More on July Sales

by | Aug 15, 2014 | Jim's Take on the Market, Market Conditions, Sales and Price Check | 2 comments

San Diego

Hat tip to Dennis for the cnbc.com report on July home sales in San Diego:

http://www.cnbc.com/id/101919762

Their report references the DQ report from Wednesday:

2014 July sales

Downer Diana noted that last month’s total was a three-year low, but didn’t mention that the frenzy started in the second half of 2012. As long as we are comparing to frenzy months, the 2014 totals will be lower – no frenzy now.

Let’s consider how last month’s sales of San Diego detached homes compare to previous years:

Year
# of SD Detached-Home Sales in July
2000
1,958
2001
2,291
2002
2,364
2003
2,871
2004
2,603
2005
2,338
2006
1,644
2007
1,470
2008
1,979
2009
2,170
2010
1,777
2011
1,900
2012
2,211
2013
2,402
2014
1,905

The July, 2014 sales look pretty good, given how high prices are now, and how fast they rose. Higher mortgage rates helped to cool off the frenzy too.

As a community, we should prefer a non-frenzy environment.

But the media insists that something is wrong. Diana said, “California is often seen as a barometer for the rest of the nation’s housing market. If that is the case, then housing this fall is not looking good.”

It looks good to me!

We know that when sales start declining, prices usually follow. But Rob Dawg noted this benefit here – payments are still cheaper than before:

The typical monthly mortgage payment Southland buyers committed themselves to paying last month was $1,602, down from a revised $1,616 the month before and up from $1,537 a year earlier.

Adjusted for inflation, last month’s typical payment was 34.4 percent below the typical payment in the spring of 1989, the peak of the prior real estate cycle. It was 46.3 percent below the current cycle’s peak in July 2007.

http://www.dqnews.com/Articles/2014/News/California/Southern-CA/RRSCA140813.aspx

In some areas we will probably see a few homes sell for less – neighborhoods where long-time owners have loads of equity and can still make out nicely at 5% to 10% under comps. But with so little pressure, it’s more likely that sellers will cancel and wait until next year, rather than dump on price.

Sales will probably keep dropping with the only folks selling are those who deserve a premium price – the turnkey homes in good locations – which in turn will slow any price declines.

Gen-X Leaving San Diego?

by | Aug 14, 2014 | Jim's Take on the Market, Market Conditions | 14 comments

genx

Hat tip to W.C. Varones for sending in this article about Gen-Xers leaving San Diego because housing is too expensive – and taking their kids with them:

http://m.utsandiego.com/news/2014/aug/13/report-gen-x-leaving-san-diego-taking-their-kids/

From 2008 to 2013, a period that frames the Great Recession and its slow-growth economic aftermath, the overall population of San Diego County grew by 3.9 percent to 3.17 million people, according to Cunningham’s analysis of census data compiled by the California Department of Finance.

However, the population actually fell by 4.6 percent over the five years in Generation X, the demographic cohort from ages 35 to 49. And Millennials, the cohort from birth to 19 (and the largest group), fell by 1.9 percent, indicating enough Gen X families left town to offset births and immigration of young people.

W.C. asked me what my experience has been with Gen X families leaving town. I’m not your typical realtor, but I haven’t had many Gen-X families move out of the county lately – just 2 out of 66.

Here are the seller categories of my 66 non-REO listings since 2010:

Investors/landlords: 24

Move Up or Down (within SD County): 21

Estate Sales: 11

Job Relo Out of SD: 6*

Divorce: 2

Retired, left SD: 2

* Of the six who left town, two were Gen-Xers

I think analysts and reporters jump to conclusions, and for the data to move a couple of percentage points in either direction shouldn’t be a cause for alarm. They included this at the end:

Meanwhile, Baby Boomers and retirees arrived in relative droves, with both groups rising in population by more than 15 percent.

