San Elijo Hills Open House

My new listing at 1575 Archer Road in San Elijo Hills, where the schools are highly regarded – at the greatschools.org website, San Marcos High School is rated higher than Torrey Pines!

Only $599,000 for 2,876 sf! We will be open noon to 3pm this weekend:


Price Growth Into 2017 Predicted

No statistical evidence to back them up, just guesses…

If projections hold out, home values will rise 22 percent cumulatively by the end of 2017, according to Zillow’s first-quarter Home Price Expectations Survey.

For its report, Zillow and Pulsenomics surveyed a nationwide panel of 118 economists, real estate experts, and investment and market strategists to get their thoughts on future home values and housing market policies.

On average, the panel forecasts price growth of 4.6 percent in 2013 and 4.2 percent in 2014. More moderate growth is expected after that, with annual appreciation rates between 3.6 percent and 3.8 percent for 2015, 2016, and 2017, leading to an average 4.1 percent growth annually for the next five years.

Price Expectations

According to Zillow, this is the first time the predicted average annual growth rate for the next five years has surpassed pre-bubble levels since the survey was created.

“The panel is quite bullish on home prices near-term, considering a pre-bubble average appreciation rate of 3.6 percent per year,” said Dr. Stan Humphries, chief economist at Zillow. “That said, their expectations are a bit shy of the home value gains of 5.5 percent that we saw in 2012, implying some moderation in the pace of gains.”

“The panel expectations are consistent with continued strong home value growth this year fueled by tighter-than-normal inventory of for-sale homes and robust demand attributable to high affordability and a stronger general economy,” he added.

The most optimistic quartile of panelists predicted a 6.1 percent increase in home values this year, on average, while the most pessimistic predicted an average increase of 3 percent. Expectations for cumulative growth projections ranged from 34.2 percent among the most optimistic panelists to 11.7 percent among the most pessimistic, on average.

The panel also responded to questions on GSE wind-down and refinance options for underwater borrowers.

The majority of panelists—59 percent—said they believe a “reasonable and appropriate” timeframe for winding down Fannie Mae and Freddie Mac is within the next five years. Thirteen percent suggested a timeframe within the next two years, while on the opposite end of the spectrum, 10 percent said a period of more than 10 years is the most sensible.

In addition, the majority of panelists expressed support for proposals that would allow certain underwater borrowers to refinance; one such proposal is the Responsible Homeowner Refinancing Act of 2012, sponsored by Sens. Barbara Boxer (D-California) and Robert Menendez (D-New Jersey).

“More than four of every five supports of these refinancing proposals said they believe that borrowers who have demonstrated an ability to make their payments in recent years would pose little or no incremental risk to taxpayers if they refinanced. Two-thirds of supports said they believe that the lower monthly payments would create a significant stimulus for the economy,” said Pulsenomics founder Terry Loebs.

“But the 41 percent of panel respondents who do not support these plans also hold strong views. More than two-thirds of them said they believe that rewriting loan contracts is bad policy in general, and that lowered monthly payments for borrowers ultimately translate into taxpayer and investor losses,” Loebs continued.


Deep Purple

The first concert I ever saw was Deep Purple with Savoy Brown at Big Surf in Tempe, Arizona in 1974, not long after David Coverdale took over vocals.

This is the same tour, but from their stop at the Ontario Speedway for California Jam:

Real Estate Crowdfunding

I don’t endorse this company but I like the idea:

Realty Mogul, a site where accredited investors can can pool their money to back real estate deals, is going live today.

Co-founder and Jilliene Helman argued that in the current financial landscape, real estate is “one of the ways that people can still get yields.” She also acknowledged that there’s a lot of excitement right now about equity crowdfunding for startups, but she noted that investments on Realty Mogul can start paying off in a few months (in the form of rent checks or loan payments), rather than five or ten years: “Our big focus for investors is cash flow.”

For now, Helman said Realty Mogul is “100 percent focused on accredited investors” (to qualify as an individual, you’d need to have a net worth of more than $1 million or income of more than $200,000). She also suggested that these kinds of investments could also be a good fit for the “mass affluent” — i.e., people making more than $100,000 a year who aren’t accredited investors — but the company is currently waiting for the final regulations to come out of the JOBS Act before it decides whether to actually open up to that group.

Realty Mogul was incubated by the Microsoft/TechStars Accelerator in Seattle, and it’s also announcing a $500,000 seed round (more on that in a second). Participating angel investors include Gust CEO David S. Rose, Gordon Stephenson (who’s on the board of directors at Zillow), and serial entrepreneur Sky Kruse.

