Comparing the number of active listings in each price category helps to demonstrate the extreme conditions at each end of the market. The low-end only has an occasional offering now, where the high-end has more choices than most buyers can comprehend:
NSDCC Number of Active Listings in Mid-April
| Price Category | |||
| 0-$800,000 | |||
| $800K – $1.4M | |||
| $1.4M – $2.4M | |||
| $2,400,000+ |
Click on the ‘Read More’ link below for the NSDCC active-inventory data:
Seen at Mish’s blog:
A Point Grey house with a stunning view has sold for more than $9 million — $1,172,000 over the property’s list price. The 1928 house on Bellevue Drive was offered for sale for $7.888 million.
Realtor Bo Park said the seller received 11 offers on the property after the first open house weekend. They were all cash offers with no subjects and most were for more than $8 million.
All but one of the offers were from Chinese buyers, she said.
“It was fast. I was surprised by the number of offers and the price it sold for,” said Park, a realtor with Sutton West Coast Realty.
“It was the view. It is spectacular.”
She said the house was an estate sale and the buyer plans to rent out the place then rebuild within a couple of years.
“The house needs a lot of work — at that price it makes sense to rebuild,” Park said.
Last week, a Kitsilano house on a standard city lot sold for $735,000 more the asking price.
“I’ve been doing this for close to 25 years and I’ve never seen anything like it,” Park said.
“There is not much product out there — that’s why things are so crazy. How long will this last? I have no idea.”
Here’s a quick tour of the new Davidson models at The Oaks Farms in SJC:
There has always been some sort of relationship between inventory and sales.
When inventory is tight, sellers have the advantage because buyers get frenzied up and just pay the price to win one.
With a smaller increase in inventory, the frenzy can soak up the supply – sales can increase too because more demand gets satisfied.
But there comes a point when a larger increase in the inventory causes the buyers to back off, and sales stall.
It is a delicate balance because buyers want more choices, but when it feels like not much is actually selling, buyers regain control of the market. They adopt the wait-and-see approach – even with homes that appear to be well-priced. They want someone else to go first!
Let’s examine the local data to see how we’re doing. There isn’t a direct relationship between new listings and sales in the same time period, because many if not most of the sales were listings from the previous quarter or quarters. But we can use the ratios to compare the velocities:
San Diego County Detached-Homes, 1st Quarter
| 1Q – Year | |||
| 2014 | |||
| 2015 | |||
| 2016 |
So far, so good. When we look at the whole county year-over-year, there has been a very similar relationship between new listings and sales in the first quarter. Let’s check around the northern coast:
North San Diego County Coastal Region, 1st Quarter
| 1Q – Year | |||
| 2014 | |||
| 2015 | |||
| 2016 |
We are getting a little queasy now – there were 8% more new listings to consider, and sales dropped off 13% but we know that 2015 was a strong year so tough to keep up.
Let’s break down the NSDCC stats by price to find the trouble:
North SD County Coastal Region, 1st Quarter, UNDER $1,400,000
| 1Q – Year | |||
| 2014 | |||
| 2015 | |||
| 2016 |
No big problems there – the Under-$1.4M sales declined, but so did the number of new listings so the ratio was about the same as the previous two years.
But that means the higher-end market isn’t enjoying the same benefits:
North SD County Coastal Region, 1st Quarter, OVER $1,400,000
| 1Q – Year | |||
| 2014 | |||
| 2015 | |||
| 2016 |
Yikes, the number of new listings over $1,400,000 zoomed 30% higher than last year, and sales dropped 18% – an example of how too many choices are causing buyers to pause (the identical 178 sales in 2014 and 2016 was a fluke).
The higher-end market could be stalling just because of the additional choices. If there were only 5% or 10% more listings (like last year), it probably wouldn’t be that noticeable – but the +30% is leaving a mark.
The extra listings may not even be ‘over-priced’ on paper (or by zestimate), but with so many active listings stacking up, the buyer’s confidence in the wait-and-see program is rewarded – and also causing their ‘picky-ness’ to increase rapidly.
There are 186 pendings listed over $1,400,000, so the market isn’t dead.
But last year at this time we had 564 active listings priced over $1,400,000, and today there are 695 listings – a 23% increase.
Having 30% more new listings overall this year but only 23% more active listings today means we were able to soak up some of the extra supply. But the rest are lingering.
How should these sellers proceed? Be sharper on price, and if you’re not getting offers in the first 2-3 weeks on the market, then do bigger price reductions faster.
You don’t want to look up in July and wonder what happened. You know now.
Get Good Help!
If I did this video, it would look identical – too quick, too close, and too homer:
Are you looking for an off-the-grid hideaway for less than a million?
San Diego ranked #5 in America for its 19% growth of $1,000,000+ sales last year, compared to 2014. However, the number of million-dollar sales and the median sales price both dropped in 1Q16, compared to 1Q15:
| 1Q – Year | ||
| 2014 | ||
| 2015 | ||
| 2016 |
It’s interesting that the median SP is around our $1,400,000 sweet spot!
