Happy Day After Thanksgiving, and welcome newcomers!
In case you are new to the blog and just heard about us from one of your relatives over turkey dinner last night, I’ll recap where I think the market is, and what to expect for early-2014 around North San Diego County’s coastal region (NSDCC):
1. We should be in for less frenzy in 2014.
Last year’s fourth quarter was red hot, which propelled the best spring selling season since 2003, when everything was flying off the shelf at any price.
Here are the October/November comparison of NSDCC sales:
There will be some late-reporters to this year’s totals, but the 427 closings shows that the demand has stayed strong, though this year’s 15% increase in average pricing should temper the enthusiasm of buyers next year.
Recently, I predicted that pricing would fall flat next year, due to profit-driven sellers flooding the market in spring. But reader Mozart disagreed, and thought we will see 7.2% appreciation in 2014 – and most pundits are predicting somewhere in between.
2. The threat of distressed sales is over.
Because bank-owned listings and short-sales have both dropped substantially this year, it appears that banks have stopped foreclosing (either everyone went back to making their payments, or the lending industry has generously adopted the payment-plan philosophy). Without the pressure of losing your home, no one will feel the need to give their house away.
3. There is opportunity with fixers.
The pursuit of turn-key newer homes has been ferocous, and driven by several factors; A) virtually no new homes for sale, B) buyers’ inability to fix things, and C) higher prices lead to higher expectations. As a result, there is less competition for the older fixers – but stay picky about location!
4. Comps have never mattered less.
A big shock to everyone involved, especially given the abundance of data now available. All year, buyers have been waiving their appraisal contingency, and willingly paying well over appraised value. Big Money is always involved, either an all-cash buy or big down payment, and apparently it has come to the point where people value their real estate more than their money.
5. How real estate is sold won’t change much in 2014.
We are close to some sea changes – auction.com is trying to pioneer the auctioning of residential homes as a retail solution, Zillow is dominating the on-line competition, Redfin got another $50 million in VC money to blow, and Berkshire got into the residential market this year – but the focus of 2014 should be on closing sales and building market share before anyone gets around to changing the process.
Stick around, we’ll be in dogged pursuit of the market here at bubbleinfo.com!