I was on CNBC’s Street Signs show today, and Kayla joined me to capture my two lines on video.
They didn’t give me the questions in advance, the TV monitor is out of sight due to the 7-second delay, and the local cameraman had mis-wired the earpiece so I was getting my own voice fed back to me a split-second later.
Click HERE to see Kayla’s behind-the-scenes video.
I’m listening to Diana’s report in one ear, then it’s showtime. I give my meat-and-potatoes advice that is applicable to every market, coast-to-coast, and the next agent starts on national TV with how he makes his sellers price right.
These items will have a direct impact on your ability to sell for top dollar, and make the sale more predictable too:
1. Sell When You Have Good Comps – There’s nothing wrong with letting a neighbor (or two) be the guinea pig, and sell their house first. Once there are a couple of strong sales nearby, it is much easier to justify your top-dollar price.
Similarly, if there have been a couple of bad sales recently, wait at least six months after they have closed before selling. Appraisers can’t use them if they are more than six months old, but buyers are known to have longer memories.
2. Sell When There Are Good Active Listings Nearby – Ideally you’d like to have recently-closed sales to help justify your case, but if you don’t have those, the next best thing is to undercut the unsold listings nearby. You will look like the ‘best buy’ only if you drastically undercut the competition….by at least 5%. Buyers probably know the others are over-priced, so just under-cutting them by a few bucks isn’t enough.
3. Sell Right After Home Improvements – Retail buyers (the ones who pay top dollar) don’t want the fixers, they prefer the cream puffs. Shiny new improvements lose their luster quickly; so if you need to fix things, spend the money and then list your home the next day.
4. Sell When New Tenants Move Out Nearby – Are you among the unfortunate owner-occupiers who have to endure tenants next door? Did the renters with five kids and 14 yapping dogs just move out? It’s a good time to sell! Or conversely, if a great couple with no noise-makers just moved in, sell before they move out!
5. Sell When You Go On Vacation – If it all goes right, dozens of strangers will be pouring through your house with little or no notice the first few days on the market. If that idea bugs you, go on vacation the day your house goes on the market – especially if you have a lot of kids and pets.
6. Sell Before You Get Old – You might chuckle, but it’s true. For most sellers, moving means: a) having to sift through all the old junk that has been stored away for years and decide what is worth keeping, b) packing and unpacking, c) dealing with a lot of unknowns – strangers, moving, new home, getting settled again, etc., and d) making life-changing decisions. Don’t underestimate how exhausting the transition can be.
7. Sell Once You Know Where You Are Going – You have to be 100% committed to moving. Why? Because once a seller signs the purchase contract, you cannot cancel (only the buyer can). In addition, if you don’t know where you are moving, you will price your home too high, and it won’t sell.
Many sellers need to leave town to make it worth it. If you are thinking that you’ll just rent for a year or two and find a smaller place later for half-off, recent history has shown that it is very difficult to score a big discount in the great neighborhoods. If you opt for that program, be prepared for the other option which is perfectly acceptable – you may rent the rest of your life.
8. Sell in March or July – We are fortunate to enjoy a 12-month selling season in San Diego. Everyone thinks that hitting the market during the Spring Selling Season is the most productive, but there is usually more competition too.
If you wanted to time your own move around spring or summer, then focus on March or July. If you list in March, hopefully there were already 1-2 of your neighbors who were successful in Jan/Feb, and you can ride their coattails. March is the safest bet, because April’s market has a lull due to taxes, May/June is graduation season, and summer is full of vacations. Or wait until the last minute and list in July once all the good buys have been taken (and hopefully several of them sold for astronomical prices) and school is bearing down on the family buyers.
9. Get Good Help! It was easy in 2013, but homebuyers are more particular now that we have much-higher pricing. Spend a little more on sprucing up your home, be sharper on price, and don’t just hire any realtor off the street – get good help!
Hat tip to daytrip for sending this in fromcnbc.com:
The sharp rise in home prices in 2013 caused two conflicting results: The return of positive home equity for hundreds of thousands of borrowers and considerably weaker affordability for an equally large pool of potential homebuyers.
While positive equity allows more borrowers to move, weaker affordability keeps them in place. So which will be the greater driver of housing this spring?
“There’s going to be a reality check in the spring in terms of realizing that what we saw in 2013 is not a real market,” said Daren Blomquist of RealtyTrac, a real estate sales and data website. “It’s a nice bounce-back market, but ultimately you need the biggest pool of potential homebuyers out there to be able to afford those homes.”
In an analysis of housing affordability, RealtyTrac found that the estimated monthly house payment for a median-priced, three-bedroom home purchased at the end of 2013 was a whopping 21 percent higher than it was at the end of 2012 in more than 300 U.S. counties. That includes mortgage, insurance, taxes, maintenance and the subtracted income tax benefit.
