There has been a tectonic shift in how people view their real estate. Advancement and ego raged through the last boom, but now the mindset has turned conservative, and many are paring down.
At the band’s induction into the Rock and Roll Hall of Fame, the Clash was said to be “considered one of the most overtly political, explosive and exciting bands in rock and roll history.” Their songs tackled social decay, unemployment, racism, police brutality, political and social repression, and militarism in detail.
Joe Strummer died suddenly on 22 December 2002 in his home at Broomfield in Somerset, the victim of an undiagnosed congenital heart defect.
He’s not a realtor, his company doesn’t sell real estate, and frankly, he is just spewing guesses disguised as facts, just like the rest of the ivory-tower crowd.
In his latest installment – and the second time he has said this on national TV – he says that the low inventory is caused by homeowners being underwater.
But in San Diego, LA, and San Francisco where prices are back to peak or higher, the inventory shortage hasn’t changed. In NSDCC where average pricing has increased 34% over the last two years, the number of new listings is dropping!
NSDCC Detached-Home New Listings Jan 1 – Apr 15
Thousands of homeowners are regaining equity every day around here, and yet they aren’t moving. Why are they not moving? Here’s what I see in the field:
1. Finding a decent home at a decent price is so hard that NOT moving is easier and more convenient.
2. Remodeling is a viable alternative.
3. You have to leave town to make it worth it – people don’t want to leave.
4. Self-employed people who cheat on their taxes don’t show enough income to qualify for a new mortgage, and get stuck in their old house.
5. Sellers waiting for higher prices because they don’t have to move.
It is sad commentary that N.A.R. and other organizations who are in a position to report the facts are remaining silent. Zillow is becoming the go-to company for real estate reports, solely because they are the only ones doing the talking.
Attention national media: I am willing to give honest and accurate quotes – call anytime! Or at least take what you see here and investigate for yourself – these ivory-tower guys don’t know what they are talking about.
Here’s a bidding war I got tangled up in but lost to a cash offer who paid over list to get it. The LA marked the sales price as $1.65 million in the MLS, but the tax rolls show different.
The property is similar to those on Crest nearby, with over an acre and a decent ocean view from upstairs. The interior was tasteful without being over the top, and it is really a single story home with a rumpus room+bath upstairs.
We thought it might not attract as much attention due to the vacant lots on two sides, the funky nature of the surrounding area, and traffic on Birmingham.
But boom – at least three offers, and a couple from La Quinta won it:
San Diego’s Case-Shiller Index continued its steady rise, but according to David Blitzer, we might be the lucky ones:
“Prices remained steady from January to February for the two Composite indices,” says David M. Blitzer, Chairman of the Index Committee at S&P Dow Jones Indices. “The annual rates cooled the most we’ve seen in some time. The three California cities and Las Vegas have the strongest increases over the last 12 months as the West continues to lead. Denver and Dallas remain the only cities which have reached new post-crisis price peaks. The Northeast with New York, Washington and Boston are seeing some of the slowest year-over-year gains. However, even there prices are above their levels of early 2013. On a month-to-month basis, there is clear weakness. Seasonally adjusted data show prices rose in 19 cities, but a majority at a slower pace than in January.
“Despite continued price gains, most other housing statistics are weak. Sales of both new and existing homes are flat to down. The recovery in housing starts, now less than one million units at annual rates, is faltering. Moreover, home prices nationally have not made it back to 2005. Mortgage interest rates, which jumped in May last year and are steady since then, are blamed by some analysts for the weakness. Others cite difficulties in qualifying for loans and concerns about consumer confidence. The result is less demand and fewer homes being built. “Five years into the recovery from the recession, the economy will need to look to gains in consumer spending and business investment more than housing. Long overdue activity in residential construction would be welcome, but is certainly not assured.”
These are the non-seasonally adjusted numbers below:
This index doesn’t tell us much about the future, other than it has been steady around here for a while!
The year-over-year comparisons will continue to expose how hot the frenzy was last year. Most of the reports and opinions jump to the conclusion that housing is lagging this year, but when you compare it to the previous period it looks pretty good – at least around here.
In fact, it is amazing that we are keeping up with the previous years’ sales counts, in spite of the average pricing being 34% higher!
NSDCC Detached-Home Sales between March 1 and April 15
The pace this year feels more measured, which is a good sign. But the pricing has increased so quickly, you have to wonder if it is sustainable. Sales would dry up first – but so far they look pretty good.
The edge of the continent is a fascinating place for many reasons.
From a real-estate perspective, it is fascinating how much people will pay to have a front-row view – a position that comes with a somewhat-uncertain future when you are on the cliff in Encinitas.
There have been four closed sales in this stretch since the beginning of the year, from $2.038 million to $10.5 million:
As you will see, the bluff is exposed to the elements, and it doesn’t look like it will last forever. But it does provide privacy and a bigger view than if you were merely at beach level:
P.S. This was meant to be a review of the bluff – if any residents don’t like it, I will gladly delete. No offense intended.
There was a pop in the lower-end inventory this week – 20 more listings were added to the Under-$800,000 category. Compare today’s inventory to early-February, and not only are there more homes for sale (to be expected), but the average list pricing is lower in every category:
North SD County’s Coastal Region (La Jolla-to-Carlsbad)
The UNDER-$800,000 Market:
The $800,000 – $1,400,000 Market:
This area – near CSU San Marcos – isn’t pure residential. Not only does the Sprinter go through, but it also has several commercial and industrial businesses along Barham. So there isn’t a bunch of organic residential traffic to help boost the open-house attendance.
The goal with this video was to help document how many people attended our open house yesterday – another 70! They aren’t just looking, they are making offers too:
Richard and I split the open house today – I took the second half and had a steady stream of folks until 4pm, an hour after the scheduled closing time. He had the same flow, which means there had to be 60-70 visitors.
It’s one thing to have a big open-house crowd in a coastal location off a well-traveled street. Today’s open house in San Marcos couldn’t have been more off the beaten track. It isn’t a large tract of newer homes that would naturally have good access – heck, two GPS systems couldn’t find it. If people were successful in following the 10 open-house signs, they still had to be patient enough to call for the code to open the gate.
Because this house is at the top of the hill in the back of the community, there wasn’t a lot of neighbor-looky-loos either. Instead of tourists and neighbors, we had a healthy turnout of people looking to buy.
The mass media continues to run negative but vague stories about housing in general – I forgot that I was supposed to keep count, but here are a couple from today:
The media loves the ivory-tower schtick, but the real test is on the street. When we have 60-70 buyers trek up a remote hill in San Marcos hoping to find a decent buy, it’s a healthy sign.
We’ve had three offers each at the last two listings, and I’m going to guess we’ll have three here too. Does a large crowd and only three offers mean anything? It means there are a few dozen people looking in earnest to buy a house around this price range, in this area!
Don’t listen to the ivory-tower babble – the market is fine.
Regardless of inventory, rates, or tight credit, all that matters is price. Are there enough buyers willing and able to sustain these prices?
All we can say – and all we know – is, “Yes, so far.” Results may vary!
Kayla will be with me 12-3pm on Sunday – stop on by!