San Diego’s non-adjusted Case-Shiller Index for September increased for the eighth month in a row, and was +1.4% higher than the previous month – which was the biggest M-O-M gain of the year.
The latest reading of 160.09 was +4.1% higher than September, 2011, and the largest number since September, 2010 when we hit 162.43.
The local momentum should continue too, if our CSI follows the NSDCC trend:
Detached-Home Avg. $/sf
In the early going of 2013, expect fewer sales due to sellers going crazy-high with their list prices to test the market – and buyers picking off the cheapest only because they are the lowest-priced homes for sale, not because they are priced lower than comps.
Here is the percentage-change graph for the last ten years – we’re positive again!
Those paying attention are seeing realtors continuing to commit short-sale fraud, and about the only hope for it to end is for short sales themselves to run out of steam. If the debt-tax relief doesn’t get extended (unlikely but possible) and those underwater sense an appreciating-market, we could see short sales go away.
This was one failed attempt – the realtor initially priced this short-sale listing at $475,000, only to raise it to $627,000 once his phone lit up like a Christmas tree.
The mortgage industry has been slow to react, but this article (free w/registration) mentions one paragraph of hope too:
Another developing practice is to look for pricing patterns with realtors. One red flag is when certain Realtors are consistently involved in transactions for properties that sell well below market value. This can indicate that the realtor is providing below-market-value BPOs to influence the asking price.
Could we be done with short sales in the next year or so?
Tomorrow’s C-S Index will be the September, 2012 report, and based on weighted same-house sales in July, August, and September. Because we’ve been having a late season flurry, the San Diego index might beat the odds and keep increasing (slightly) through the rest of 2012.
Here are the November detached-home sales from La Jolla-to-Carlsbad:
# of Sales
Last week, the county said they were setting volume records for transaction-recordings-for-the-two-days-before-Thanksgiving. Once we complete the remaining five days of this week, plus the MLS late-reporters, this month’s NSDCC detached-home sales should be over 200.
If the $417/sf holds up, we’ll see some startling San Diego Case-Shiller Index reports just about the time that the spring selling season kicks off!
I worked all weekend, and there were realtors showing property everywhere I went. One house that just had their price reduced by 10% was shown ten times yesterday, and eight more times today!
The intensity seems to keep building, with no break for the holidays. I don’t know if or how it will translate into more sales, or higher prices, but it should mean that the bidding wars will be exciting next year!
Yet there are plenty of houses not selling. Usually you can blame the location or condition of the house for not being worth the list price, and once the listing agent and sellers figure it out they can fix it if they prefer – or wait and see if the market will come to them.
But I am also hopeful that the intensity will help weed out some of the out-dated practices too.
I wanted to show a vacant house today, and called with plenty of notice because the remarks said to call to find out the “secret” location of the lockbox. Of course, not only did the agent not answer her phone, but she didn’t call back until 6pm after we were long gone.
When she called at 6pm she started right in with, “With whom am I speaking?”, and “Who do you work for?”. Then she broke into the old classic interrogation about wanting to know everything about my client. “Is he pre-qualified?” “Is he married and have kids?” “Have you been showing him a lot of houses in the area?”
Lady, I’m not making an offer on the house, I just want to know where the lockbox is!
A common ploy used to win a bidding war is the “escalation clause”. One of the agents in the Arroyo Hondo bidding war included this phrase as part of his highest-and-best offer price:
Buyer will pay $5,000 over the highest offer.
The escalation clause is an accepted form of negotiating, because most agents don’t give it much thought – it’s just looks like another trick in an environment full of gimmickry. I think most listing agents would allow it to determine the winner too.
I didn’t. Why not?
In a $1,110,000 sale, every buyer would pay $5,000 more to win.
I had already gone around the horn with each agent to get them to submit their highest-and-best offers, and I didn’t want to jostle them more and risk losing them. Buyers don’t like bidding wars, and if they feel like they are being played, they might bail – which isn’t good for the seller.
The escalating buyer may be a reluctant buyer, because he got stuck with somebody else’s price + $5,000. I don’t want him to blow out later, or load up on repair requests out of spite.
Buyers deserve a fair contest.
I discussed it with my seller, and he agreed – no escalation clause. I relayed that to the escalating agent, and told him that his current price was in last place, and to feel free to submit a higher number. They didn’t, which made me think that they might not have closed if they felt like they got stuck with a much higher price point.
I think listing agents should consider the pitfalls before employing any exotic terms – but do they think it out? My goal is to close the original escrow, because if the first deal blows up, you can’t predict that the next one will be at the same price – and historically they are usually less.
Here are other realtor viewpoints – note the cavalier attitudes:
Their comments show how the typical listing agent thinks – that the highest price automatically wins. If you are a buyer, it might be worth trying if you think that the listing agent is weak and inexperienced, but if you are on the seller’s side, give it some careful thought.
