The State of California has already been cracking down on real estate “teams” or “groups” (click HERE), now New York has objected to the phony-baloney titles used by realtors.
Hat tip to Sol for sending this in from the nytimes:
Tens of thousands of real estate agents and brokers around New York were stripped of their corporate titles this year – senior vice president, managing director and the like – after the New York Department of State, which issues real estate licenses, said the use of corporate honorifics without any actual corporate duties was, in fact, illegal.
That legal opinion swept aside the days when a vice president and managing director of a large firm, like Mr. Dietrich, would take the time to help you sell a $419,000 one-bedroom apartment.
Since the State Department’s opinion was released in April — in response to a clarification request from the Real Estate Board of New York — countless stacks of business cards and brochures have been dumped in the trash, and Web sites have been scrubbed clean of titles by agents eager to avoid fines of up to $1,000 per violation.
“There was a fair amount of hysteria,” said Harriet Kaufman, a broker at Warburg Realty, and once upon a time, a senior managing director.
The inventory counts should settle down in the coming months due to the sellers’ perception that this is the off-season, and the distraction of the Chargers’ run for the Super Bowl.
The UNDER-$1,200,000 Market:
Date
NSDCC Active Listings
Avg. LP/sf
DOM
Avg SF
April 29
201
$384/sf
36
2,599sf
May 5
195
$381/sf
36
2,633sf
May 9
207
$387/sf
35
2,624sf
May 18
241
$397/sf
33
2,566sf
May 23
236
$397/sf
34
2,529sf
May 30
230
$391/sf
35
2,591sf
June 5
229
$393/sf
35
2,577sf
June 11
239
$390/sf
34
2,569sf
June 17
246
$389/sf
36
2,577sf
June 24
255
$397/sf
36
2,535sf
July 1
244
$401/sf
38
2,526sf
July 8
256
$398/sf
38
2,530sf
July 15
269
$403/sf
38
2,486sf
July 22
258
$401/sf
39
2,442sf
July 29
262
$386/sf
39
2,493sf
Aug 5
287
$393/sf
38
2,495sf
Aug 12
300
$391/sf
40
2,521sf
Aug 19
304
$395/sf
41
2,491sf
The OVER-$1,200,000 Market:
Date
NSDCC Active Listings
Avg. LP/sf
DOM
Avg SF
April 29
620
$806/sf
94
5,183sf
May 5
606
$806/sf
93
5,223sf
May 9
628
$808/sf
93
5,150sf
May 18
653
$807/sf
92
5,161sf
May 23
661
$814/sf
92
5,141sf
May 30
659
$805/sf
95
5,222sf
June 5
663
$794/sf
96
5,185sf
June 11
672
$779/sf
96
5,163sf
June 17
661
$787/sf
99
5,164sf
June 24
679
$791/sf
98
5,097sf
July 1
705
$785/sf
94
5,084sf
July 8
702
$779/sf
95
5,100sf
July 15
736
$776/sf
94
5,038sf
July 22
748
$782/sf
96
5,043sf
July 29
736
$782/sf
100
5,057sf
Aug 5
754
$765/sf
100
5,024sf
Aug 12
750
$767/sf
102
5,032sf
Aug 19
742
$769/sf
104
5,009sf
As long as the new pendings keep pouring in, nothing else matters. The market is pure enough that supply and demand will balance out the rest:
After hitting a three-year high in July, the dollar index .DXY, which tracks the greenback against a basket of six major currencies, has fallen nearly 3.7 percent. But the dollar has kept rising against the Indian rupee, which is down 13 percent against the greenback in the last six months and recently sunk to an all-time low against it.
A stronger dollar has “absolutely curbed my appetite to buy U.S. real estate,” said Anant Bokar of Mumbai, India, who has invested in property in the San Francisco area. “I would much rather hold my money at home and look at buying here (in India) since house prices are low due to higher inventory.”
San Francisco notched an annual price gain of 24.5 percent in May, according to Standard & Poor’s/Case Schiller home price gauge, the largest rise in its 20-city index.
International investors have been backing away from San Diego as well. Karen Van Ness, owner of Ranch and Village Homes, a Coldwell Banker brokerage, said demand there has fallen over the last three months.
San Diego prices jumped over 17 percent annually in May.
“They are watching, but they are not circling as they were,” she said, referring to prospective foreign buyers. “The international buyers are a financially astute group of individuals and not necessarily fixated on any one location.”
