Part Two – A listing that gets marked ‘pending’ probably doesn’t mean much, other than there are buyers and sellers that have found agreeable terms, for now.
But two things are somewhat surprising:
1. The time of year for activity to spark up.
2. What you get for the money.
These sellers aren’t really dumping on price to effect a sale – none of these look like “giveaway” pricing. Could it be that “waiting it out”, worked?
Here’s a youtube tour around Del Mar and Solana Beach:
P.S. The second house (on the corner) had lowered its price from $2,090,000 to $1,749,500.
Jim, the widely anticipated increase in interest rates next year might be getting some buyers off the fence. Also the stock market rally seems to have stuck at least for now. Buyers looking for courthouse pricing at the retail level might be in for a disappointment this spring.
That last house….1.5 mil to live next to trailer park trash. Yikes. Must be first time buyers who haven’t been clued in to the importance of choosing your neighbors well.
I read yesterday that some lenders are starting to loosen the down payment requirements, which may be a secondary reason for all this activity (beyond the suggested rate increase for next year.)
http://online.wsj.com/article_email/SB126118008009797749-lMyQjAxMDI5NjExOTExODkwWj.html
Or could it be that there is not much in the way of “good” inventory out there for folks who need a house right away?
I really hope people aren’t stretching to buy these things.
We’ve all been in a buying situation – whether it’s clothing, electronics, cars, jewelry, whatever – where we know something is expensive, but we really want it, can afford it, and are willing to part with the money. Maybe a $200 pair of sunglasses, or a $150 pair of jeans, or a $45 steak.
I can imagine buyers worth a few million saying, “I know it’s insane to pay $2 million for this dump built 30 years ago, but I’ve always wanted to live in Del Mar, that’s the going price today, and I can afford it.”
Not saying I would (if I were a multi millionaire,) just saying I can see that happening.
Wonder if all those flippers who made $$ are now buying their homes. That would be ironic. Like the multiplier effect.
Jim,
I wonder if, for us amateurs, you could in simple terms describe what “pending” means? Does that mean the list price was paid? Can the deal still fall through or is it a done deal?
Much appreciated. Thanks.
These pending sales look suspect, especially so close to the holidays. We’ll see what they actually close for, that is if they even close. Methinks it’s some listing realtors playing a Christmas prank.
Pending is supposed to mean that a buyer and a seller have signed a contract and the house has entered escrow. The price isn’t recorded until the closing date, so it could be above or below the list price. Just because a house enters escrow does not mean the deal will go through. Currently around 50% of homes are falling out of escrow for various reasons, which is pretty high.
If I had the money, I’d probably buy the on the beach. I love the lifestyle and I’d rather spend that money on a house in a beach area, than a nicer larger house not at the beach.
“Currently around 50% of homes are falling out of escrow for various reasons, which is pretty high.”
Jim, the statement above from JordanT is that correct – 50% are falling out of escrow right now???
BECAUSE THE RATES / AKA MONEY IS CHEAP NOW! EASY!
What about Leucadia west of I5? Is that hot also? Thanks JTR!
Thanks, Jim. Good stuff. I have friends who are looking in the DM/SB area and can’t find a decent home to buy to save their lives and they are looking in that range you suggested (up to about $1.5m). I would disagree that money is cheap and easy – from what I hear from friends buying – it’s very hard to make it to the finish line on a mortgage deal right now.
The La Jolla view home reminds me of the great, great movie My Life as a House.
A.M.A.Z.E.D. at the activity and prices. I have bought in December in years past, now I am just plain priced out here in coastal LA.
Jim, the statement above from JordanT is that correct – 50% are falling out of escrow right now???
It probably is 50%, mostly due to agent-error. The inexperience is killing deals left and right that should have closed.
Jim,
What kind of errors do the agents make?
If the market starts coming back strong, won’t all the folks who pulled their listings (because they weren’t going to give it away) rush to sell cuasing supply to increase.
It’ll be a race between the banks and trapped owners to see who gets out fist. I think these last few months have been for the lucky few to get out.
If there’s even a whiff that you can get rid of that alligator and come out whole, supply goes way up. Then your back to a standoff.
But who knows, I tend to be an optomist. Laugh.
Only time will tell. But it looks like this is going play out over many years.
Watching realestate is like waiting for molasses to drip.
Stuff is flying off the shelves because Zimbabwe Ben is promising inflation.
I’d be buying too if there was anything liveable in my price range.
W.C.
If you have $$$ saved up you want rates to go up.
The higher interest rates go the more your $$$ is worth.
What kind of errors do the agents make?
1. Listing agents tell their sellers to hold out for the two in the bush.
Many don’t bother to call back when a lower offer is submitted, because they don’t know how to sell, to either the seller of other agent.
How about the offer I made this month on a house around $1.5 that we countered within 5% of list, but the sellers would only come off their price 1%. They are on their third agent, and have been trying to sell for a year. The agent shrugged his shoulders.
2. Agents have no clue how to handle repair requests, and instead just say ‘as-is or no deal’. I’ll never forget the TV show about the LA flipper whose agent represented both parties on a $1.5 sale and the buyer asked for $1,000 in repairs, the seller said no, and the deal collapsed. TV show closes with camera on agent, looking perplexed. She blows a $60,000 commission because she can’t figure out how to handle a $1,000 repair request? But it happens ALL THE TIME!
3. Agents are scared to death to put their butt on the line. Every house I sell gets my stamp of approval. I stand by the price/deal, because that is the way it should be. But ask most agents if they stand by their deal, and you’ll get the look of horror.
I thought this downturn woulda weeded out all the weak agents…
You drove right by my house and didn’t even stop to say hello 😉 Thanks for the DM/SB coverage. Anything I can afford here goes pending within a couple of weeks, but I expect that to change eventually. Would love to have a house west of Camino Del Mar, beautiful views and good surfing right out front assuming you don’t get hit by a train (when they’re in push mode it’s hard to hear them, I saw a couple of kids nearly get mowed at Trestles) or take a tumble down the cliff.