Half Sold Over List

by | Nov 7, 2013 | Frenzy, Market Buzz, Market Conditions, Why You Should List With Jim | 2 comments

From C.A.R.

LOS ANGELES – More properties were sold above their asking price this year, as tight supply conditions continued to heat up market competition in the first half of 2013, according to the CALIFORNIA ASSOCIATION OF REALTORS®’ (C.A.R.) “2013 Annual Housing Market Survey.”

Nearly half (49.5 percent) of all homes sold in 2013 were sold above asking price, nearly twice the share in 2012 (25.9 percent) and triple the share in 2011 (16.6 percent).

The 2013 figure was more than twice the long-run average of 18 percent during the past 20 years.  For homes that sold above the list price in 2013, the median premium paid over the list price was 4.8 percent, unchanged from 2012.

For the third consecutive year, an increasing number of home sellers – nearly half – planned on purchasing another home in the future.

“Sellers are more upbeat about the housing market and are more comfortable with their financial situation.  As the real estate industry and the economy continue to recover, many sellers regained confidence in owning a home since the Great Recession,” said C.A.R. President Don Faught. “The number of home sellers planning on repurchasing, in fact, increased to the highest level since 2007, which suggests that repeat buyers could be the driving force in the housing market in 2014.”

The shortage of housing supply intensified further this year, leading to heightened market competition and more multiple offers, with more than seven of 10 home sales (72 percent) receiving multiple offers in 2013, up from 57 percent in 2012.

The 2013 figure was the highest in at least the past 15 years, with each home receiving an average of 5.7 offers, up from 4.2 offers in 2012 and 3.5 offers in 2011.

 http://www.car.org/newsstand/newsreleases/2013releases/2013ahms

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Norris on 2014

by | Nov 7, 2013 | Forecasts, Jim's Take on the Market

brucenorrisBruce Norris, president of The Norris Group, which hosted the event “I Survived Real Estate” that drew to 450 ticket-holders and more than 85 tuning into a live webcast and raised $90,000 for Make-A-Wish and St. Jude’s Children’s Research Hospital, said he feels optimistic about where Inland Southern California will land price-wise in 2013 and 2014.

“For those of us that owned real estate, for the first time in awhile there were aggressive price increases,” he said. “It caught a lot of people by surprise.”

With underwater levels dropping by California Association of Realtors statistics to 15 percent, Norris said he thinks more people will hang tight and keep their house from  going into default. Despite having 3.1-months of inventory as of August, Norris said, “Motivation for strong upward movement in price still exists in 2014, as it did in 2013.”

Last year, Norris correctly predicted price gains of 20 percent in a Southern California market that was still somewhat hobbled by the recession.

No percentages were cited by Norris this year.

He told the audience he is still asking questions about changes in the California’s mix of sales. “When you are at three months of inventory, shouldn’t you have price depression?” he asked rhetorically, and said: “We believe the demand still exists, and it’s landing on inventory that’s half of what it could be, so we will have price aggression.”

More equity sellers are heading into the mix. Delinquency and foreclosure rates are improved. The pool of international buyers is growing. On the other side of the equation, Norris said he is mindful that: First-time buyers are being squeezed out of the market.  New home construction could be a game-changer.

“The percentage of first-time buyer sales in 1995 and 1996 was 50 percent,” Norris said. “Now, it’s at 28 percent. They are getting beat out by cash buyers, or they can’t qualify. That’s the missing link to me.”

Read the full story here, with opinions from other experts:

http://blog.pe.com/business/2013/11/06/real-estate-forecast-for-2014/

Telephone Line – ELO

by | Nov 6, 2013 | Wednesday Rock Blogging

The Electric Light Orchestra released four albums during my high schools years, and was a major musical influence in the 1970’s.  ELO toured in 1977 with the first lazer light show I’d ever seen – and it was unforgettable. Jeff Lynne was acknowledged as the fourth-greatest record producer of all-time, and has played with, or produced, everyone from the Beatles to Joe Walsh.

This is from a show that was taped at the beginning of their 2001 reunion tour that was subsequently cancelled, most likely due to 9/11:

http://en.wikipedia.org/wiki/Jeff_Lynne

Encinitas Tester

by | Nov 6, 2013 | Bubbleinfo TV, Encinitas | 1 comment

One of these same one-story plans down the street listed for $629,000 on May 2nd, at the height of the frenzy.

It closed for $682,000.

Will the next buyer consider $682,000 an legitimate indicator of market value, or an outlier?

Random Observations

by | Nov 6, 2013 | Jim's Take on the Market, Why You Should List With Jim | 5 comments

1.  The frenzy re-sort is underway, as hopeful sellers wait for the lucky sale to come their way.  There isn’t any panic in the streets because sales remain strong, and very few sellers need to sell bad enough that they will dump on price.  Besides, holding out has been working for many.

2.  Ivory-tower types like cnbc.com keep hammering at reasons why the market will cave – HT to daytrip for sending in the latest on weak household formation.  But meanwhile it is rare that you can find a decent house under $700,000 around NSDCC, and if you want more than just a house that will do for now, expect to spend at least $900,000.

3.  To make sense of the market, it helps if you can discharge all previous assumptions and beliefs.  Big money is here, and has been providing adequate demand to soak up most of those sellers who are willing to tune their price.  Example:

There were more NSDCC 3Q sales this year than last year (881 vs. 845), even though average pricing was 18% higher ($440/sf vs. $373/sf).

4.  Agents for flippers are poor bluffers.  They all seem to have offers that just came in, but then weeks and months later they are still unsold.  To smoke them out, I like to ask an unusual question to catch them off-guard, like “Yeah, how much?”. You can tell they are bluffing by how they react.

