The second house shown here went pending today.
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
Not only 24 offers on that Olivenhain house but they only countered the 5 offers that were $1.1M or better.
Thanks anon, if that closes at $1.2 million, it’ll be within 16% of it’s peak price in 12/2005. The pool had been installed prior to last sale too.
For buyers who been long-time lookers, I don’t know how you can watch these happen straight-through for the last 18 months and not have concerns.
It’s having to beat out the stiff competition for the quality homes that is worrisome. I’m fine with you waiting as long as you want, but notice how many people are in the same hunt with you.
This house wasn’t spectacular, and they had 24 OFFERS, with FIVE over $1.1 million on a $999,000 LP.
When you have the shot, you better take it.
Doubt it reaches $1.15M and the prior owner did some pretty major remodelling on it before losing it. Loss will be closer to 25% when all is said and done.
OK, no problem.
1-2 years ago buyers were thinking they’d wait until they could get 50% off. In this case, you would have had to fight it out with 23 others to get 20% to 25% off.
If you want to buy, adjusting your expectations with reality is required. Be nimble.
Want more measure on the demand? Tack this on too, from an agent in response to hearing the price he needed to hit, to have a shot at the Roach Motel:
That’s too rich for my investor’s blood. They have a substantial margin they need to meet after rehab. They do put out a good product though. I’ve written 20 offers and have only closed two with them.
well, 50% off is possible, as long as you are looking at O-side or Esc. hey, if you are looking in the IE one can probably track down 65% off deals.
probably closer to 40-45% in SEH, 35% in 4S and east Carlsbad.
the coast, yeah, 20-25% will be it.
I say buy a little inland but make sure you are in a good school district and the gap will close and it’ll be a much better investment.
“If you want to buy, adjusting your expectations with reality is required. Be nimble.” (JtR)
Oh Jim, I wish I had read your advice before last Wednesday night. The home that got away had 12 of my top 10 needs/wants. It was perfect for me.
I saw it a year ago (out-of-state) but it wasn’t for sale, and then it magically appeared on the MLS 10 days ago. I didn’t offer full price, (we countered back and forth) and then someone one else did. I will deeply regret losing this house. I naively thought there weren’t many looking as it was September. I’m still in mourning two days later…
Think you’re jumping the gun there Jim…
Da .GOV pump is losing its prime:
Mean household debt/GDP from 1965-1985 = 43% to 49%
Mean household debt/GDP in 1998 = 65%
Mean household debt/GDP in 2009 = 97.3%
Mean household debt/GDP April 2010 = 92.7%
If one assumes that the mean ratio falls back only to the 1998 level (65%), in this deflationary spiral then household debt would have to be reduced by $4 trillion (out of a total $13 trillion), which constitutes 40% of CURRENT consumer expenditures -AND- Consumer spending accounts for 70% of GDP.
Welcome to the next leg down…
Smart money is gonna stay liquid now, of course there’s always some dumb money to be found 😉
Long time lookers, go ahead and wait on the sidelines forever. 🙂 People who think like me will get rich off your rent as we profit from housing prices rebounding! Good to see activity in the top tiers as well as the bottom. Sooooo glad I did not sell!
Thanks Joe Cool. We’ve been talking about you.
I wanted to increase the blog’s internet presence after hearing stories from people like CA renter about out-of-towners buying houses here without proper education.
So we’ve embarked on a SEO campaign to hopefully inch up the google rankings.
But I knew I’d have to endure more guys like you who insist on rolling out the old stats while IGNORING THE FACTS PRESENTED HERE.
How can you see, with your own two eyes, a million-dollar house get 24 offers, and say:
Welcome to the next leg down…
@ Joe Cool,
Deflationary spiral, dream on. The government dropping a trillion dollars into the economy combined with low interest rates is a one way path to inflation. There is no avoiding it, it has gotten too far. Got of think of debt/GDP in terms of future dollar values not today’s.
Smart money is diversified. That’s why I have liquid cash and real estate. Maybe you just don’t have enough saved to do the smart thing.
I sold my Manhattan home in Sept. 2005 (knew it was time to get out) and I’m renting an apt. on the 21st floor of a luxury building with a view of lower Manhattan and NY Harbour, cost? $2,500 a month short electricity and garage ($150 a month)
How much would digs like this cost me if I was to buy? $1.4 mil+
I thought about buying a second home in No. SD back in 2003 (I grew up there, but have been running a NYC biz since 1995), but I didn’t want to compete with liar loans when I had ca$h…I know, car-razy me 😉
I took that ca$h and plowed it into physical gold & silver, another mistake! lol
Yep, I should have taken that $1.2 mil I got from my NY condo & bought another piece of RE, not put it into a brokerage acct. and T-Bills!
What was I thinking!?!
😉
Seems like history just repeats its self on our coastal homes. People just like it here.
Yep, in 4-5 years I might revisit the area when I’m done with my business, I’d like to come home…
But I’m not holding a depreciating asset until then, not while I can put my capital in something that won’t be so volatile.
With that said, I really appreciate Jim’s video and commentary, it let’s us know first-hand where things are in the No. SD real estate market 😉
Perhaps someday soon I’ll be needing his expertise…
You bring your arrogant, pompous attitude in here, focused on one thing – disrupting the facts being presented and showing everyone what a big shot you are.
There are people who desire transparency in real estate; they want to know what’s really going on. They come here to see it.
But you insist on carpet-bombing their experience with your vague macro theories, declare how superior you are to everyone here, and make it wrong to even think about buying real estate.
There isn’t anybody here who gives a hoot about you and all your money. You can take your sideshow and smiley faces down the road and be somebody else’s troll.
Wasn’t the last asking price on that Lone Jack house $1.1M while it was a short sale? How come none of those 24 buyers decided to act then? Or was the bank not accepting offers at that price?