Here is a video tour of a few houses in the shadow inventory – ones that are bank-owned, but not listed for sale, but presumably coming to market at some point.
Yes, you could consider the 412 SFRs on the NOD and NOT lists as part of the shadow, but who knows if they will ever get foreclosed. The same goes for those in default but not noticed – starting January 1st they can’t receive a notice until they have been through the entire loan-mod process.
As recently as the first half of 2010, there were 270 homes on average being foreclosed every week in San Diego County. Now it’s down to around 100 or so per week:
There are only 16 SFRs in our La Jolla-to-Carlsbad region that are bank-owned, but not on the market. Occupants were probably offered cash-for-keys, but those who prefer to pay lawyer fees instead can probably extend their stay for quite a while.
Here are five off-market REOs, and one listed for $699,900, well under it’s opening bid of $967,632:
Demand for new mortgages is finally revving up—among big spenders, anyway.
Home sales using a jumbo mortgage had year-over-year growth of 7.9% through September, compared with 2.7% for nonjumbo sales, according to an analysis for The Wall Street Journal by mortgage-technology company FNC.
It’s the latest sign that jumbo loans, defined as $417,000 and up in most places ($625,500 and up in high-cost areas), are boosting sales of luxury homes across the U.S.
Homes sold in major metro areas with a loan of $1 million or more were up almost 28% through September compared with the same period last year, the highest total since 2008, according to real-estate information company Dataquick. Similar sales with loans of less than $1 million rose 8.5%.
“There’s no question that the increased availability of jumbo loans is stimulating home purchases on the high end,” says Guy Cecala, publisher of Inside Mortgage Finance.
Home buyers and their brokers say jumbos make it possible to compete in coastal cities where the cost of entry can easily go north of $1 million. Behrooz Torkian, 39, and his wife, both physicians, landed a jumbo loan this summer after being turned down three times in prior years, allowing them to buy a three-bedroom cottage-style home in Los Angeles for $1.645 million with a 20% down payment. “We thought we would get a lot less house for what we had,” he said.
Dr. Torkian said offering a larger down payment helped this time around, but he also sensed that lenders were more receptive. The couple, who have two young children and are first-time buyers, got a 30-year fixed loan carrying a rate of 3.75%. “It came a little as a surprise that the loan was so easy to get approved,” he said.
While loans below the conforming threshold far outnumber jumbos, their rate of growth these days is slower. Here are some reasons why.
Jim the Realtor is legit - I interviewed three brokers; he said list price should be $100,000 higher than the other two brokers; listed it with him and had all cash (no financing) offer in two days, five day contingency period, closing in two weeks - and it closed at his recommended list price. I could not recommend anyone more than I recommend Jim the Realtor.
When we moved to San Diego in 2005 we rented a big house on Mt. Soledad (La Jolla) with 180 degree ocean views for the same payment as a mortgage on a dump in Chula Vista. Clearly something was wrong. Yet, the media was full of the usual happy-talk nonsense, so I was glad to find Jim's blog. I've followed his honest assessments and data since.
We decided to sell and move to AZ at Thanksgiving. Dec. 1st we met with Jim to sell our home. We closed today (29 days later). Jim orchestrated a feeding frenzy -- we had 25 showings in 2-1/2 days, multiple offers, and sold for well over asking price. I'd say he earned his commission! We have owned and sold homes in 5 different States always using experienced, productive, full-time realtors. Jim outshines them all.
You don't decide to sell and close 29 days later over Christmas (with COVID lockdown) without some miracles. Donna was amazing at performing lots of those miracles and ensuring that everything was done right and on time. They are a terrific team with a very responsive and professional network.
Where do we begin..2020 has been a year for everyone. When COVID hit and shut down both my husband and my businesses, we were left with a mortgage and very little income coming in. We were stressed, scared and felt stuck. We made the hard decision to sell our home and move out of state. We contacted the Klinges' and spent a good hour going over what we hoped we could accomplish. Jim and Donna came over with comps in hand and suggestions on improvements to get our house ready for the market. It was overwhelming to think about, but Donna was there and one step ahead in every scenario. Basically we just approved what they suggested and Donna handled literally everything. We placed our house on the market and within the first day we had multiple offers well above asking price! We couldn't believe it. We were overjoyed! Jim countered the offers to weed through them, and everyone came back with way more. It was amazing, and we are ?? sure it was because of the staging and repairs the Klinges suggested we do.
