I’m on track this year to beat my production volume of 2022! From TRD:
During the pandemic, home sales boomed on a foundation of low-lying interest rates. Now real estate professionals are seeing the slowest market in 35 years.
With mortgage rates higher than 7 percent, Southern California home sales have fallen by almost half over the past two years.
Even with home prices inching back up as sales plummet because of the few number of homes for sale, real estate agents, home inspectors, escrow officers and mortgage brokers starve for business.
The average real estate agent earned 19 to 29 percent less business in the latest year measured, according to Real Data Strategies. At least 5,100 agents who made money in the prior year ended the most recent 12-month period without a single sale.
The local index is about where it was last month AND last year at this time.
It is 3% below the peak of last May, and +9.6% year-to-date.
It wouldn’t surprise me if it slides downward ~3% the rest of 2023, then up ~3% in the first half of 2024, then down ~3% in the second half of 2024….recession or not.
Because rates won’t be going down until 2025 (at least), pricing should stay rangebound. Without wild swings in pricing, the buyers can focus on finding the perfect home without compromise.
When there are bidding wars and rapidly-rising prices, buyers are prone to just grabbing something and paying whatever it takes. Without those, sellers and agents have to be really good at selling homes – which hasn’t been required over the last several years.
It was 18 years ago today that I started writing this blog.
It was a Saturday morning. I set up a free account at squarespace to get it started, and it was solely because I expected every other realtor to do a blog too. Funny how that turned out!
Donna said, “Yeah well fine, just don’t spend too much time on it.”
I’ve been a part-time blogger ever since!
It was in August, 2005 when our escrow officer called me to say the buyer of one of our listings was objecting to signing the loan documents. Their realtor/lender beat me over there, and I heard her telling the buyer, “No worries, we will refinance”. It was one of many things that were happening then that led me to start the blog (the home got foreclosed 22 months later).
This is my first blog post, and it still resonates somewhat today:
Housing blogs were becoming popular and I commented regularly elsewhere. It caused more people to discover what I was doing – and to slam me just because I was a realtor, even though I was being pretty gloomy. By 2009, I had picked up quite an audience, and enough attention that the LATimes picked up on the blog, which led to this piece by ABC News Nightline:
The ABC TV spot ran in April, 2009, which coincidentally was the trough of the San Diego Case-Shiller Index. The audience here exploded, and at the same time the bank-owned listings being sent to us increased substantially. We sold 72 homes in 2009, our all-time high!
All kinds of crazy things have happened.
For example, we monitored the Jenae scandal in Bressi Ranch and La Costa Valley where she and co-conspirators were doing seminars and selling homes to unsuspecting suckers who financed their purchases 100%. Jenae promised to rent them out but they were adding $100,000 to each purchase price that was kicked back to her partner John as a tenant-acquisition slush fund. He finally went to jail but Jenae claimed she was duped too and she is still selling homes around the county today.
My life was threatened a couple of times, I’ve evicted dozens of people, I’ve been in a movie, and on CNBC TV (twice), plus I’ve been on ReasonTV, and in Grant’s Interest Rate Observer (on October 3, 2008 for those who have access). I’ve been on industry panels, I’ve been an expert witness in court, I made a citizen’s arrest of squatters, and I’ve met with the FBI to turn in scamming realtors…..among other things!
I’ve had 12,101 blog posts here with 68,179 comments and 3,000+ Youtubes with 2,341,000+ views, plus 14,200+ tweets. It has been one heck of a ride – let’s keep it going!
Thanks to readers everywhere, and a special acknowledgement of those who have utilized our real estate services over the years. It is why I do this blog, and I appreciate your support!
Having a good feel for what buyers will tolerate makes a difference. When everything else is spectacular, they aren’t going to get hung up on a couple of minor things – and it’s my job to present them as minor.
Another disrupter is looking to cut realtors out of the deal, which is fine.
This is similar to Zillow’s Make Me Move, which didn’t go too far. It’s a novelty to publicize a crazy price for your home, but if somebody wanted to take you up on it, would you sell your home to them?
Or would you be more curious about what the open market would bring?
Compass has Private Exclusives, but it is rare that any sales come from it because the sellers want to go on the open market. They have heard the stories about bidding wars and homes selling for over the list price, and they want to see if it will happen to them. It’s as close as you get to winning the lottery!
Nobody needs an agent to sell their house. But virtually all homeowners want to sell for max money, and that’s why agents have a job.
The Fed paused alright – Jerome just talks up the rates now!
Rates moved only moderately higher on Wednesday after the Fed rocked the bond market with its updated rate forecasts. To reiterate yesterday’s analysis, it’s not that the market is expecting the Fed to be accurate in those forecasts. Rather, the forecasts help investors understand how the Fed’s approach will be calibrated going forward.
In simpler terms, the Fed doesn’t think rates are too high right now. If anything, they might need to go higher. Moreover, they won’t go lower until economic data really starts to deteriorate in a compelling way.
Unfortunately, this morning’s most relevant economic report didn’t deteriorate at all (weekly jobless claims were 201k versus a median forecast of 225k). Actually, it’s fortunate for the economy, but unfortunate for interest rates.
Between the data and the overnight momentum in overseas markets, bonds are at their weakest levels in years. Mortgage-backed securities (the bonds that dictate mortgage rates) didn’t swoon quite as much as Treasuries, but as of today, it was just enough to push the average mortgage lender almost perfectly back in line with the highest 30yr fixed rate of the past 23 years.
Need a reason to sell now, instead of waiting for next year? It doesn’t matter what you think of Peter or the content. It’s how many people who read this in the first half-day that matters – and this kind of doom spreads like wildfire:
Paying $6.3 million is the biggest boondoggle since the city paid $10 million for the closed Pacific View school.
ENCINITAS, Calif. – City leaders in Encinitas are moving forward in their purchase of about 1.5 acres of land at La Costa Avenue and Highway 101, known to many as “Hippie Hill.”
“We wanted to see this land preserved and protected,” said Encinitas resident Elena Thompson. The purchase of the land is nearly official, with escrow expected to close by the end of September.
“Having the opportunity to acquire this land and keep it from being developed into timeshares, I think the community has very much appreciated the work that we’re doing here,” Mayor Tony Kranz said.
The northern end of Leucadia has seen the construction of a hotel and more development on the way including a nearby apartment complex, so the preservation of this land was paramount for long-time locals.
“Now it’s not going to be developed. That’s great for the city. It’s a small parcel, but every open space is great,” Scott Campbell said.
At Wednesday’s city council meeting, council talked about how they plan to finance the land, purchased for $6 million.
The city plans to use cash reserves for the initial purchase and then use lease revenue bonds to build the reserves back up.
“Some are a little concerned about what effect the roughly $400,000 a year that servicing this debt is going to have on our budget. I think that it’s important enough that we will make it work,” Kranz said.
The public will be asked to weigh in on what they want to see done with the open space at a future city council meeting.
