Now that they are relying on advertising income from realtors, the CEO is sucking up to agents regularly now. On his website, he titled this video presentation “Why Real Estate Agents Are Important Now and Forever“.
While his reasoning sounds accurate, it sorta feels like a sales job – but at least somebody is standing up to the microphone to defend agents. Hopefully he will lead the revolution against NAR, and tell agents to quit paying dues and spend the money with him:
Last week we saw that San Diego was #1 in the nation for least affordable housing compared to the renter’s median income.
This article ranks the Top 10 cities in America by median list price, with the highest eight cities all located in California (San Diego is #7):
The data is from realtor.com, which not only tracks the median list prices, but they also log the inventory counts for each city. The MLS coverage may not match up exactly to the metro areas, but let’s compare inventory-to-census populations to gauge the potential competitiveness:
|New York City
Seattle and Denver don’t get mentioned on the highest-priced lists, but the difficulty of buying a home there is duly noted. The actual San Diego residential inventory today is 6,709, or a 473:1 ratio, which would push us up into the same group, and we’d have the highest median LP of those five areas.
Interestingly, the Orange County inventory is 64% higher now than it was a year ago, while the San Diego inventory is only 15% higher Y-O-Y.
Tax day, Easter, and spring breaks are complete (or wrapping up), but no sign of a surge in new listings.
People don’t want to move, and it’s not just San Diego!
North SD County’s Coastal Region (La Jolla-to-Carlsbad)
The UNDER-$800,000 Market:
||NSDCC Active Listings
The $800,000 – $1,400,000 Market:
||NSDCC Active Listings
A couple of drone leftovers, a rant on price vs. conditions, plus two music videos from last weekend:
HT – Daytrip, Happy Easter to you and your family! A story about buy-and-hold, which is highly recommended (buy as many houses as you have kids, in case prices get way out of hand).
Buyers who bought at the bottom of the market in 2009 got a bargain. Then came years of opportunity to refinance into record-low interest rates. That means many owners can rent out their home for more than it costs them each month, even with taxes and other ownership costs figured in.
With the tenant covering the note, they can build equity — especially if home prices continue to rise.
“It’s a market-based decision,” Henson said. “They know they can get really high rents right now. If I’m locked in on a 30-year fixed [mortgage] at 4%, and if home values are going up, it can make a lot of sense.”
It did for Brian Darcy. The 36-year-old and his wife recently moved to North Carolina to be closer to her family. Instead of listing their three-bedroom in Manhattan Beach for sale, they signed with First Light and put it up for rent. Within a week they had a tenant and a lease that paid more than enough to cover the mortgage, Darcy said.
“The confluence of events kind of blew my mind,” he said.
Darcy and his wife bought the house in 2010 and always planned to move to something bigger. With two growing children and regular visits from relatives, it was getting to be that time. But the houses they were eyeing in Manhattan Beach were going up in price just as fast as theirs was.
They had enough savings for a down payment in North Carolina, and he could work from there as easily as in California. So off they went. They’re looking for houses now and finding that their money will go a lot farther in their new home.
The timing, Darcy said, couldn’t have been better. He estimates that his house in Manhattan Beach is worth one-third more than he paid for it four years ago, and he refinanced into lower interest rates. Now rents are rising.
“We bought at a good time,” Darcy said. “That’s what makes the mechanics work.”
Many of the new landlords are affluent and financially savvy, Haberle said. They’re not necessarily in it for the long haul, but they see a chance to profit right now.
“These amateur landlords aren’t people who are doing this for a living,” she said. “They just kind of happened into this opportunity.”
If this trend holds, it could mean even fewer homes for sale in an already tight market.
Read full story here:
The seagull view over Moonlight Beach:
Of the top 25 metro areas in America, San Diego is the least affordable, according to this report from Zach Fox at SNL (and formerly of the North County Times):
Housing prices have enjoyed substantial, double-digit growth over the past year, leading to affordability issues in some major metro markets that could cap prospects for future growth.
From a renter’s perspective, San Diego might be even less affordable than San Francisco, which famously boasts the nation’s most expensive real estate.
Prices in San Diego shot up 19.4% year over year in January, according to the latest data available from the S&P/Case-Shiller home price indexes. With prices so high, real estate agents said first-time homebuyers need to adjust their expectations.
Young renters can only make the leap to homeownership in San Diego with help from a government down-payment assistance program or their families, said Leslie Kilpatrick, president of the Greater San Diego Association of Realtors.
“I think we’re seeing more and more of that,” Kilpatrick told SNL. “This generation of parents is realizing the difficulties their children are facing in buying a home.”