Due to unforeseen dishonesty from the buyers lender, we hit a big hurdle when trying to close. We had already moved out of state and were shocked when three days before closing the lender dropped a bombshell on the buyers and us. However, Jim and Donna handled it like veterans, not afraid to play hard ball and represent their clients. After a few phone calls with us, and several between Donna and the lender, they had a plan B-Z to make sure we were taken care of. In the end we closed with even more money than we ever thought possible and with very little work from us. The Klinges handled this entire "2020" worthy event with the utmost professionalism and did everything in their power to not only make this as smooth as possible for us, but we also walked away with more money from the sale of the house than we ever hoped for. After working with Jim and Donna, you don't ever use anyone else. They are hands down the best team to represent you in any scenario.
Working with Klinge Realty Group was a great experience! They are very responsive, professional and knowledgable about the real estate market! I would definitely recommend Klinge Realty Group.
Jim and Donna Klinge made the sale of our condo extraordinarily easy. They know the market and gave us sound advice backed by details and very considerable experience, reflected both in the initial pricing and subsequent negotiations. They work together as a team and are always available to talk. We had a few challenges with our property and they were able to coordinate the resolution to everything, including items that I would not think would ordinarily be their responsibility to handle. They made the whole process effortless on our part. They are folks with high integrity and we cannot recommend them highly enough.
Review for Member: Donna Klinge
I cannot believe there are no reviews of Donna yet, ugh!! She is the secret sauce of the Jim Klinge/Donna Klinge combo! I will touch on Jim here, but Donna is why I'm so totally loyal to these two (no offense to Jim :)).
I consider myself a rather savvy buyer/seller. I've bought/sold 7 times in about 15 years. On the buy side, Jim is the PERFECT combo of: completely digitally savvy (he will pull data all day long until you feel comfortable with your chosen house, area, school district, anticipated appreciation rate...anything!), he's super well respected and known in the area by other agents, an amazingly cool but strategic negotiator, is totally devoid of desperation for a sale/commission, and more.
Then once you get into contract phase, Donna literally handles every last and final detail in a concierge-like manner -- totally shielding you from the daily back and forth, noodling and annoyances of the buyer's requests. She solves it ALL; it's miraculous what that woman accomplishes over and above what is even expected in a buy/sell transaction.
On the sell side, Jim and Donna do the same, but even moreso. Donna in particular truly takes everything off your plate: she'll manage getting the house painted, the carpets replaced, she'll go on site (as she Jim both did for me when selling our rental properties) to work with the renters and make sure the house is ready to show -- freeing me to have to take time off of work to do so. They work with A+ integrity, too, so you know you are serving all parties fairly and lawfully throughout.
A home purchase/sale is the most considered you'll ever make. HIRE A SAVVY AGENT, not a friend!, and get what you need out of the transaction. Jim and Donna are our agents for life.
Jim and Donna Klinge are by far the most professional, personable and responsive realtors I have ever worked with. They provide VIP concierge level service in every area of the process of selling your home. My home was marketed so successfully that we received an offer the day after our first and only open house. Thanks to Jim's pricing and negotiating, our house is now the highest sold in our community. Jim's vast experience means he has worked with several realtors and knows the market all over north county. Donna is AMAZING in processing everything in the transaction. She scheduled trades people to work on the house in preparation for the sale as well as the repairs needed before closing. She communicated clearly every step of the way about what would be happening. She took the weight off my shoulders for the whole process. I will always use Jim and Donna for my future real estate needs and I whole heartedly recommend them to anyone buying or selling a home.
Jim and the team at Klinge Reality are without a doubt the best in the business! Not only was Jim helpful and extremely knowledgeable, he was patient and determined to help me find my first home. Jim and his team have been in the business for many years, and it shows. Jim is a wealth of knowledge and was my biggest proponent despite the temperature of the competitive market. I ended up getting the perfect property in my dream neighborhood all thanks to Jim. From the day my offer was accepted, Donna was a real lifesaver. She was extremely helpful, responsive, and knowledgeable when it came to every minute detail, and held my hand through the process. As a first time home buyer I had no idea what the process would entail, but Donna curtailed every concern I came across and made the escrow process feel seamless. Jim and Donna provided me the best home buying experience, and I am very grateful for all they did for me. It was truly a pleasure to work with Jim and Donna and I am already looking forward to the next time we work together!
Review for Member: Richard Morgan
Richard is an amazing realtor! He has high integrity and genuinely cares about his clients and their needs. Richard paid close attention to what I was seeking in a home and was very patient in our search to find it. I would highly recommend Richard and will use him for future transactions. Truly a different kind of realtor experience!
Could not be happier with my experience with Jim and his team. He helped me sell a very unique and challenging property. Throughout the entire process he was always available, honest, transparent, trustworthy, and always put my interests as a seller first. A (rare) true professional! During close of escrow Jim went above and beyond to complete the deal. It would not have been possible without his experience, fantastic team, and pure dedication. Highly recommended!
Thanks Jim and Donna Klinge!