Even though it’s officially launching today, Realty Mogul already funded its first project — AH Capital used the site to raise $110,000 to purchase and rehabilitate a duplex in Los Angeles.

When you join the site, you can browse a marketplace of different investments, then sign the paperwork and submit the payment for deals that you’re interested in. The investment only happens if the total funding goal is reached. If it is, you can then track your investments in an investor dashboard.


Helman said that one of her big goals is to build investor trust. For example, Realty Mogul links to all of the real estate companies’ LinkedIn profiles, so users can see whether they’re connected to the company in some way. For now, the site is limited to properties in Washington and California, although investors can participate in anywhere. Helman said she plans to expand gradually.

“We are a tech startup, and tech startups are supposed to grow as quickly as humanly possible,” Helman said. “But we’re a financial services company first and a tech startup second, so I want to grow as quickly but as conservatively as possible. We need to make sure we’re keeping investor protections first.”

Other sites for real estate crowdfunding include Fundrise and Prodigy Network.


Waiting To Sell – Other Factors

Sellers are tempted to wait until prices go up higher before selling.

If it were just about selling for top dollar, you would have sold in 2007.

If you didn’t sell in 2007, it was because there were other factors that played a role in the decision-making.  Let’s examine the other pieces of the puzzle.

1.  Age – Moving is a life-changing event.  It is physically, mentally, and emotionally demanding, and suited for younger, healthier folks who can better handle the stress.  Don’t wait too long.

2.  Others – You are not alone.  Family and friends will influence your decision, and usually make you hesitate.   Kids want to finish school or will resist giving up the family homestead.  Parents get old and need to move in with you.  People at work will chide you for moving too soon or too late.  And heaven forbid if your dog gets sick at the wrong time.

3.  Neighbors – Oh, you are all powerful, and make all of your own decisions?  What if your neighbors panic, and cheap-sell right before the peak?

4.  Timing – This is the new abnormal, and there is no telling what will happen, or when.  You can keep your ear to the ground, and still not hear the right sounds.

5.  My Price – Sellers determine when, and buyers determine how much.  You don’t decide the price, the buyers do.  You will sell your house for what the market will bear, that is how it works.  Oh, you’re not selling unless you get your price?  OK, but your only choice is to wait – you can’t make a buyer pay your price.

6.  Mistakes – Sellers usually have some emotional attachment to their home, which can cause some blurriness when making critical decisions.  In other words, you are going to want to price your home too high, not do enough improvements, or select the wrong realtor, and possibly have problems with selling.  You can rebound, but it costs you time and possibly money.

7.  Wait One More Year – If you have other reasons to wait, fine.  But are you going to say the same thing next year?  Do me a favor – cut and paste this quote and put it on your refrigerator: Pigs Get Fat, Hogs Get Slaughtered.

8.  Seasonal – Selling during the spring doesn’t guarantee top dollar.

9.  Where Are You Going To Move? – Buying is harder than selling.  Why?  Because anything that goes wrong with selling can be fixed with price.  If you intend to buy again after you sell, spend ample time investigating the buy-side first.

Bottom Line – Plan ahead, and watch for high sales nearby.  If you have a flexible plan, and are just waiting for some high sales to help propel your price to the next level, you will be in a great position to get top dollar – but get the family to sign off first.

The house I just sold on Manzanita is the perfect example of a high sale for the neighborhood.  It had everything going right for it – a completely remodeled one-story with three-car garage on a good-sized lot with no HOA or Mello-Roos, but in a neighborhood built in 1978.  Do you think there could be some low sales too?  Yes, there are still houses with their original wood-shake roof!

It sold for well over list price, and will be the comp that helps propel the neighborhood to the next level.  Watch for those new listings in your neighborhood, and prepare to implement your plan in 30-60 days later once they close escrow.  Then list your house for sale the next day!

Alta Del Mar Model Tour

Here are snippets from the VIP Grand Opening of Alta Del Mar.

There were a number of people there hampering the videography, but it wasn’t overly crowded – why?

Because they already have 170 buyers who have pre-qualified with the builder’s lender to be on the list to purchase:

1. Semi-custom tract homes priced between $1,875,000 and $2,400,000, or

2. Vacant lots priced from $740,000 to $2,000,000 for custom homes.

JtR’s Crystal Ball

MB Mike asked a follow-up:

In terms of timing, what does your crystal ball say 2014 will bring? Better to wait a year to sell?

Yes, wait if general market conditions are your guide.

Real estate is reported as ‘up’ or ‘down’, and it will be ‘up’ for a while.

