All that matters is what home buyers take away from stories like this. The gist here is the same as what we’ve been seeing – the unique, well-located properties are holding up, but in areas where there are several regular homes for sale, the first one out wins.
It’s essential for real estate agents to understand the current marketplace so they can get the best deal for their clients. And after years of watching the market favor sellers, many agents say they’ve seen a recent shift that has affected luxury property sales across the globe: We’ve entered a buyer’s market.
Jed Garfield, president of Leslie J. Garfield & Co., a New York–based brokerage that focuses on town houses, said he saw signs of this trend in late 2015, when properties that were listed at a fair market price didn’t sell. But recently, the impact has been dramatic. For example, a town house on East 70th Street between Park and Lexington avenues that was bought for $31 million in 2013, re-listed for $32.5 million a year and a half ago—and then dropped down to $22 million three months ago.
“The market is not what it was,” Garfield said. There’s an expectation that real estate prices will rise 3% to 5% each year, he added, but buyers won’t stand for that anymore. “You’d be very hard-pressed to find anybody who would pay more than 2015 prices today,” he added.
In Brooklyn, Compass agent Jay Heiselmann said he’s seen this shift play out as buyers looking for a $3 million-to-$5 million multifamily home have become pickier and more interested in negotiating than in years past. “People used to go and see everything that was on the market,” he said, but that’s no longer the case.
Dolly Lenz, of Manhattan-based Dolly Lenz Real Estate, said she has seen this shift affect the way agents are treated. As recently as a year ago, new agents who tried to get clients an appointment to see a top-tier new development in Midtown would be turned away, Lenz said. But now, not only is everyone getting appointments, they’re also being enticed to bring clients in with promises of extra commissions, “Hamilton” tickets, trips or cars if they make the sale.
“That is a sure sign of a very big shift to a buyer’s market,” she said.
In these cases, interested buyers should negotiate hard, according to Lenz. And that advice holds not just for luxury real estate in the New York market but also for those also in other U.S. cities like Miami and San Francisco, where there’s an excess of high-end, new and often similar inventory.
When it comes to the global market, Dubai has definitely converted to a buyer’s market, despite having “gorgeous architecture and beautiful properties,” because developers built too much too quickly, according to Lenz.
In the U.K. and Europe, the situation also largely benefits buyers, though the landscape is a bit more complicated. While buyers—specifically dollar-based buyers—automatically get a post-Brexit currency advantage in prime London, many still expect an additional 8% to 12% discount, said Gary Hersham, principal at London-based Beauchamp Estates. In this case, many sellers are opting to wait rather than make a deal.
“They think the pound is going to strengthen,” Hersham said. “They’re waiting for their values.”
Amid this shift, “there are still pockets everywhere that are holding firm,” Lenz said.
Manhattan’s West Village is an example—a mini-market where inventory is scarce and there aren’t many new developments or conversion projects, according to Lenz. This has kept competition stiff and prices high.
Prime Beverly Hills has also been immune to big price cuts, Lenz added, as have cities like Melbourne and Sydney in Australia, where Chinese purchasers have been known to buy up an entire building in a day.
“It all comes down to this being a supply-and-demand story,” Lenz said. “If you have a prime property in a great location—something that’s irreplaceable or a trophy property—it is still a very strong market.”
Home sellers – if you aren’t getting offers this week, you are missing out on what will be the closest thing we will see to frenzy conditions the rest of the year! Lower your price a little to get in the game!
California 30-year fixed mortgage rates go down to 3.22%
Saturday, July 30, 2016
The current average 30-year fixed mortgage rate in California decreased 1 basis point from 3.23% to 3.22%. State mortgage rates today ranged from the lowest rate of 3.20% (VT) to the highest rate of 3.34% (AK, NE). California mortgage rates today are 3 basis points lower than the national average rate of 3.25%.
The California mortgage interest rate on July 30, 2016 is down 11 basis points from last week’s average California rate of 3.33%.
The current average 15-year fixed mortgage rate in California remained stable at 2.54% and the current average 5/1 ARM rate is equal to 2.62%.
Great to see some national publicity shine on our area! Oceanside has benefited greatly from the recent boom, just by being cheaper than the rest of the coast. The last paragraph here might be a stretch though.
The San Diego metro area continues to be one of the hottest real estate markets in the U.S. This past May, pending sales for all properties in San Diego County increased 6.9% year over year, and the median sales price increased 5.6% to $475,000 in the same time frame, according to the Greater San Diego Association of Realtors.
