prelim

The other day I popped off about how the market was deteriorating and we’d be lucky to see 100+ monthly sales the rest of the way in 2024. What do I know? Here is the sales data for this month so far:

There are two solid weeks left in July – could we get to 200 sales this month?

If so, it will leave the pendings drawer a little light – we’re down to 169 homes in escrow today. But there are 505 actives, and when the coming-soons are included, the count is up to 528 detached-homes for buyers to choose from!

The June median list and sales prices were outliers – the rest of the pricing data looks steady, though the buyers are looking for discounts now – and judging by the 96%, the sellers are obliging!

My new listing (below) went over list price though, and I have buyers in a 5-offer bidding war on a different home right now so there is plenty of hot action:

La Costa Oaks Update

This house for sale is down the street from the one I sold in October, 2022 for $2,250,000 and I said then that I didn’t think another home would sell in this neighborhood for less than $2,000,000. None have closed under $2M since then, and the last two sales were both closed in July at $2,125,000 for a Centex, not Davidson home that backed to the power lines and $2,444,000 across the street from this one.

Price Cuts in America

Florida and San Antonio look cheap and getting cheaper!

Forty-seven out of 50 metropolitan areas in the U.S. saw an uptick in for-sale listings with price cuts this June as compared with last year, the company said. The biggest annual increases were in Tampa and Jacksonville, Fla., and in Denver, Colo.

The drop in home prices comes during one of the most expensive housing markets in U.S. history. Mortgage rates remain close to 7%, and home prices in May hit an all-time high, with the median price for a home hitting $419,300.

But buyers in the South are seeing a relatively cooler market, due to higher levels of inventory.

Among the largest 50 metropolitan areas in the U.S., those that had the highest share of homes with lowered prices were Austin-Round Rock-Georgetown, Texas; Denver-Aurora-Lakewood, Colo.; and Tampa-St. Petersburg-Clearwater, Fla.

The median listing price in Austin fell by 5.2% from last June. In Denver it fell by 6%, and in Tampa by 4.5%.

Tampa was also the place that saw the highest growth in housing supply from last year. In June, the inventory of homes for sale in Tampa grew by 93% as compared with last year. Tampa was followed by Orlando, where housing inventory grew by 82%. The South as a whole saw listings grow by 49% from a year ago.

Nationally, the share of homes with a price cut was 18.3% in June, Realtor.com said.

https://www.morningstar.com/news/marketwatch/20240715187/nearly-a-third-of-home-sellers-are-cutting-prices-as-housing-supply-balloons-in-these-areas

When The Market Changed

I left this story in the comment section in June when Winstanley was pending – it closed yesterday so we can finish the saga. Surfrider had asked when I knew the market had changed, and I filed this response:

It was in mid-May.

Example:

Here the timing was perfect – they hit the market in early March. They listed for $2,985,000, and boom, it gets bid up to $3,100,000. I did a video so you can compare too:

https://www.compass.com/listing/13557-penfield-san-diego-ca-92130/1524821148249056649/

It was inferior to this nearby house on Winstanley in just about every way, which went active on May 15th:

https://www.compass.com/listing/13335-winstanley-way-san-diego-ca-92130/1576977769399823273/

On May 21st, I saw it on broker preview, and the listing agents asked me what I thought. I usually never answer because most agents can’t handle the truth and just get defensive and want to argue instead. But these agents were long-timers so I thought they might appreciate my feedback.

I said that it felt like the market had shifted, and it was going to get harder to sell homes from now on. I told them about Penfield, and how I thought they had gotten lucky. The agents didn’t jump up and agree with me, but I could tell that they had their reservations too. All good agents feel it.

Their listing on Winstanley was priced at $3,199,000, and three weeks after I saw them, they lowered the price to $3,049,000. It went pending four days later.

Even though Winstanley had 500sf more square feet and a better kitchen (Penfield’s kitchen cabinets were painted), it will end up selling for less. If they wouldn’t have lowered their price early, they could still be sitting around unsold too!

Here’s the end of story:

Winstanley closed for $2,900,000, which was $200,000 less than the inferior house on Penfield, and then this smaller house around the corner closed for $2,800,000. So just when the Penfield sale made the neighbors think their homes were worth somewhere into the $3-millions, two sales indicate otherwise only three months later.

Both of those recent sellers bought their house in 2005 and paid in the $1,300,000s.

This could happen in any neighborhood too. Existing homeowners have so much equity that if buyers lowball them by a couple of hundred thousand dollars, they can easily make the deal if they want to. The time of the year is one of the critical components too.

It’s how you can lose 5% or 10% of your imagined equity in a matter of weeks – poof, just like that.

(Not) Frenzy Monitor

The numbers were fairly steady through the May reading…..but the number of unsold listings have jumped in most areas now (with Encinitas and La Jolla at, or near, all-time highs). The current inventory of 507 actives is 23% higher than last July!

Rancho Santa Fe is on its way back to its old pattern of having 10x the number of actives vs. pendings.

The second half of 2024 is probably going to be relatively unsuccessful for the current sellers who have been on the market for 30+ days – they aren’t priced to move now, and it’s unlikely they will adjust enough to be an attractive buy (which would probably take a discount of -10% or more).

If they all have to come back next year….plus those who decided to wait out the political circus….plus the usual sellers, the 2025 inventory could feel like a real surge. I already have three different sellers who are choosing to wait until 2025 to put their home on the market!

NSDCC Total Number of Listings and Median List Price, First Half of the Year:

2019: 2,722, $1,550,000

2020: 2,324, $1,650,000

2021: 2,266, $1,899,000

2022: 1,812, $2,350,000

2023: 1,468, $2,500,000

2024: 1,663, $2,715,000

If the number of listings explodes next year, these price gains are going to need to mellow out.

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