5.  I have seen a couple of flips that were purchased a couple of years ago get relisted, and they don’t wear well.  Because they are basically a lipstick job done with the cheaper materials, they look bad quickly.  Flooring in particular was used up, and cabinet doors and drawers showed wear-and-tear, and were out of alignment.

6.  With few new homes being built, flippers are enjoying a clean shot at the buyers who want/need a new look.  Unfortunately there are very few new homes or flippers in the higher price ranges, making it more difficult to find a turn-key home.  Buyers need to adapt, and get comfortable with buying a home that needs work.

7.  I haven’t had an REO listing assigned to me this year, and like many former REO-listing agents, have been scrambling to secure organic listings.   The new effort is still on-going, but so far 60% of my sales this year have been representing sellers.

8.  Many are already anticipating next year, and it should be a wild one!

Realtors and The Future

by | Nov 5, 2013 | Jim's Take on the Market, The Future | 7 comments

The N.A.R. has been releasing their annual surveys over the last couple of weeks.  The big kahuna was the 2013 Profile of Homebuyers and Sellers, linked here:

http://www.realtor.org/news-releases/2013/11/home-buyers-and-sellers-survey-shows-lingering-impact-of-tight-credit

Watch the first minute of the video and you’ll see why N.A.R is doomed, and must be oblivious to the threat of the younger upstarts like Zillow.

Their audience is an older group, however.  Today, 11% percent of all realtors are under 40 years old, and 44% are over 60 years old!

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A quarter of the realtor population is over 65 years old!

The business hasn’t changed much since its inception, but if there was ever a time that was ripe for revolution, this would be it.  Many, and probably most, of the agents in the business today will be leaving over the next 5-10 years!

What’s going to change?

N.A.R. and the national franchisors aren’t going to rock the boat, because the current commission-based sales package works well enough for them.

What could change the process? The auction format.

All we need is for a few celebrities to successfully auction their own home, and then become spokespeople for the home-auction reality-TV show!

Those in the business would be slow to adapt, so it would take an outsider like auction.com to elbow their way in and try to take over.  But with most agents on their way out, now would be a good time for a revolution!

Here are the realtor stats from the N.A.R. website:

In 2012, the typical agent had 12 residential transaction sides – up from the previous year when the typical agent had 10 transaction sides.

  • Additionally, 24 percent of residential brokerage specialists had at least one commercial transaction side in the last year.
  • The typical agent had one transaction side involving a foreclosure and one transaction side involving a short sale.
  • The typical agent had a sales volume of $1.5 million in 2012, up from $1.3 million in 2011.
  • For the third year in a row, the difficulty in obtaining mortgage financing was the most cited reason for potential clients being limited.
  • The typical property management specialist managed 49 properties in 2012 – the highest number on record in this survey.
  • The median gross income of REALTORS® was $43,500 in 2012, up from $34,900 in 2011.

Auction By MJ

by | Nov 4, 2013 | Auctions | 5 comments

We’ll see if it sells, but if it does and gets a good pop, then maybe the auction format will gain more acceptance as a preferred way to sell homes:

Concierge Auctions, the auction house overseeing the sale of Michael Jordan‘s sprawling estate, has released this video tour of the mansion and its surrounding grounds for potential buyers. The Highland Park residence is set on 7.39 landscaped acres and offers would-be buyers the ultimate in privacy and luxury. Designed by Michael Jordan, the mansion boasts 56,000 square feet of space, and features nine bedrooms, 15 bathrooms, a regulation size, NBA-quality basketball court, and a beautiful pool.

Inventory Watch – Holiday Season

by | Nov 4, 2013 | Inventory

It’s November, so the squeeze for quality gets tighter as many buyers check out for the holidays. Only the best buys will be getting attention.

In the UNDER-$1,200,000 market, the DOM has increased 44% in the last six months as the frenzy-sorting continues:

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
Aug 26
308
$392/sf
41
2,469sf
Sep 2
304
$395/sf
41
2,453sf
Sep 9
303
$402/sf
40
2,453sf
Sep 16
309
$395/sf
39
2,463sf
Sep 23
311
$398/sf
40
2,431sf
Sep 30
293
$398/sf
42
2,448sf
Oct 7
280
$394/sf
43
2,451sf
Oct 14
278
$398/sf
43
2,432sf
Oct 21
273
$402/sf
47
2,428sf
Oct 28
267
$408/sf
49
2,432sf
Nov 4
264
$408/sf
52
2,436sf

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
Aug 26
740
$781/sf
106
4,962sf
Sep 2
736
$773/sf
107
4,928sf
Sep 9
724
$781/sf
108
5,006sf
Sep 16
738
$773/sf
107
4,993sf
Sep 23
736
$776/sf
109
4,953sf
Sep 30
717
$765/sf
111
4,954sf
Oct 7
709
$769/sf
111
4,960sf
Oct 14
719
$780/sf
111
4,965sf
Oct 21
704
$781/sf
111
4,976sf
Oct 28
702
$766/sf
114
4,993sf
Nov 4
684
$762/sf
112
4,975sf

For the second week in a row, only one of the new listings went pending. Of the previous week’s 54 new listings, only eight have gone pending in their first 14 days on the market:

Weekly NSDCC New Listings and New Pendings

Week
New Listings
New Pendings
May 30
70
84
June 5
87
64
June 11
77
69
June 17
73
66
June 24
100
69
July 1
86
64
July 8
81
53
July 15
106
54
July 22
105
89
July 29
71
74
Aug 5
105
64
Aug 12
77
61
Aug 19
88
73
Aug 26
87
77
Sep 2
76
55
Sep 9
85
58
Sep 16
102
61
Sep 23
84
54
Sep 30
73
80
Oct 7
80
61
Oct 14
78
53
Oct 21
70
63
Oct 28
54
40
Nov 4
63
53

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