The last time I saw Rod Piazza was at Poinsettia Park in Carlsbad at a Friday Summer Concert Series show – he’s still playing SoCal too; on New Year’s Eve, the band will be in Arcadia: http://www.themightyflyers.com/schedule.htm
(starts at 1-min mark):
Holiday visitors to San Diego might take a liking to our fair city, and wonder about our real estate market. They may want to see a few homes for sale to sample the local fare.
A few thoughts for the unfamiliar:
1. The local inventory has been picked clean.
Market conditions here have been excellent, and buyers have snatched up anything that resembled a decent buy. All that is left are the OPTs (over-priced turkeys). Any home for sale that has been on the market more than 30 days is probably 10% too high in price, or more.
2. It probably won’t get much better.
We are due for a surge of inventory, but the prices on new listings will be influenced by the lagging OPTs. Experienced home shoppers have given up on getting a deal, and instead are looking for the premium properties – only.
3. New listings are likely to be rehashed.
We suffer from lax enforcement of the MLS rules here, and as a result, agents will ‘refresh’ (cancel and re-input) their listings – usually without changing the price. Frustrated buyers and their agents think it is a hot new listing, and pay all the money; when in reality it’s been sitting on the market for weeks or months. A few of these go pending each week – it works. Buyer beware.
4. Not many off-market deals.
Every time I check, the off-market deals only amount to 10% to 15% of all sales, which means you need to work with a good agent to snag one of the 85%. Normal home-sellers demand the open-market exposure in order to achieve top dollar, so the off-market sales are typically the estate sales being sold by out-of-town heirs who want fast money.
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School quality is a big driver of real estate demand. The following are different areas of the North San Diego County’s Coastal region, with the scores of the elementary schools from www.greatschools.org, which isn’t a perfect measure but it’s all we got:
Carmel Valley, 92130
The hot bed of local real estate action, due to the excellent schools and proximity to local employment centers. All nine elementary schools are scored a 10; Sage Canyon, Ocean Air, Torrey Hills, Carmel Creek, Carmel Del Mar, Ashley Falls, Sycamore Ridge, Solana Pacific, and Solana Highlands (Solana Ranch not scored yet). Decent houses start at $1,000,000.
La Jolla
All three public elementary schools in La Jolla are ranked a 10; Torrey Pines, Bird Rock, and La Jolla Elementary. If you can find a decent house under $2,000,000, grab it.
Del Mar
Del Mar Heights Elementary scores a 10, and Del Mar Hills is a nine. Expect to spend $1,500,000 for a decent house in the 92014.
Solana Beach
All schools score a 9 in Solana Beach proper, where you can buy a decent home in the low-$1,000,000s.
Rancho Santa Fe/Fairbanks Ranch
Those living in the RSF Covenant area can enjoy K-8 at the R. Roger Rowe School, and those around Fairbanks go to Solana Santa Fe – both schools score a 10. Expect to spend at least $2,000,000 for something decent.
Encinitas/Cardiff
Three elementary schools rank a 10; Cardiff, Flora Vista, and Olivenhain Pioneer Elementary. You can find decent houses in the $800,000s – only 48% of the homes sold this year closed over $1,000,000.
Carlsbad
Carlsbad is the most populous town in the coastal region, and the furthest north, which plays a role for those who need to fight traffic daily going south. There are five schools that score a 10, and all are in South Carlsbad; Pacific Rim, Aviara Oaks, Mission Estancia, El Camino Creek, and La Costa Heights. You can still find a decent buy in the $700,000s, and 80% of houses sold this year closed under $1,000,000. Carlsbad is split into three different school districts, which means getting to high school might be a trek.
All the high schools from La Jolla to Carlsbad rank 8s and 9s.
Yes, you can find houses for sale for less than mentioned here, but you really need a good agent – and I can help! jim@jimklinge.com
An incredible display of human ingenuity – hat tip to TG!
If these home-auction companies spent $100 million per year on advertising, they could go mainstream – and pressure realtors to justify their existence. Thankfully, sellers resist anything that sounds like they might give it away:
According to comScore, online sales so far this holiday season (November 1 – present) have risen over 16% against last year’s figures from the same time. Housing prices are also accelerating month-over-month and are predicted to reach pre-recession prices by mid-2015 (cnbc.com). With the average online purchase sitting at $180.94 (as of this year’s second quarter), selling real estate online seems like an unlikely scenario.
However, heavyweights in the online real estate auction space such as auction.com and homesearch.com are thinking otherwise. Both companies use an online auction model to sell homes to investors and would-be investors online; however, during this holiday season, both seem to be testing ways to give online home buying more mass market appeal.
Are we witnessing the marriage of e-retailing to real estate?
One example suggests the answer to this is yes. Homesearch recently brought on a new CEO, Kal Raman whose background as an eBay/Groupon executive may foreshadow where the industry’s headed. Earlier this month, Homesearch joined the Cyber Monday craze by launching what seemed to be the industry’s first Cyber Monday sale packed with discounts and buyer incentives on homes. These properties were auctioned online through Homesearch’s typical online auction process.
Their most recent promotion though consists of a “buy it now” price, similar to that of eBay, so instead of actually bidding for a home through an online auction, consumers will call Homesearch to receive a price via telephone. If a consumer likes the price and the extra incentives offered, they can purchase the property before it goes to auction (Homesearch handles much of the downstream closing process already). As eBay’s strategy made clear, there are masses of people who are uncomfortable joining an online auction but who react very well to bargain-basement fixed prices.
Given that Homesearch continues to grow their network of real estate agents and broker partners, is it a stretch to imagine the day when an agent shows homes in the neighborhood and then takes their client online to purchase?