A twitter guy wants a yes or no answer to whether it’s a good time to buy.
Good time to buy? @Bubbleinfo says YES https://t.co/zFMtxTyyTo; On opposing side, @thefredglick says NO! https://t.co/t5DSOGajA1 #RealEstate
— Bill Wendel (@RealEstateCafe) April 6, 2016
He claimed that I said Yes, because of my post about it being a great time to buy if you’re selling a cheaper home and buying a more-expensive home. It’s because the higher you go price-wise, the colder the market gets. Fred said it is a good time to buy as long as you don’t plan to move in the next five years.
It’s a question that deserves a full answer, not just yes or no.
The most common blog chatter is that history always repeats itself, and it will just be a matter of time before this cycle runs out.
The economic cycle will sputter again, but the housing market is different now.
Why?
Because distressed sales are well-managed.
The California Homeowner Bill of Rights mandates that loan modifications be dangled in front of anyone in trouble. The foreclosure process gets drawn out for months and years so we’ll never see a flood of trustee sales again.
As a result, making your mortgage payments has become optional.
If we have another economic downturn where homeowners can’t pay, then the government will insist that lenders give them a break. The cast was set in the last crisis – the government will create bailout programs that allow everyone to kick the can down the road.
With distressed sales few and far between, the vast majority of home sales will be elective. Sellers with the mantra – “I don’t have to sell, I’m in no hurry, and I’m not going to give it away!”
Prices will maintain a tight range of +/-5%, because the minute a seller thinks he is being forced to ‘give it away’, he will object. Different neighborhoods will have periods of stall-out, where few or no buyers will pay what sellers want, and real estate loitering will be common.
But days of drastic price dips are gone.
The other buffers to a housing downturn include reverse mortgages, rampant flipper business, and baby-boomer estate distributions.
If today’s buyers have assurances of pricing protection, is it a good time to buy? Well, yes, if that’s all that matters.
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
But for most, it is a terrible time to be a buyer, which is different.
If you are on the low-end of your market, you can forget about buying your “dream house”. The competition is fierce, and compromise required – if you can even get your hands on something.
My listing at 2022 Cherokee in Escondido – the one priced at $549,000? We had six offers, and four of them were all-cash. All were at list price or higher.
It was viewed 3,198 times on Zillow since Friday, and I received 100+ phone calls and texts from agents. I had over 200 people visit the open house on Sunday, and it was probably shown at least 50 times between Monday and Wednesday.
http://www.zillow.com/homes/2022-cherokee,-escondido_rb/
Almost all of the lookers didn’t offer, so they will be competing against each other on the next one – literally hundreds of buyers floating from new listing to new listing, hoping for a miracle.
Was it a giveaway? Agent comments included, “Price was fair and reasonable’, and ‘The defects were properly discounted’ (defects included no direct access from house to backyard, master suite downstairs and kids’ bedrooms up, and it backs to the I-15 freeway – the rear fence was the CalTrans chainlink).
Buyers have to endure bidding wars on anything decent, no rules about how to win, and shady realtor tricks that seem to favor insiders. Buyers are quick to jump to that conclusion, but it is more due to a realtor’s incompetence that bidding wars are vague and hard to win.
If you can get a house into escrow, it almost always happens that it’s condition is worse than imagined. But sellers are in the driver’s seat, and do little or nothing to assist. Buyers usually end up feeling like they are buying an over-priced turd.
But it will probably be your turd forever!
Buyer beware! He doesn’t have a website, and he’s not on Zillow:
A Yorba Linda man is suspected of stealing more than $500,000 in a real estate fraud scheme and police believe there may be other victims, authorities said.
Authorities arrested Andres Pacheco, 39, on Tuesday after making an appearance at an Orange County courthouse for an unrelated case, said Cpl. Anthony Bertagna of the Santa Ana Police Department.
Pacheco is charged with multiple felony counts for grand theft, non-sufficient funds with intent to defraud and enhancements for aggravated white-collar crime over $200,000 and $500,000.
Pacheco is a real estate broker and owner of Santa Ana-based Franklin Equity Corporation/Signature Escrow. On July 1, 2015, a victim told detectives he had been defrauded by Pacheco.
An investigation revealed that the company failed to return $186,000 in escrow it was holding pending the completion of a real estate transaction, Bertagna said. When the transaction was canceled, the money was never returned.
Authorities found eight more victims who gave Pacheco $540,000 in earnest deposits for short-sale transactions. That money was never returned either, Bertagna said.
Calls to the Franklin Equity Corporation were not returned.
He is being held in Orange County jail on $540,000 bail. His next court appearance in Wednesday.
http://www.ocregister.com/articles/pacheco-710942-real-estate.html
We lost another great one today – Merle Haggard, who died on his birthday.
Here’s a sample of him and Willie together, doing what they loved to do – don’t miss the story in the last 30 seconds that sums it all up!
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
