Those trying to sell in the better school districts, and where there is already a shortage of decent inventory, could get lucky in the next few days. Buyers with limited options, and who really want to be in for the start of school, might compromise on a few things just to get ‘er done!
Jim Klinge
Klinge Realty Group
Broker-Associate, Compass
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- 682 S. Coast Hwy 101, Suite #110
Encinitas, CA 92024 - (858) 997-3801 call or text
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CA DRE #01527365, CA DRE #00873197
It’ll take some luck though.
Usually by 11am on a Monday morning you would see a dozen or two new pendings on the NSDCC hotsheet, especially after a fairly sunny weekend in August.
Currently there are only three new pendings on today’s hotsheet (reset at midnight every day), all cheaper homes in CV.
Readers are probably wondering how crazy can it be trying to buy a house these days? Inventory is up, sales are dropping – aren’t sellers getting desperate?
I showed a house over the weekend that is listed for $699,900. The sellers paid $292,000 for it in 1998, and have a loan amount of roughly $400,000.
The agent said today that they have TURNED DOWN FIVE OFFERS, between $675,000 and $686,000 in the first month of the listing.
She said that they might re-consider the $686,000 if it came in again.
I know of a couple who sold their Encinitas house and wanted to downsize. Well, once that Encinitas house sold they must have been desperate and bought a house in La Costa for $200k over a short-sale comp one street over.
Still, they paid almost $200k under what they sold their Encinitas house for, so they probably see it as +$200k instead of -$200k. As long as equity sellers are driving the market, prices can stick. But sooner or later, North County Coastal will need new blood (or so I hope.)
> She said that they might re-consider the $686,000 if it came in again
Next month they will reconsider the $675,000 offer.
As a potential seller with a 65+% equity position in my home, what are the downsides of listing one’s 10 yr old Carlsbad home hoping for a lucky sale – especially if the agent agrees with the price and understands that the price is pretty firm. Is it not ethical? By “lucky” sale, pricing would be on the high end of comp sales in the neighborhood.
It would be a pretty short escrow–Encinitas schools go back next Monday 8/16.
I’ve gone start-to-finish on an escrow in 24 hours! Financed too!
Future Mayor,
I’ll bite, though listen to your agent.
The downsides of listing on the higher end is blending in with the rest of the OPTs. Unless you have obvious premiums that make your house stand out from the rest (great location, superior view, good one-story floor plan, etc.) buyers will forget about you in a hurry.
You’ll have showings the first 1-2 weeks, then it’ll go stale, with an occasional passer-by who is usually looking at yours to justify why they should buy the house down the street.
You could get lucky and beat the odds, and some straggler who just got off a jet plane and has to move the family here in 30 days.
Usually they are just as knowledgeable, because they have the same internet access as locals, and have been doing extensive research from afar. But the timing might get them to pay more than they prefer.
Once you have been on the market for 30+ days, buyer want to lowball by 10% to 20%, and ignore any price reductions you’ve made to that point.
End result? The longer, the lower.
That’s why we’ll see so many cancellations in the coming months, because sellers (and their agents) will be stunned that their ego got disappointed…again.
“I’ve gone start-to-finish on an escrow in 24 hours! Financed too!” (JtR)
*Chuckle* Jim, can you tell us more?
Jim,thanks.That “The Longer the Lower” line sums it up well. The spin from the local chapter is ” prices have stabilized”. looking at closings and what is NOT selling tells a different story. Sellers and listing agents STILL for the most part are not pricing or presenting homes properly and you have to do both if you want a sale.there were less than half the number of closed escrows in july than we had in june in my town,the buyers are there but they want a decent house at a reasonable price.
Agents in particular and people in general want to hear that “prices have stabilized”.
Agents want to be the bearer of good news, and assure people everything going to be alright.
But nothing is “stable” when inventory is rocketing higher, and sales are dropping quickly while mortgage rates are the lowest since I’ve been breathing and prices are 20% to 50% cheaper than they were 4-5 years ago.
Logically, if you just combine the lowest rates ever and well-discounted prices, wouldn’t you think that the market would be on fire?
But it isn’t – why? Buyers are smart, and sellers are ignorant. Buyers will win, but they’ll earn it by searching relentlessly for the 1 in 100 seller who can get their head straight.
On Friday we made an offer of $840,000 on a house that the seller had paid $413,000 for in 1998, and loan amount was under $300,000.
The house across the street is the exact same model listed for $839,000, and had just gone pending.
Four days later, no response. Nothing, nada.
Review:
Sellers could have walked with nearly $500,000 tax-free in less than 30 days on a listing that had been on the market for over a month with no offers – AND CHOSE NOT TO RESPOND.
Or how about the MagnoBressi girl? Had to FSBO for the summer, but now that’s it’s mid-August she decides to list one house on the MLS, and send around an email blast.
