Though the resale inventory is as thin as ever, the new-home tracts aren’t blowing them off the shelf – and buyers are being very conservative and patient. The tract salesperson here said that they have several people waiting specifically for the models to come up for sale, even though they could pay 30% less today for a standard tract house:
In the previous post we saw the media snippet that heralded the 12% increase in San Diego’s median sales price year-over-year. The local realtor-association president buttoned it up by anointing the local real estate market as “clearly heading in the right direction”, and now we can to go back to convincing people that it is a great time to both buy and sell.
Rarely do you see anyone digging further into the data, or explanation on how the median-price movement can be caused by a shift in the mix of homes in the samples. Or just noting that the median prices can bounce around, or question how valid the datapoint might be when you are measuring the whole county.
Let’s narrow the median-price examination down to three smaller regions, starting with our favorite, the detached homes from La Jolla to Carlsbad.
NSDCC September Detached Sales:
| SEPT | # of sales | Median SP | Median $/sf |
| 2010 | |||
| 2011 | |||
| 2012 |
Maybe Carlsbad is dragging down the tonier southern neighbors? The sales in Carlsbad made up 45% of last month’s total, so if we remove those maybe the upper-crust median price will show the double-digit improvemnet Y-O-Y.
NSDCC September Detached Sales (without Carlsbad):
| SEPT | # of sales | Median SP | Median $/sf |
| 2010 | |||
| 2011 | |||
| 2012 |
Nope, even the highest-end median price struggled in September.
Has the lower-end market been red hot, pushing the county’s median price higher? All you need to skew the median data is a pricing surge from below – let’s check the Oceanside/Vista market, where flippers have been very active, which you would think could cause a rapid increase in pricing.
Oceanside and Vista September Detached Sales
| SEPT | # of sales | Median SP | Median $/sf |
| 2010 | |||
| 2011 | |||
| 2012 |
No big 12% pops in any median price around the north coast. For there to be a 12% increase in the county’s September Y-O-Y median price, can we surmise that either the Lakeside/El Cajon market is carrying the county, SE San Diego is smoking, or there was a dip in September 2011 and we’ve had a bit of a rebound since?
The MLS only allows searches of 500 listings or less, so I can’t verify the county numbers, but who cares – all that matters is what’s happening in your local community.
The media types are always a little short on analysis, and instead are happy to plug in realtor quotes to fluff their stories. But their sound-bites have become consistent – prices are on the move – which may be enough to sway the popular opinion. From sddt:
The median price of a single-family home in the county surpassed the $400,000 level in September, up more than 3% from August, and more than 12 percent from September 2011, according to data from the San Diego Association of Realtors (SDAR), compiled from the Multiple Listing Service (MLS).
Condos and townhomes saw no change in September from the previous month, but were up 14 percent from the same month last year. Overall, median prices so far this year are up more than 3.5 percent compared to last year.
Sold listings dropped in September from their highest point in August. Sales of single-family resale homes (detached properties) fell 16 percent, and condos/townhomes (attached properties) declined by more than 18 percent. However, compared to September of 2011, sales are up about 10 percent.
“We still have more work to do to convince anxious sellers and buyers that there may never be a better time to move up to the home they’re dreaming about, or to buy their first home, but the local real estate market is clearly headed in the right direction,” said SDAR President Donna Sanfilippo.
This 4,940 sf “contemporary architectural masterpiece” on 19 acres in the hills of Poway is listed for $1,800,000 to $1,995,000:
http://www.sdlookup.com/MLS-120045888-15578_Raptor_Rd_Poway_CA_92064
The real estate industry is, and always has been, ripe for the pickings.
We thought that realtor.com would lead the way, but then N.A.R. had a third-party start running the realtor.com website. Quickly we found out that their only goal was to make money off realtors, not present a smoking-hot website to promote our listings. In the meantime, others like Zillow, Redfin and others have developed superior products that are doing a better job of satisfying consumers.
The field is wide-open too – any licensee who has MLS membership can get an IDX feed directly from the MLS to promote all listings. We will probably see other attempts by outside parties to corral the business away from the realtor industry, who will likely let them walk right out the door with it.