Real estate is for affluent people now, regardless of age.

http://www.nusinstitute.org/press/releases/San-Diego’s-vanishing-Generation-X.html

The Who

by | Aug 13, 2014 | Wednesday Rock Blogging | 1 comment

I saw The Who at the L.A. Sports Arena in 1980 (with Kenney Jones), and my ears rang for at least a week! In 1976 they had set the Guinness Book of World Records for loudest concert ever, measured at 120 decibels from 50 meters away!

http://www.timeout.com/london/music/the-who-break-noise-records-at-the-valley-it-happened-here

They just announced last week that they will be touring in 2015 as part of their 50th anniversary!

http://thewho.com/blog/story/whos-got-the-who/

http://www.rollingstone.com/music/news/the-who-reveal-first-dates-of-50th-anniversary-tour-20140630

Here’s one of their best shows, from 1970 when Keith Moon was in fine form:

The 1970 Isle of Wight Festival was held between 26 and 31 August 1970 at East Afton Farm an area on the western side of the Isle of Wight. It was the last of three consecutive music festivals to take place on the island between 1968 and 1970 and widely acknowledged as the largest musical event of its time, greater than the attendance of Woodstock.  Although estimates vary, the Guinness Book of Records estimated 600,000, possibly 700,000 people attended. It was organised and promoted by local brothers, Ronnie, Ray and Bill Foulk. Ron Smith was site manager and Rikki Farr acted as compere.

(more…)

Napa Estate

by | Aug 13, 2014 | Bubbleinfo TV, Interesting Houses

This is a tour of the Robin Williams’ $30 million Napa estate.  The video is quality – a clean presentation of the stuff you want to see, and the drone work is fantastic. It’s only 1:53-min. long.

There is a 15-sec. commercial, which I try to avoid. But the rest is worth it!

Buy Now & Be Happy 2

by | Aug 13, 2014 | Bubbleinfo TV, Market Conditions, North County Coastal

There has been three categories of listings lately:

1. New listings that sell at or around list price the first week on the market.

2. Those that sell months later as price reductions finally intersect a rising market. In a slowing market (like we have now) pricing loses momentum quickly as buyers get more confident.

3. Those that don’t sell.

It’s going to get more obvious to sellers as showings slow to a crawl or less – if they want to sell this year, they need to lower their price. But hey, great news – those who are willing to sell for a price at the comps – or slightly under – should find takers.

Buy Now & Be Happy

by | Aug 13, 2014 | Inventory, Jim's Take on the Market, North County Coastal | 8 comments

Mish suggested yesterday that the real estate market will end up the same as last time for many folks who are feeling pressured to buy now or be priced out forever.  He is probably right that there are buyers who don’t investigate enough and end up making bad decisions – get good help!

He was commenting on this Bloomberg article that cobbled together a bunch of unrelated quotes, and topped it off with the sexy headline:

http://www.bloomberg.com/news/2014-08-12/first-time-buyers-shut-out-of-expanding-u-s-home-supply.html

Locally the inventory has seen a dramatic change – here are the number of NSDCC houses listed under $900,000 in the first seven months of the year:

Year
# of New Listings Under $900K Jan-Jul
2010
4,186
2011
4,042
2012
3,245
2013
2,760
2014
1,011

It has definitely been tough on the lower-end buyers, with prices rising rapidly over the last two years.  But buyers would be crazy to compromise on location – buy a smaller house or fixer instead, or just wait and see what happens.

Potential buyers who haven’t bought by now are exhausted. As soon as school starts, and the Chargers begin their Super Bowl run, buyers will have plenty of distractions, and demand will be visibly reduced.  There will be sellers who need to sell that will be disguised as over-priced turkeys too – make offers!

Reader elbarcosr left this comment:

And I am not sure anyone is yelling the buy now or be priced out forever bs anymore.  I *think* the prevailing wisdom is that with the gains over the last 24 months or so, prices are back to where they should be more or less, and given all the other factors, huge gains or dips are not really in the cards.  So if you want to buy a house to live in, go for it.  Speculating on big short-term price appreciation at this point is folly — as is waiting for a big dip in prices.  Put 20% down, grab your 4% 30 year fixed loan, and be happy.

Robin Williams, R.I.P.

by | Aug 12, 2014 | Walkaways | 1 comment

The media has been playing first 1-2 minutes of Good Morning, Vietnam, but that’s not enough.  You really need the eight-minute version to appreciate his full talent in this movie. He seemed like a great guy too:

Future New Homes in CV

by | Aug 11, 2014 | Carmel Valley, The Future | 2 comments

We know that Pardee has been around the Carmel Valley area since the beginning, back when it was called North City West.  They bought up almost the entire zip code, and still have a ways to go before selling out.

Circled below is roughly 320 acres that they’ve owned since 1979.  No sales price was given, but the tax-assessed value for the different parcels – all zoned residential – runs $20,000 to $50,000 per acre.

There will be plenty of roads, parks, and open space – but they should be building a few hundred more homes too!

pard acerage1

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