The rise is the result of higher home prices and higher mortgage rates. RealtyTrac used a 30-year fixed-rate mortgage with an interest rate of 4.46 percent and a 20 percent down payment. That is versus a 3.35 percent interest rate the previous year.
Some metro regions, especially in California and parts of Michigan, saw monthly house payments rise about 50 percent from a year ago.
We saw the grand opening at Davidson’s Arterro, and the video included snippets of all three models – but only showed the kitchen of the Plan 4x.
A reader asked for high definition, and while I knew I had HD cameras, the editing needed to be in hi-def too – so I think I’ve figured it out.
The camera’s auto-focus is a little slow to adjust, but this should be a better-quality video – especially if you go full-screen. Here’s the complete tour of the 4,434 sf Plan 4x model – in high definition:
This video is broken up with photos because Youtube is concerned about copyright infringement, and background music triggers their auto-sensors.
Whether you look at individual sales or market data, we are back to the highest prices ever seen in the hottest areas of town. I couldn’t get these all on one, but looking at two graphs might be easier anyway.
Carmel Valley, Encinitas, and Carlsbad are approaching new peaks:
This graph helps illuminate how hot the frenzy was last year throughout the state – where both sales and median prices were on a tear the first half of the year (May was the peak for median price). But both dropped off in the second half too:
PropertyRadar said California sales in January were down 18.7% from December, and 11.8% from January, 2013. The C.A.R. released this today, saying that San Diego County sales in January declined 22% in both M-O-M and Y-O-Y comparisons:
But this year around NSDCC, we are tracking about the same amount of closed sales as last year for the Jan. 1 – Feb. 14 period, even though the median sales price has risen 18%, from $863,750 to $1,015,000.
There are going to be conflicting reports, and speculations presented as facts. But in affluent, desirable areas, the market should stay ‘hot’.
Possibilities:
A. The spring selling season doesn’t produce a whole lot more inventory. Sean’s report mentions how sellers don’t want to list unless they know they can find the next house, which is probably true.
But there is also a group of homeowners – those previously underwater, and those empty-nesters – who will decide that staying put isn’t so bad, and they give up the thought of selling. For many, it beats the hassle of trying to figure out all the pieces to have moving make sense.
B. Prices keep rising (list prices are in a full gallop), and some buyers quit.
Long-time lookers have to cope with major sticker shock to buy the same house they wanted 2-3 years ago. Will they? Can they? Many are hoping for a miracle, but prices are going the wrong way for the lucky buy.
Summary: We are experiencing the highest prices ever, and the intensity is rising. With A & B above taking out players on both sides, we should see higher prices on fewer sales. Get good help!
In the previous video, Brandi mentioned that sellers enjoy a real urgency early in their listing period. Today’s market is a good example – because every decent buy gets snapped up right away, all new listings get immediate attention.
The North SD County coastal region has been hot up to around $1,400,000 – homes priced above that have a much different supply-and-demand curve.
Here are the current active and pending listings of NSDCC detached homes:
Price Range
# of ACT
# of PEND
A/P Ratio
PEND Median DOM
UNDER $1.4M
256
235
1.09
15
OVER $1.4M
527
106
4.97
52
On the lower end, literally half of the pendings found a buyer in the first 15 days on the market.
This dynamic can be used by both sellers and buyers. Sellers who price sharply from the beginning can help create a fever pitch, and have a bidding war push the sales price higher. Buyers who see homes on the market for more than 15 days know that something might be missing.
The NAR and realtor.com aren’t likely to keep up with the spending, so the future of home-selling will probably be determined by who wins the war below. Zillow has already shown the killer instinct that Redfin lacks, and if they succeed in getting the most eyeballs, then agents will be forced to buy their advertising.
Everyone loves a good rivalry, and perhaps none have been quite as fun to watch as the matchup between Seattle-based Zillow and San Francisco-based Trulia.
These two online real estate companies have been at each other’s throats for years, a fight that has resulted in litigation and plenty of bombshells back-and-forth. In many regards, Trulia has followed on the heels of Zillow, whether it has been around launching apps, new features or going public.
Now, it’s going to be fascinating to watch this play out in the advertising sphere. On Wednesday, Zillow CEO Spencer Rascoff announced a bold plan to spend up to $65 million on national advertising in 2014, a huge uptick from the $40 million in spent in 2013 (the first year it advertised).
Of the 81 new listings to hit the MLS in the last seven days, only 2 went pending. True, agents are waiting longer to let offers trickle in, but two is almost a goose egg.
North SD County’s Coastal Region (La Jolla-to-Carlsbad)
Thinking of selling your home?