But perhaps most impressive is the drastic decline in days on market until sale. In May 2015, all properties averaged 43 days on market, but this dropped 16.3% this past May to just 36 days on market. Single-family homes saw an average of 37 days on market, while condominiums and town homes averaged a meager 33 days. Unsurprisingly, these numbers are reflected in low inventory numbers, which declined 19.7% from May 2015 to this past May.
he North Coast region of San Diego County is one of the more desirable locations for home buyers along the coast, and this spring and summer the beachfront communities of Carlsbad and Oceanside have seen significant demand.
In the popular coastal 92008 ZIP code of Carlsbad, the median sales price for single-family homes increased an impressive 18.1% from May 2015 to this past May, reaching $915,000. The median sales price for town houses and condominiums, however, increased a whopping 54.7% in the same time frame, to $680,000. Inventory in the area is quite low, with just a 2.5-month supply for single-family homes and a meager two-month supply for townhouses and condominiums.
Going a bit further inland in Carlsbad can help buyers with the affordability issues that increasing prices are causing. In the 92010 ZIP code, prices are also increasing, but the median sales price there for a single-family home was just $735,000 this past May. Townhouses and condominiums in this area actually saw a decrease in median home price this past May, dropping 8.4% to $435,000.
Moving a little further up the coast to the Oceanside community makes for even larger gains in affordability, however. The market in Oceanside has been extremely strong, but it remains far more affordable than Carlsbad, and price gains have not been as drastic. This past May, the median sales price for a single-family home was just $557,500 in Oceanside’s coastal ZIP code of 92054. In central Oceanside’s 92058 area, single-family homes had a median sales price of $500,000 this past May, while townhouses and condominiums saw a median sales price of just $277,000.
Although the greater San Diego region remains one of the most popular real estate markets in the country, there are still communities that offer desirable coastal living with excellent schools, but at more affordable prices.
I have bought with friends before, and I’ll never do it again – you have to reach full agreement on everything!
And don’t do anything quickly! (bottom paragraph)
For some New Yorkers who have been priced out of New York City’s real estate game, pooling resources with friends and siblings has become the quickest path to homeownership. And while sharing a front door can put even the best relationships to the test, some are finding it’s worth the risk.
For Laurie Savage, a writer and restaurant server, and her husband, Garette Henson, a filmmaker, both 36, the arrival of their son, Fox Henson, almost 2, sparked the idea of buying real estate with a friend. That friend was Alix Frey, 37, whom they had met when they were all students at Sarah Lawrence College.
The group recently moved into a three-story two-family townhouse in Bedford-Stuyvesant, Brooklyn. Ms. Frey, the director of the Blum & Poe gallery in Manhattan, occupies the top level while the couple have the lower level, including the basement and the backyard. The parlor level is divided between the Savage/Hensons and Ms. Frey.
For assistance in their search for a place to buy, the three, who had rented apartments in the same brownstone in Fort Greene, Brooklyn, for eight years, turned to Marina T. Schindler, a saleswoman at Compass real estate and one of Ms. Frey’s close friends.
“It’s a really good way for people to work the system,” Ms. Schindler said. “Not everybody has that money for a down payment. They realize if they team up, they get more bang for the buck.”
It’s a complicated process, she added, “because they’ve got to have an agreement between each other, they have to trust each other, but it’s a great way for young families to make a bigger, better investment.”
The friends had originally looked at properties separately, almost immediately concluding that they were priced out of Fort Greene. As they expanded their searches to Crown Heights and Bedford-Stuyvesant, the numbers still seemed shocking. “Alix was looking at a one-bedroom for $750,000. She wanted a two-bedroom for less than that,” Ms. Savage said.
“We realized we can get a better space if we buy together,” she said. “The apartments priced at what we’re each getting our units for were like tiny boxes. It was startling, the difference in the quality of what we could get. So very quickly we said we’re open to it.”
Doesn’t it seem like there’s a new real estate app that’s going to slay the real estate industry every week or two? Will they spend millions to advertise? They need to make it lucrative for listing agents to bring their listings.
Garrett Camp, Uber cofounder and CEO of Expa Studios, is today unveiling Expa’s latest project, Haus.
Haus is the studio’s first real estate play and focuses entirely on the buying and selling of residential property, digitizing and organizing offers from buyers so that all parties (the buyer, seller, and agents) have more transparency and immediacy through the negotiation process.
There are plenty of startups out there that concentrate on discovery of properties, Camp said. But the issue that hasn’t really been touched by technology is that of making and accepting official offers.
Haus digitizes that entire experience, letting sellers put their listing on the platform, where buyers and their agents can both post their offers, amend them, and see an anonymized version of other offers that have been made on the property.
As it stands now, real estate brokers are shuttling offers to sellers’ agents via fax, email, or simply in-person. On the other side, sellers’ agents are trying to properly compile multiple offers in spreadsheets, in an email, or with pen and paper.