Probably both.
Unreal still…I guess reality isn’t really “reality” right now…
I wouldn’t rule out deflation. Low rates are a symptom not a cause. I’ll leave it at that.
To further prove Jim’s point, here’s one in Bressi that surprised me:
http://www.sdlookup.com/MLS-100034367-2565_Dogwood_Rd_Carlsbad_CA_92009
JTR, re: #18 all I can say is WTF??? nothing in here is worth $1mm much less that house…was it furnished, with $250k of cash????
All the hubbub about McMansions being out of vogue. Not so much.
I could be wrong but it seems like the low end is really soft right now, REO offers falling out left and right but maybe we just have a run a flakely buyers, who knows. The good houses on the upper end are going quick with lots of cash being flashed around. Does seem to be a distinct difference between these demographics at the moment. The biggie will be what happens with interest rates, they jumped up the last few days.
For buyers who been long-time lookers, I don’t know how you can watch these happen straight-through for the last 18 months and not have concerns.
It’s having to beat out the stiff competition for the quality homes that is worrisome. I’m fine with you waiting as long as you want, but notice how many people are in the same hunt with you.
Jim the Realtor | September 10th, 2010 at 5:51 pm
You’re right, Jim, it’s not easy sitting on the sidelines, especially when safe, liquid cash is earning ~1% or less…which is exactly why I think we’re seeing all this action. Lots of investors are out there just trying to do something — anything — with their money to earn a return. IMHO, that’s what happened with the roach motel, and I think it’s what’s happening on the high end as well. Not that they’re necessarily going to flip those high end homes, but that they just can’t stand being in cash any longer and just want to get on with life.
I talk to a few larger-scale investors and many of them have serious fears about inflation. Lots of worries about inflation, as a matter of fact. I’m a contrarian, but acknowledge that there is a lot of risk with what we’re doing as well. I don’t think houses are selling because the economy is getting better; I think those with money are worried about losing it via inflation.
The only thing that can save us long-time bears is higher interest rates. If we don’t get that, it will remain ugly for us. 🙁
@ JimG
It might just have been my specific area, or my even complex, but the low tier (small condos in a good neighborhood) seem to be recovering.
In late 2009 some short sales were listed contingent for more than a year and a half. Sometimes they would pop out of contingent to active, then immediately back to contingent again. New short sales sometimes tried to price under the lowest contingent unit. Short sales were not closing. This really hurt people trying to list regular sales to have short sales priced at the bottom never close.
Now short sales/REO condos are taking less than a month to two months to go from active to sold. The prices have gone up considerably as well. I have heard from friends that now units in my complex get sold, then for rent signs popping up immediately. I have also seen some comps sell, then sell again a couple month later for a 10-30K more.
I have been watching every lising/comp relevant to myself since 2008. I’ve been also trying to understand the big picture of the CA market. I bought in 2007. I was from out-of-state, but had always heard about how CA RE was high compared to the rest of the country. I bought relatively young, but could afford it comfortably. I admit I did not understand the whole CA RE picture when I bought. The only thing I saw I could do now is make an informed decision on whether to sell or rent for some years as RE recovers to regain some equity I lost.
@12
I wonder how you knew to get out at the exact peak of the US RE market, and knew you didn’t want to compete with ‘liar loans’. You happen to be a liar loan peddler for your hot-shot NY business?
While some people got in over their heads with ‘liar-loans’, many sat down with a calculator and figured out the exact costs of buying versus their income. When I bought I qualified for loans 100K more than the purchase price I sought and bought. I stood firm on the price I knew I could afford, and got a fixed rate conventional loan. Don’t assume all people who bought at the peak could only afford liar-loans. Most just needed someplace to live.
“The only thing that can save us long-time bears is higher interest rates. If we don’t get that, it will remain ugly for us.”
We won’t get that anytime soon (imho), but there are more things coming into play for us. In the mean time just relax, enjoy the cheap rent and mobility, and watch people get their panties in a bunch over petty nonsense. The past few years have been good for comedy if nothing else.
RE #19: “There’s money in the banana stand…”
I’m assuming you were alluding to AD. If not, apologies all around.
People just like it here.
Yeah, so far SD really is different.
The only thing that can save us long-time bears is higher interest rates.
PMs, CA Renter, PMs!!!
SoCal condo owner-There was actual deflation in 2009. Inflation is highly unlikely any time soon. Now, that doesn’t mean that the economy will be great-right now our economy resembles highly the “lost generation” of Japan from 1990 on. (Same exact problems too-inflated housing prices followed by a crash that was attempted to be covered up artifically.) They’ve had deflation for two decades now.
“When you have the shot, you better take it.”
We did, and we did. We have not been disappointed.
JTR, had I met you 2 years ago you would have been my realtor. If we need to buy or sell in the future you will be called.
Geotpf,
There is a big difference between Japan’s crisis and that of the US. Their monetary supply remained relatively flat when compared to the US. The US government responded to the recession by drastically increasing our monetary supply. We are in uncharted territory. The best we can do is hope for the best, and expect the worst wheither it be deflation or inflation. Neither possible outcome seems pleasing.
“wheither it be deflation or inflation. Neither possible outcome seems pleasing.”
I’ll take a little inflation over deflation any day.
And I’ll gladly take deflation over inflation any day. 😉
I know that Olivenhain house. I would have expected a higher price than that. The area, lot, and house itself are pretty decent. I think the newer homes just to the right (when facing them from the street) sold in the $1.7 range during the peak and are a bit smaller.
As for the original intent of JtR’s post… it seems like one post says the upper end (which nothing in this video even remotely approaches) is caving in, and then another like this points out that it’s alive and well. I think some of you are making too much out of too few data points.