More experts expect the dollar to strengthen in the months and years to come as the economy improves and as the Federal Reserve tapers off a bond buying program designed to fuel the economy recovery. Interest rates are also expected to rise, although that is less important to buyers paying in cash.
Michelle Meyer, senior U.S. economist at Bank of America/Merrill Lynch in New York, said declining demand from foreigners will help moderate home-price appreciation in coming years.
She sees prices up 6.5 percent in 2014, after annual price increases of more than 10 percent though May, according to S&P/Case-Shiller.
If higher rates cause buyers to be more discriminating, wouldn’t prices drop to compensate? Not necessarily.
It will mean fewer sales first.
The wealthy are doing just fine, and a little blip or two in rates or prices won’t deter them from buying the top-quality properties. It’s the inferior properties that get punished when the market goes soft.
It’s the perfect storm for a slowdown in sales:
Buying season is over.
Post-frenzy exhaustion.
Higher prices and rates.
Over-zealous sellers aren’t satisfied with a home run, they are going for the grand slam, price-wise.
While it seems likely that sales counts will slow the rest of the year, it hasn’t happened yet.
Incredibly, the NSDCC closed sales for August 1-15 are 33% higher this year than in 2012 (154 vs 116), and late-reporters will add to that total.
Those sales had to be helped by the rate-spike in late June as buyers rushed to lock and close. But it can’t continue, can it?
Rich people will still be buying the top-quality properties. But if buyers get more discerning, more properties would be deemed inferior, and slow sales.
Sellers are notorious for responding very slowly, and after the run we have had for the last 12 months, they aren’t going to believe that they missed out….again. Lowering their price would cure the problem, but most sellers would rather pack it in for the year, and be more determined to make a killing next spring when the market “picks up”.
A market slowdown is predicated on buyers being willing to forego an inferior property now, and wait longer for house-perfect.
Rates are rising – they won’t mind waiting longer, right?
Because price is so important to making a good first impression on the buyers, it would make sense to make it attractive….and realistic. This price sounds like a mistake – or a joke.
P.S. Former owner paid $898,500 in 2005 and financed 100%.
Historically it is very rare to have pricing go up 20% in a year. With prices skyrocketing, wouldn’t you expect sales to slow down?
Or wouldn’t buyers at least become more selective when they are forced to pay substantially more, in many cases six-figures more, than they could have paid for a similar product 12-18 months prior?
For prices AND sales to be so strong for an extended period, there has to be virtually no buyer resistance.
Why? Buyers feel more empowered due to the internet, and just want in. They see a house, like the house, and after a cursory review of the comps and a pat on the back from their agent (a professional advisor whose expertise is rarely examined) they buy the house for whatever price it takes to win.
The buyers with a stronger attachment to the old prices/comps get left behind, and are forced to consider paying more later (when they didn’t like last year’s prices) – and have to live with the feeling that it doesn’t pay to be too smart in this environment.
Most realtors were never that good at valuations anyway, so the inexactness of pricing in a fast-moving market is no surprise. But the big jumps in pricing could continue, due to these factors:
“More inventory” means more not selling, not a flood of additional choices. Year-to-date there have been 43,900 listings in San Diego County, and last year there were 42,000 in the same period – not much increase overall. When you hear that there is more inventory, it means that there are more high-enders who are wildly overpriced, and don’t care. There is no inventory of good buys (they sell right away), and a very tight inventory of marginal buys under $1,000,000.
Flippers have gone crazy. In the beginning they were willing to flip for a $50,000 profit, then $100,000, but now they all want at least $200,000+ to be satisfied.
Because traditional realtors are making no effort to differentiate themselves, the new-age internet real estate portals have an open field. They offer gadgets and gizmos, but not resistance.
Mortgages are getting easier to obtain every day.
Any resistance is worn down by the difficulty of finding a good buy.
There will always be buyers who are willing to pay top dollar for the exceptional homes. The most fortunate sellers today are those who are selling the inferior homes – rigorous buyers will notice the difference, but those in a hurry and without discipline end up overpaying.
Higher mortgage rates are the only hope for a comeback in buyer resistance.
This Carmel Valley house with minimal upgrades (refaced kitchen cabinets) but nice exterior was listed on May 31st just as the frenzy was peaking. It listed on the range $999,000 – $1,099,000, and the buyers snapped it up during the first six days on market (and paid cash):