Two new websites are in development:
Househappy will be promoting properties with more emphasis on searching through photos (like a mug book?). From their press kit:
Portland, OR, October 04, 2012—Househappy, inc. has announced the upcoming launch of its real estate site, a free, user-generated platform designed for visual property search. With no ads, buyers and sellers can search or post property for sale in over 60 major cities and 50 states.
www.househappy.org lets users scroll through pages of high-quality thumbnail images while refining their search based on a broad range of criteria. Home buyers are no longer limited to searching based on zip code and price. Users simply select their location and search by financing options, seller concessions, property features, community attractions, and more.
“We believe househappy represents the future of real estate search,” said Kevin McCloskey, CEO and founder. “While other real estate sites restrict the user’s experience and are loaded with charts and graphs, our design makes it easy for users to find what they’re looking for.” In addition to search, Househappy’s intuitive technology is also designed to simplify the posting process. Sellers and brokers can use the unique and relevant search terms to create comprehensive, detailed posts for any property type or sale type.
“Our mission is to simplify property search and make information accessible to everyone––from buyers and sellers to brokers,” McCloskey said. Househappy will be driven by organic growth and continue to expand throughout the US.
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The other is H. Prospect, which is a match-making idea where buyers and sellers enter their haves/wants and the system tries to match them up – without list prices. From their website:
One of the biggest decisions for you and your family is where you live. It affects where you go to school, who your frends are, how long you spend commuting, and your ability to go on vacation. Unfortunately, it can also be one of the most difficult and the more confusing. And every house is diferent. Tax records, sale history, that’s good and all. But, how about real-time, house-specific feedback from actual buyers? There is no list price on H.Prospect. Simply tell us how much you can afford to buy or what you need to sell. We’ll keep your preferences confidental and you’ll receive the best matches for the best $$.
They will find a substantial hurdle trying to sell houses without getting the sellers to commit to a single list price – they get the moving-price syndrome instead, and become difficult to tie down to a market-value agreement (see the ‘Make Me Move’ idea at zillow). But if the no-price idea doesn’t catch on, it would be easy enough to fix.
H. Prospect is also hoping that realtors will help bankroll their efforts, but they will find out that we are leery of more whiz-bang websites that promise to direct clients our way for a nominal fee.
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Sooner or later (probably sooner) one or more of these alternative websites are going to grab all the eyeballs, and forever change the way real estate is bought and sold.
‘California is God’s best moment,” says Joel Kotkin. “It’s the best place in the world to live.”
Or at least it used to be.
Mr. Kotkin, one of the nation’s premier demographers, left his native New York City in 1971 to enroll at the University of California, Berkeley. The state was a far-out paradise for hipsters who had grown up listening to the Mamas & the Papas’ iconic “California Dreamin'” and the Beach Boys’ “California Girls.” But it also attracted young, ambitious people “who had a lot of dreams, wanted to build big companies.” Think Intel, Apple and HP.
Now, however, the Golden State’s fastest-growing entity is government and its biggest product is red tape. The first thing that comes to many American minds when you mention California isn’t Hollywood or tanned girls on a beach, but Greece. Many progressives in California take that as a compliment since Greeks are ostensibly happier. But as Mr. Kotkin notes, Californians are increasingly pursuing happiness elsewhere.
Nearly four million more people have left the Golden State in the last two decades than have come from other states. This is a sharp reversal from the 1980s, when 100,000 more Americans were settling in California each year than were leaving. According to Mr. Kotkin, most of those leaving are between the ages of 5 and 14 or 34 to 45. In other words, young families.
You don’t have to spend a million dollars to get an expansive ocean view in SB!
The fate of the mortgage-debt tax relief? It’s going to be decided in a lame-duck session, and there doesn’t seem to be enough politicians willing to create a big fight – an excerpt from the latimes.com:
One key strategy question: Could the Family and Business Tax Cut Certainty Act of 2012 — which passed the Senate Finance Committee in August and includes mortgage forgiveness relief and other housing-related tax extensions along with alternative minimum tax relief, research-and-development tax credits and dozens of other targeted tax benefits — be treated as a stand-alone bill? If not, there’s a strong risk of it getting caught up in the much larger partisan fights over spending, the federal debt ceiling and the whole fiscal-cliff debate.
Senate Democrats reportedly were prepared to bring the bill to the floor for a vote before the election recess, but it never happened. Now the fate of the legislation appears to be up in the air, and House leaders may come up with their own version.
