Mortgage rates hit an all-time low yesterday!
Combine the improved purchasing power with the covid-delayed selling season and the lowest inventory in recent history, and we have full-blown frenzy conditions. Look at how July wound up:
NSDCC July Sales & Pricing – Preliminary
We had 342 sales, and there will be some late-reporters. Wow!
Has pricing caught up with the market conditions yet?
This brought back memories…..
In the last week, we had 104 new NSDCC listings, and 101 pendings!
The hot action is trickling up.
We’ve had more pendings than actives in the $1.0M – $1.5M range since July 6th, and now the $1.5M – $2.0M range is feeling it too, with a ratio of nearly 1:1 today:
|$1.0M – $1.5M|
|$1.5M – $2.0M|
|$2.0M – $3.0M|
We’re down to only 689 houses for sale between Carlsbad and La Jolla, which is 33% fewer than in the first week of August last year. The median list price is $2,680,000!
Our new listing of a gorgeous one-story home west of the I-5 freeway in Del Mar!
This is the primary residence of a long-time custom-home builder, and it shows! There are several high-end finishes throughout the home, including the craftsman front door, deluxe custom kitchen with breakfast bar, hardwood floors, and a terrific master bath bathed in natural light! Custom fireplace, dual-pane windows, and interior laundry room too. Enjoy the 8,600sf lot with sparkling pool, herb garden and pano easterly views day and night – wow!
12911 Biscayne Cove, Del Mar 92014
3br/2ba, 1,518sf YB: 1972
LP = $1,495,000. (we represent the sellers)
The joys of homeownership tend to be positive for most. But there is risk – here’s an example:Link to Article
After looking at several houses along Alabama’s Gulf Coast, my new wife and I decided the sunny cottage on Audubon Drive in Foley was the one—so long as the seller came down a little on the $145,000 asking price.
There were two bedrooms, two bathrooms, an attached garage, a tidy shed that was painted picnic-table red, and a pair of towering longleaf pines. It sat in an oval subdivision of cookie-cutter homes on a lot roughly the size of a basketball court. There was just enough room for the dog to run in the backyard without trampling the vegetable garden. It was convenient to my newspaper office in Foley’s antique downtown and to the elementary school in Gulf Shores where my wife taught kindergarten in a trailer parked outside of the overcrowded elementary school.
The beaches along the Gulf of Mexico were a short drive from the house. Just built and bland as an egg inside and out, it offered a blank canvas with years to go before we could expect major repairs. I replaced the tacky ceiling fans and planted bushes in my head as we looked around. The real estate agent walked us over to see the neighborhood playground.
A week before Thanksgiving in 2005, we signed papers to buy the house for $137,500. We painted the walls and hung blinds in time to have friends over for the holiday.
Twelve years later, little about my life remained the same. I’d left the Mobile newspaper to take a job at The Wall Street Journal. I was no longer married. Pierre, the dog, had died of old age. But I was still sending mortgage payments each month to a bank in Alabama.
I would have sold the house, and in fact I tried. But when the U.S. housing market collapsed in 2007, the property’s value fell far below the amount I had borrowed to buy it. Walking away was never an option. I’d signed papers promising to pay the money back and I intended to do so one way or another. In case my moral compass ever needed a shake, laws in Alabama, as in many states, allow lenders to pursue the difference between the mortgage debt on a property and what it fetches in a foreclosure sale. For much of the next decade, that number kept growing. At one point, it would have been more than $70,000.
Our new listing of a 2005-built home on a culdesac for only $739,000! The Zillow history shows that the house was rented the first of April, and as soon as the new tenant moved in, she told the landlord that she was not going to pay rent because of the eviction moratorium. The owner decides to cheap-sell it with a non-paying tenant inside, but no takers. The ensuing hysteria around the house caused by people thinking they might be able to buy one for $100k under value eventually caused the tenant to move out.
A remarkable recruiting effort by Compass staff!
Our reader ‘just some guy’ sent in this article and quipped about these writers who insist on promoting a foreclosure scare due to the pandemic. But it is worth noting because it could become a self-fulfilling prophecy just due to the lack of a counter-argument being published at large.
This article is quick to point out that there isn’t a problem yet:
Even after the foreclosure moratorium expires, homeowners on a government-backed loan will have a forbearance option to fall back on, so there’s no need to panic just yet. But digging into mortgage-delinquency data shows how much water is building behind the dam that is these government backstops.
In January, just 3.22 percent of mortgages were in delinquency. By May, that number shot up to 7.76 percent — about three points shy of where the delinquency rate peaked during the financial crisis of 2008, which was at 10.57 percent.
Prior to the the pandemic in March, the number of mortgages in forbearance was fewer than 100,000. Currently, there are roughly 4.5 million mortgages in forbearance, although this is obviously a reflection of homeowners having the option of forbearance, but it gives you a sense of the scope.
Not every homeowner in forbearance is past due on their payments; some went into forbearance as a precaution, or just because they could. Some homeowners were in forbearance and have since gotten out, either because there didn’t end up being a need or they got a new job. For June, 21 percent of mortgages in forbearance were current on their payments, but as the pandemic goes on, more will enter into serious delinquency that would normally trigger a foreclosure.
With the forbearance option available for up to a year, economists have baked into their models a wave of foreclosures in the spring of 2021, which they say would cause a very rare drop in U.S. home prices.
I haven’t heard anyone predict falling home prices in 2021, and Zillow is forecasting a 5.7% increase.
We also know that the loan-modifications that worked last time will get employed again before banks lose a penny. The only people they might foreclose on are homeowners with sufficient equity, but if it comes to that, then those folks will sell their house instead and make out nicely.
It does add an interesting component to next year’s selling season though, which should be a humdinger!
BTW, I don’t have any insider info on the rumored Compass/Keller Williams merger. Even if it’s been discussed, it’s hard to believe the egos involved would allow for it.