A recent study by HSH, a provider of mortgage interest rate data, details how much income a household needs to afford the typical home in a given market. HSH calculated the minimum income needed to purchase a median-priced home in a given market. The study assumed a 28% front-end debt-to-income ratio and a 20% down payment and only covered principal and interest.
The results of this study raise an interesting question: How many renters in each market could afford to buy the typical home?
While it may not be possible to come up with a definitive answer, SNL explored the question using the HSH study, recently released U.S. Census Bureau data detailing renter incomes and corresponding Census data on housing units.
By one measure, San Diego had the lowest ratio of income-eligible renters — meaning they earned enough to buy a median-priced home — to housing units among 25 major metropolitan areas.
In San Diego, real estate agents think the market might be stabilizing, but prices are so high that first-time buyers are struggling to find entry. But that does not necessarily mean the market is in a bubble again.
Rich Toscano, a financial adviser with Pacific Capital Associates in San Diego, launched a blog in 2004 presciently predicting a housing crash based on overvaluation. He maintains a graph that compares home prices to a blended value of rent and per capita income. The index is now at the peaks seen in 1979 and 1990, but it is still well-below the most recent bubble.
“People say to me, ‘Are you worried about it?’ And I think, ‘It’s expensive, but it’s always been that way,'” Toscano told SNL. At the same time, he does not think there is much more room for prices to sustainably rise.
“I wouldn’t say there couldn’t be more upside, but what I would say is that whatever upside there is, I would expect to be given back eventually, at least in relative terms,” he said.
Real estate agents in the San Diego metro area seem to agree with Toscano that prices are starting to stabilize and that the days of double-digit annual growth have likely passed. Still, for buyers interested in the lower end of the market where homes are more affordable, bidding wars remain fairly common.
“Most people miss a few before they understand that when they see something they like, they have to act boldly and put in a strong offer,” said Kilpatrick, president of the local association.
Jim Klinge, a real estate broker in the metro area, similarly told SNL via email that the most recent low-end buyers he represented lost several bidding wars before nabbing a home. On Klinge’s blog, which gained national fame during the housing crisis for its candor and brash style, the agent reports hyper-local statistics on supply and demand. For now, the fundamentals suggest San Diego’s housing market is strong.
“What really matters is wondering if/when we will run out of rich people,” Klinge wrote.
Those who live near the new Sage Creek High School in north Carlsbad will have another large new-home tract beginning shortly. The West Village of Robertson Ranch was recently acquired by Toll Brothers, and they expect to be selling new homes there in 2015.
Shapell Homes purchased the acreage for $30+ million in 2010 from the Robertson family. At the time, they said they would build:
Single-family homes ranging from 1,800 to 4,000 square feet and townhomes from about 1,400 to 1,800 square feet. A senior housing project, probably for rent, also is expected.
If you are thinking of selling a home that is close to Tamarack/Cannon and El Camino Real, you may want to consider selling this year when there is less competiton!
Here is a tour of the area:
“The relatively high percentage of foreclosures with equity is surprising to many because it would seem homeowners with equity could easily avoid foreclosure by leveraging that equity by refinancing or with an equity sale of the home,” Blomquist noted.
No surprise here.
With no pressure from anyone to foreclose on non-payers, mortgage servicers can be picky about who gets foreclosed. It makes sense to foreclose where you can make a profit, and let the still-underwater folks ride the gravy train for another year or two.
Deadbeats don’t need to panic, it’s still quiet around SD County:
I like this reporting – instead of speculating with the usual mumbo-jumbo about why sales are slower, Madeline states a fact:
While the price of a California home rose to a level not seen in six years, it didn’t drive buyers out of the market. In March, the median price for a home rose to $366,000, which was up $16,000 from February and marks the highest price since March 2008. Despite the high price tag, home and condominium sales were up nearly 21% for the month.
March’s sales may have been up from February’s figures, but they were still down 13.3% from March 2013.
“Despite the nice jump in March home sales, sales continue to be slower than we’ve seen since 2008,” said Madeline Schnapp, director of economic research for PropertyRadar. “The supply of lower-priced distressed properties is disappearing at a rapid clip and is not being replaced by an adequate supply of non-distressed properties.”
The number of homes for sale on the lower end has dropped considerably, and where the low-inventory has the most dramatic impact – higher up hasn’t had the same problem. Here are the number of NSDCC homes listed for sale under $600,000 in the first quarter of the year:
||#Listings Under $600K
||#Listings Over $600K
There just aren’t as many lower-priced homes for sale.