In a space where nothing like this has been tested before it’s hard to know for certain how successful Homesearch and others will be trying to scale mass-market retailing strategies to real estate. However, if they’re really able to go the retail merchandising route and apply discounts of 20%-50% off the list price of homes for sale, I can see how people might be inspired to buy their next home online.
For those who didn’t see it the first time around in 2011:
Lots of poking around, but no mention of sellers asking too much:
http://dqnewspressreleases.blogspot.com/2014/12/november-southland-home-sales-press.html
“Southern California home sales are closing on a low note in 2014,” said Andrew LePage, data analyst for CoreLogic DataQuick. “Inventory still lags demand in many markets and traditional buyers haven’t filled the void left by the investors who’ve pulled out. Among would-be buyers, affordability and mortgage availability remain as hurdles, as do concerns about job security and the direction of the housing market.
But there are reasons to expect more housing demand ahead. According to recent data from the federal government, job and income growth has improved. Many people who became renters after a foreclosure or short sale over the past seven years will want to buy again. And potential home buyers sitting on the fence might be tempted to jump off if they see evidence that mortgage rates will spike from today’s exceptionally low levels.”
There’s been a lot of hullabaloo about the Fannie/Freddie decision to drop the minimum down payment from 5% to 3%.
But the 2% difference will have virtually nothing to do with the decision to default. If a homeowner is going to walk from a 3% down payment; they will walk from a 5% down payment too.
Shiller speaks in his usual ‘casual indifference’ here, but they didn’t cut his last point in the video – that historically the ‘slowing of appreciation has sometimes been the precursor to declines’:
According to recent data from the National Association of Realtors, first-time homebuyers account for just 33 percent of all home purchases. That’s the lowest level in 27 years.
“Maybe there’s a cultural change. Our millennials spend more time on Facebook than standing over the backyard fence and talking to the neighbor,” Shiller said, attempting to explain the drop in new homebuyers.
“Maybe neighborhoods are not as important. Or maybe there’s an urbanization trend going on.”
The current inventory is 7% higher than it was last year at this time, but with mortgage rates under 4% for the first time in a year-and-a-half, the market should get off to a quick start in 2015.
The UNDER-$800,000 Market:
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Why stop at 3.25%? Let’s just lower mortgage rates to 2.5%!
An excerpt:
An examination of break-even inflation rates suggests sharply lower oil prices are a key driver of the 90 basis points rally in 10-year Treasurys and the 60 basis points drop in mortgage rates in 2014, according to analysts at BofA Merrill Lynch.
Most real estate economists are forecasting mortgage rates will rise in 2015, but the recent steep drop in oil prices could change all that.
“The possibility of further declines in oil prices increases the chances that mortgage rates drop to the 3.25%-3.5% range that we believe is necessary to get housing back to affordable levels for many,” says Chris Flannigan, ABS and MBS strategist at BAML. “We have maintained the view that 4% mortgage rates are too high to allow for sustainable recovery in housing. In our view, a drop to the 3.25%-3.5% mortgage rate range would eliminate the current benign technical conditions prevailing in the agency MBS market, increasing supply from both refinancing and purchase mortgage channels. Such a rate drop would also create significant upside risk to our forecast of roughly $1 trillion of mortgage production in 2015.”
Flannigan says that if sustained low rates were realized, which could be possible if sustained low oil prices are realized, the market could see realized mortgage production, which was pegged at a 2.3% 10yr, exceed the forecast by 30%-50%.
The politicians, talking heads, and NAR pitchmen think that tight credit is to blame for a lackluster housing recovery, but those of us on the street know the local market has been red hot with demand. The strict underwriting is more of an annoyance that anything, with underwriters requesting every document they can imagine in order to minimize the threat of buybacks.
Has it loosened up? Will low rates and looser credit spearhead another big year in 2015? I think so.
Here is an excerpt from this article to demonstrate the loosening:
http://www.mortgagenewsdaily.com/channels/pipelinepress/12122014-super-liens-respa-tila.aspx
Let’s see what some random companies, small and big, have been up to lately to gauge lending trends.
Banc Home Loans has expanded its Jumbo guidelines. Its “Program 55” highlights include up to 85% LTV no MI (to $2M), Loan amounts to $5 million, Minimum 660 FICO to $1.5M, 1st time home buyer- loan amounts to $2M, and Primary Residence: Cash Out Refinance now to 75% LTV (Cash-out up to $1 million).
Caliber’s enhanced Fresh Start Program was rolled out. The two biggest features are bank statement option for self-employed borrowers, and no seasoning or mortgage payment history required for Short Sale, DIL, Foreclosure or Bankruptcy.
BluePoint Mortgage has Jumbo IO products with 89% LTV up to $1,500,000 with NO MI Loans up to $3,000,000 and 80% IO to $2,000,000, Up to $500,000 Cash Out, Second Home and NOO options, Cash out for second homes and NOO.
Carrington Mortgage Services, LLC announced the national availability of “The Carrington Loan,” offering borrowers a more transparent, simplified home loan process with no closing costs or upfront financing fees. The Carrington Loan can facilitate home purchases for borrowers in the sub-640 FICO score range.
Wells Fargo Funding improved its refinance adjusters for all non-conforming products as of November 10th, adjuster improvements are listed on the daily rate sheets. In addition, its minimum down payment requirement has been removed from its conventional conforming loans.
Stearns Wholesale is now offering new FHA FICO options 600-619 FICO score program.
Next year should bring in more demand from those who have been shut out previously from getting a mortgage, and those types aren’t known for patient decision-making. It might feel more like 2006 all over again?
Are you looking for an experienced agent to help you buy or sell a home?
Contact Jim the Realtor!
CA DRE #01527365, CA DRE #00873197