The media loves real estate, and will be following it closely in order to sensationalize every bump and wiggle.  The more good news that buyers see and hear, the higher their anxiety, and the more they will pay to end the struggle.

The current frenzy conditions feel exactly like they did in the 2003 run-up.  Here’s the Case-Shiller Index (seasonally-adjusted):

Case Shiller San Diego

I think we will experience the same trajectory as we did in 2003, and maybe faster if inventory grows at the perfect rate – which is more inventory please, but not too much. 😆

There are going to be pocket areas/markets that show 10%-20% appreciation in the first half of 2013.

They are the lower-priced segments of premium areas – homes under $900,000 in Carmel Valley, the $600,000-$700,000 market in Rancho Penasquitos, and the under-$700,000 market in Carlsbad are examples.

Yet, you can go to Rancho Santa Fe’s $3,000,000+ market and find 119 active listings – and four have closed in the last 30 days.

When to sell is relative to your location, price range, and what you are selling.  Here are the Three Amigos discussing it:

Let’s also note that you won’t see the bad news coming that could derail your quest for the extra pop, because bad news always sneaks up on you.  Examples:

1.  Flash flood of competing sellers nearby.

2.  A sudden increase in mortgage rates caused by market forces, which the Fed can’t control.

3.  Realtor fraud, creating a low comp or two.

4.  Natural disasters – earthquakes, etc.

5.  Man-made disasters – nuclear war by the North Koreans, etc.

Any of those reasons would cause buyers to quit chasing the pricing stampede, and get back on the sidelines to watch and wait for prices to go down.  Many people, mostly the W-2 employees, have already been priced out of the areas they thought they could afford, and are left searching for alternatives; which amount to inferior neighborhoods, hitting the lotto, or waiting.

Don’t rely solely on what you see here at Bubbleinfo.com.  We specialize in selling superior products in premium areas, and the examples seen here are the cream of the crop.  Generally the demand is very deep currently, but it will dry up in the more-standard areas first.

Get good help!

San Diego REO Pricing

Institutional investors entered the housing market at a rapid pace this past year, but their level of purchasing activity is relatively small compared to the overall market.

For instance, Blackstone Group is expected to be the largest institutional purchaser in 2013, committing to 15,000 properties.

However, when compared to the 600,000 individual investor purchases in 2012, it’s clear that institutional investors are still the underdogs in the market, according to CoreLogic’s market pulse report.

To come to this conclusion, CoreLogic created a list of 16 markets that include the top five markets for REO declines, the top 10 markets ranked by the total of REOs and the top REO markets identified as attractive by investors.

REO pricing YOY

San Diego had the highest increase in 4Q12 REO prices of the cities that don’t have a rising share of institutional investors.  Go Mom and Pop!

Read the full article here:


Sell Now Or Later?

MB Mike asked 2 questions:

  1. If you were a prospective seller and had a pretty open time frame to sell (say you planned to sell sometime in the next 3 years) would you hang on to realize more appreciation?
  2. With so many buyers, it must be tough for agents to get listings. Is there any wiggle room in terms of seller’s agents commission? Seems the standard is 2 1/2%.

First question – The ideal time to sell is right after one or two high sales close in your neighborhood.  The way it has been going lately, those will have closed for 5% to 10% over the previous comps (or higher), and you can tack on another 5% to 10% to your list price and see if you can pop it up to the next level too.

You can still hit a home run without them, but the recent comparable sales ensure smoother sailing with the appraiser, and keep the buyers focused on the finish line.  These major bidding wars that drive the sales price to more than 10% above list price are certain to be filled with serious buyer’s remorse, and expectations of buying a house in perfect condition.

Wouldn’t it make sense to wait until other sellers pave the way to additional riches?  Yes, but you risk unforeseen problems cooling off the frenzy, with the number one threat being a flood of inventory.  If a handful of neighbors on your block hit the market this month, or realtor fraud causes a low sale or two, you can bet that buyers will back off, or back down on price.

Second question – The listing agent’s commission has been incredibly resilient.  In the vast majority of cases we see, the total commission is split 50/50 between agents, though the listing-side commission isn’t always disclosed to us.  Have you noticed that commissions are never disclosed to the buyers?

Regardless of the amount of commission paid, sellers need a bidding-war specialist on your side so you can reap the benefits of today’s market.

I saw an agent who had only two sales in the last year – both were $200,000 condos – get buried with 30+ offers recently.  She had no idea how to handle that, let alone be able to employ a strategy to take advantage.

Sure you can just stack them up and take the highest one and forget the rest (which she did), but respectfully pitting them against each other will reap additional rewards, usually at least 5% extra to the seller (and pay for the entire commission!).

Get good help!

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