Imagine you are 22 years old, getting married, and struggling to find a new home.
It helps when Daddy steps in. Just ask Petra Ecclestone.
According to the Wall Street Journal, Ecclestone’s father, Formula One boss Bernie Ecclestone, has bought his daughter a 56,500-square-foot mansion (plus the 17,000-square-foot attic) that Candy Spelling has had on the market for $150 million, the highest U.S. home price ever.
No word on what it actually sold for, and Spelling isn’t talking.
Interview with Candy Spelling about selling the house:
Open houses are powerful tools when used within a specific marketing strategy.
Getting the price right is easier in the newer tract neighborhoods.
Demand is fine – buyers are ready, willing, and able – and will pay a fair price.
Most sellers are 5% to 10% too high on their initial list price, and then don’t adjust quickly.
The summer season will be over by mid-July (4 weeks away).
There is very little chatter in the media about specific market details – just vague numbers that always seem to sound bad. Does N.A.R., or other influential industry leaders, try to educate the participants – both clients and agents? Why doesn’t somebody roll out real facts, and solutions?
It’s because they are gripped with fear, and scared they might say the wrong thing – and at this point, they really don’t know what to say.
Anybody with a microphone is too far removed from the day-to-day action to really know what’s happening, and won’t investigate.
I’m going to keep laying out the basics, in hopes that somebody is listening:
La Jolla, CA—Southern California home sales held at a three-year low last month amid a sluggish move-up market and record-low sales of newly built homes. The median sale price fell year-over-year by the largest amount in 20 months as buyer uncertainty, tight credit and lackluster hiring continued to restrain housing demand, a real estate information service reported.
A total of 18,394 new and resale houses and condos sold in Los Angeles, Riverside, San Diego, Ventura, San Bernardino and Orange counties in May. That was up insignificantly – 0.3 percent – from 18,344 in April, and down 17.4 percent from 22,270 in May 2010, according to San Diego-based DataQuick. May marked the 11th consecutive month in which sales fell year-over-year. On average, sales between April and May have increased 5.7 percent since 1988, when DataQuick’s statistics begin.
The 1,152 newly built homes that sold across the Southland last month marked the lowest new-home total for the month of May since at least 1988.
Distressed property sales continued to account for more than half of the Southland resale market last month, with little change from April. Roughly one out of three homes resold was a foreclosure, while about one in five was a “short sale,” where the sale price fell short of what was owed on the property.
In the overall market, sales fell across all price categories last month compared with a year earlier. But in percentage terms sales in the lower and higher price ranges held up best: Transactions below $200,000 made up 30.6 percent of last month’s deals, up from 26.8 percent a year earlier. Sales of homes priced at $800,000 or more made up 7.5 percent of last month’s total sales, the same as a year ago.
However, sales between $300,000 and $800,000 – a range in which many move-up transactions occur – accounted for 38.9 percent of all deals, down from 44.4 percent a year earlier.
Last month 20.3 percent of total sales were for $500,000 or more, down a tad from a revised 21.2 percent in April and down from 22.3 percent a year earlier. The low point for $500,000-plus sales was in January 2009, when only 13.8 percent of sales were above that threshold. Over the past 10 years, a monthly average of 27.2 percent of homes sold for $500,000 or more.
However, an alternative method of tracking mid- to high-end activity suggests those neighborhoods now account for a fairly normal level of sales relative to overall regional activity. Southland zip codes in the top one-third of the housing market, based on historical prices, accounted for 37.4 percent of total sales last month, compared with a 10-year monthly average of 37.0 percent. Last month’s figure was up slightly from 37.3 percent in April and 37.0 percent a year ago. These higher-cost zips codes’ contribution to overall sales hit a low of 26.2 percent in January 2009.
The percentage of Southland homes that were “flipped” – bought and re-sold on the open market within a six-month period – dipped slightly last month to 3.1 percent of all sales. That was down from 3.3 percent in April and 3.4 percent a year ago. Flipping varied last month from as little as 1.6 percent of sales in Ventura County to as much as 3.5 percent in San Diego and Los Angeles counties.
Here’s the wrap-up of my open house yesterday in Mission Hills, which went better than expected, but still facing a big hurdle with the foundation. Sellers in this predictament should accept their fate, and prepare for lowball offers. Lowering the price last week by $10,000 (to $419,152) didn’t help, because the previous price was already among the lowest in the area, and buyers will want a bigger discount:
There is peak urgency during the first week of a listing, but after that they get stale quickly.
Consider the Mission Hills REO on Hunter St., originally listed for $429,900 on May 19th. We had four offers come in the first week, and after a round of highest-and-best, agreed to a $453,375 deal, in part due to this comment from their agent:
These buyers are very qualified to purchase this home and take care of the obvious, and maybe not so obvious, problems that exist. They are well aware this is an “as is” sale.
As you can imagine, that was the kiss of death. The buyers completed their home inspection, and instead of asking for any help, they cancel the sale immediately.
We go back on the market on June 3rd, but by then we were looking like day-old doughnuts.
Or week-old, once you read the inspection, which made it sound like the house was falling down. I attached the inspection report to the MLS listing, because I’d rather have it all out in the open, and deal with it; rather than agree to a sale and try to gloss it over later with the new buyers (by law, all reports must be disclosed to the next buyers).
Bank of America lowered the price to $419,152, but now we’re getting offers in the $300,000s. Yesterday the asset manager countered full price.
I’ll be on-duty today, having open house 12-3, in hopes of re-igniting some urgency. This example is somewhat exaggerated due to the house’s condition, but it does demostrate how fast a listing can go cold. Here is the original video – I’ll do another when I’m there today to gauge market activity:
Demand is strong for newer single-story custom homes on decent-sized lots, with no Mello-Roos.
If you want to be in our regular target area, North SD County Coastal, be prepared to spend $1,000,000+. If you’d rather spend less and aren’t that concerned about the daily drive – you may want to consider something like this:
People want to know about homes prices going up or down, but it’s difficult to measure. Because of the diversity of homes selling in different areas, there isn’t one clear, concise tool to judge the general pricing trends, so try to take a little from each.
CoreLogic does an index of repeat sales that is similar to the Case-Shiller Index.
Here is the history of their Monthly HPI over the last 24 months for San Diego:
The graph below shows how the distressed sales impact these repeat-sale indicies.
While we have seen plenty of long-time owners get foreclosed due to serial refinancing, most distressed sales are homes that were purchased around the peak of the market. With those, the second sale in the repeat set is naturally much lower than the non-distressed sets – that’s why the homeowners bailed out!
When you take out the distressed sales, there is a somewhat-narrow band of +/- 5% for non-distressed pricing since October, 2009.
If the lenders/servicers continue to throttle the sales of distressed homes, we can probably expect the overall inventory to be thin, and non-distressed pricing to be in this same range.
The guy from the TV show, Flip This House, wants to show you how to do it too.
He has a seminar tomorrow to discuss how he is going to make $150,000 profit on this house at 1036 Edgemont in South Park.
The house had been purchased at the trustee sale by our favorite flipper J.Mann for $330,000 (corrected, $269,800) in March, but apparently things didn’t work out, and he sold to our new flipper for $270,000 a month ago.
The new guy has invested enough that he’s looking for $600,000+ now. Link.
Here is his website promoting the seminar, with video: Link.
Imagine you are 22 years old, getting married, and struggling to find a new home.