Price-ranged $1.4 to $1.45, after her brother/cousin paid $800,000 for the bigger house next door.
Jim,
Your comment in #11 about the slow sales in this low interest rate environment is spot on. Even I’ve been shocked by the lack of sales during this period of exceedingly low rates. Usually, you see a wave of buying whenever rates hit these levels…but not this time.
Personally, I’ve always thought there was a limit to the number of people who could buy high price/low rate. There’s a point where the interest rate doesn’t matter so much because the principal does need to be paid off (unless you’re just paying interest, which probably isn’t the best choice right now), and the effect of low rates is offset by the higher property taxes on a high-priced home. There comes a point where the only solution is lower prices.
Like you’ve said, the buyers are the ones with the money. In the end, they are the ones who decide where prices go.
jobs, jobs, jobs….new, high paying jobs are just not here. most people who are willing/able to buy have done so and now the buyer pool is very shallow. There’s no recycling of buyers any more so the pool just stays shallow.
Its fairly simple. Just don’t outsmart your common sense.
The 24-hour deal. I was the buyer.
Back in the heyday one of my primary markets was the move-up buyer. We would find a house to buy, then put their current residence on the market, sell it in 1-2 days, and close both concurrently.
One backfired on me when the buyer backed out the day before closing on the first sale, jeopardizing the move-up sale – so I stepped in and bought it, closing the next day to keep the upleg on track (plus my three commissions).
It wasn’t start-to-finish, we had the title report in hand. But everything else was handled in the ensuing 24 hours.
This was in 2003 when you could walk into your local Countrywide branch that did everything in-house. I brought in my complete loan application, the branch manager approved it while I waited, and called her favorite appraiser who confirmed that he could bring in the value.
Off to the doc-prep department, where they printed loan docs which I signed, and the next morning they funded the loan, and it closed that afternoon, roughly 24 hours after it began. She slipped in the full appraisal later that day.
Unfortunately you couldn’t do it today though, with all the down-sizing and paranoia in mortgage lending.
Please say that “paranoia in lending” is meant to be humorous jibe after you described how a favorite appraiser could “bring in the value” and “slip in the full appraisal” after closing.
No, it wasn’t.
Being able to fund a loan in a day or a week should be a possibility. The way the appraisal happened wasn’t a reflection of the value, it was how deals get made to satisfy the customers. Banks don’t give a hoot about having a happy customer today.
I think the lower interest rates are having an effect in the lower priced zips. For example, in North Park (92104) the inventory according to sdlookup is down to 71 houses which is 6 more than in mid February. The high end continues to be where the deals are. In the affordable urban areas prices have firmed and inventory is not “rocketing” higher.
@clearfund #14:
Absolutely true as well. We’re accepting the fact that our income situation will likely change as well. This year, we will get close to zero on our investments which usually bring in ~mid 5-figures each year. Additionally, earned income is stable for now, but will likely be cut 5-30% in the coming years. Because of this, we are not willing to stretch.
I think both of these (no jobs, and a lower limit on monthly payments due to the high prop taxes) make this a very tepid market.
You don’t see a problem with getting the appraisal after the fact? The lending institution has a duty to its shareholders and its creditors to be sure the collateral is sufficient before the loan closes. Maybe banks are having trouble now because they failed in that regard. How did the collateral hold up in this particular loan?
yes, I get it, let’s pepper Jim on the fine details to make him look bad in front of his clientele.
I think you and I covered this already, didn’t we?
No, I don’t see a problem – it’s called service. The value was there, the appraiser couldn’t drop everything to run the paperwork right over, so she trusted that he’d get it later that day.
How did it hold up? The house is still standing.
I sold it 14 months later, for a profit.
Figuring out the value of a house isn’t that tricky, folks. Heck, a non-professional could probably get a fairly accurate number by sitting at his computer in five minutes.
Here’s how: Go to the house’s Redfin page. There are five (!) autocomps there (Zillow, cyberhomes, eppraisal, a number calculated by nearby active comps with similiar square footage, and a number calculated by nearby sold comps). If the numbers agree, there you go. If they don’t, the sold comp number seems to be the most accurate. Factor in lot size, condition, how close it is to noise generating things (freeways or busy streets), views, etc. if any of the above are atypical for the neighborhood. These are less accurate for large, expensive custom houses, but for a typical tract home, this ain’t hard.
But how does anyone really determine what the accurate value of a house is? Ultimately, it is just what a buyer is willing to pay. I know a lot of agents who complain about Zillow but I don’t think they are any better at reading the mind of a buyer of a particular house at a particular time. There are just too many variables. All appraisals, agent estimates, Zillow/Redfin estimates are really just useful guidelines.
Jim, I wasn’t picking on you. Countrywide had a duty to have the appraisal in the closing documents prior to closing. Countrywide was remiss on many of its duties. We all know the end result.