Here’s a quick overview of what’s at stake for homeowners:
• Mortgage-debt tax relief. Besides the Senate Finance Committee’s bill awaiting action in that chamber, there are at least four bills that have been introduced in the House that would extend the law. Rep. Jim McDermott (D-Wash.) is sponsoring a bill that would extend the mortgage forgiveness relief through 2015. Rep. Charles Rangel (D-N.Y.) wants to extend it through 2014. Both McDermott and Rangel are members of the tax-writing Ways and Means Committee. Rep. Dan Lungren (R-Calif.) is pushing for a three-year extension, and Rep. Tom Reed (R-N.Y.) favors a one-year extension, through 2013.
The fact that there is significant bipartisan support for an extension in the House greatly increases the odds that mortgage forgiveness tax relief in some form will pass before the end of the session. One housing lobbyist gives it a 60% chance of passage, even better if post-election lame ducks and victors find ways to compromise on the bigger issues. The main obstacle to an extension: the cost to the federal government.
• Mortgage insurance premium deductions. Under tax code provisions that expired in December, buyers and refinancers who pay either private or government mortgage insurance premiums could write them off subject to household income limitations. The Senate Finance Committee bill would reauthorize these deductions retroactively to Jan. 1, 2012, and extend them through the end of 2013. Because this would cost the government an estimated $1.3 billion over 10 years and has not attracted as intensive a lobbying effort as mortgage debt forgiveness, it may be more vulnerable if negotiators are looking for ways to boost revenue to pay for other cuts or extensions.
• Energy-efficiency improvements to homes. The Senate Finance Committee-passed bill would extend for two years — through 2013 — tax credits for installation of energy-conserving windows, doors and other improvements. The Senate’s bill would also extend credits available to builders of energy-efficient homes. These have a reasonable shot at extension, given strong support from home builders and product manufacturers.
Bottom line: On issues such as tax-system support for financially distressed households and energy conservation, the November elections are important in the long run, but the decisions made during the lame-duck session will have an immediate effect on thousands of homeowners.
http://www.latimes.com/classified/realestate/news/la-fi-harney-20121007,0,803763.story
Our second trip this year to the top of Aviara, where there is a single street of custom homes. Here’s a west-sider that has been on and off the market since February. They paid $1,710,000 in 2007:
The Homeowner Bill of Rights launched in California not only changed hundreds of years of real estate law, it may have turned the West Coast state into a judicial foreclosure state with financial firms on high alert, legal experts claim.
“In California, they just gave trial lawyers a nuclear weapon to use against the industry,” said Bob Jackson, president and attorney at Irvine, Calif.-based Jackson & Associates. Jackson spoke at HousingWire’s REperform Summit, a mortgage servicing conference under way in Dallas.
“The Homeowner Bill of Rights is the most massive change in the last 100 years of real estate law,” he said. “It used to be servicers were in the business of enforcing simple contract law. What the loan servicer did is they enforced the contract, but that is no longer how the game is played.” The bill of rights, which was legislation designed by California Attorney General Kamala Harris, gave borrowers standing to legally address violations of the new foreclosure legislation.
The law bans dual-track foreclosures, requires single point of contacts for distressed borrowers and imposes civil penalties for the filing of multiple unverified documents, otherwise known as robo-signing. The robo-signing provision essentially means a law firm cannot file a notice of default or another foreclosure-related action unless a servicer has reviewed the filings to verify them, Jackson said.
With any document misstep leading to the possibility of litigation, Jackson said the hedging strategy would be to file judicial foreclosures, bypassing the common practice of nonjudicial foreclosures in California.
Jackson said the bill created several new areas of concern for servicing shops. The first is the potential to be sued for wrongful denial of a loan modification. Firms also can be sued if a loan modification was denied because of a mistake made in the process.
“You need to start looking at your foreclosure timelines,” Jackson said. “Judicial foreclosures get rid of 80% to 90% of this stuff.” He asserted, “[T]he bill will turn California from a nonjudicial foreclosure state to a foreclosure state.” Jackson noted that Arizona and Oregon are currently considering similar legislation.
http://www.housingwire.com/news/calif-foreclosure-bill-could-spur-more-judicial-foreclosure-filings
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