This might seem simple — write down all the best offers and pick the highest number, right? But there are a number of factors within a single offer beyond the actual overall price, including the financial security of the buyer, extra terms of the deal, amount of cash up-front, and more.
The real estate industry isn’t necessarily known for its transparency. While sellers’ agents are required to show them every offer on the table, buyers have little access to the actual movement on a particular listing.
Haus aims to clear up that opacity by showing each offer, with its unique nuances, to both the seller and the other interested buyers.
But this type of transparency is not without its potential downsides.
When a seller receives a few good offers on a home, the sellers agent will ask for best and last offer by noon tomorrow, for example. If buyers were able to see the terms of all the other offers, as they would when using Haus, then this could drive the price of the home up as buyers enter into a bidding war. Not to mention, unethical sellers or agents could artificially inflate the price of a home through shill bidding, as an offer is not legally binding.
While Haus helps sellers measure the demand on their property, it might also drive away potential buyers who don’t want to get in a bidding war over an already-expensive purchase. Or, on the other side, this might short a seller who would have received a much higher best and final bid from a buyer, but saw that offer drop to barely beat the next-best offer.
“We think the openness will create a more efficient market and that the number of offers and price will ultimately be dependent on demand,” said Haus GM Sarah Ham. “Bidding wars are a common, almost accepted, part of the real estate process today. But with our approach, buyers know where they stand. Buyers will know what they need to offer to make their offer competitive, but they also won’t negotiate against themselves.”
There may also be some concern over this replacing agents entirely, though Camp sees this as a complement to what brokers offer their clients, offering efficiency in the part of the process (compiling offers) that can be slow and time-consuming. Plus, most folks still need a broker’s expertise when it comes to marketing the home, finding a home, understanding the true value of a property, and of course, drafting up the paperwork.
While there may be some question over the transparency angle, Haus certainly offers way more efficiency when it comes to compiling and presenting offers to the buyer. Camp likens it to the town car industry of the past, which (as you might already know) was blown up by Camp’s previous startup, a little company called Uber.
“Collecting offers and presenting them is a very manual process, the way that town car companies would pick up a phone, write the fare on the board, and send the next available driver to that location,” said Camp. “It just seems much more efficient for agents to use a platform to coordinate all of this information automatically.”
Haus isn’t currently charging anything, but eventually they’ll pull from the broker fee once the company understands how it can generate extra business for realtors by saving them time during the negotiation process.
It is probably a great idea to streamline a uniform listing process.
But nowhere is it discussed how they will produce a public-facing real estate portal that will compete with Zillow Group for the consumer’s eyeballs.
I guess it sounds nifty that we can designate which portals get each listing, but that will only affect the Zillow Group if there is a wide-spread effort to deny them all of the listings. Otherwise, they will still have most of them, and sellers will wonder how come you aren’t putting their listing on Zillow.
Either the industry produces a website that captures the consumer’s fancy, and draws them away from the Zillow Group portals, or we don’t.
There isn’t much hope that this effort will lead to some super-duper website later, because that’s not the whole answer. If we are going to take back the full control of our listings and how the consumer enjoys them, then we need the super-duper website AND the $100 million per year advertising budget to keep up with Zillow.
The federal government revealed Wednesday that its investigation into foreign buyers using high-end U.S. real estate as a means to launder money found that potentially illicit activity is behind a “significant” portion of the cash transactions in Manhattan and Miami, and plans to expand the investigation into several other areas.
Earlier this year, the Treasury Department’s Financial Crimes Enforcement Network stated that it was “concerned about illicit money” being used to buy luxury real estate, and planned to begin identifying and tracking the previously unknown buyers who used shell companies to hide their identities.
At the time, FinCEN issued a “Geographic Targeting Order” that required title insurance companies in Manhattan and Miami-Dade County to identify the actual person behind shell companies used to pay all cash for high-end residential real estate in those two areas.
In a call with reporters on Wednesday, a FinCEN official stated that more than 25% of transactions covered in the initial inquiry involved a “beneficial owner” that is also subject of a “suspicious activity report,” which is an indication of possible criminal activity.
“In particular, a significant portion of covered transactions have indicated possible criminal activity associated with the individuals reported to be the beneficial owners behind shell company purchasers,” FinCEN said in an associated release.
FinCEN said that the findings of the initial investigation corroborate its concerns that all-cash transactions are “highly vulnerable to abuse for money laundering.”
According to FinCEN, it will soon require all U.S. title insurance companies to reveal the individual behind all-cash, high-end real estate transactions in the following areas:
All boroughs of New York City
Miami-Dade County and the two counties immediately north – Broward and Palm Beach
Los Angeles County, California
The three counties comprising part of the San Francisco area – San Francisco, San Mateo, and Santa Clara counties
San Diego County, California
Bexar County, Texas, which includes San Antonio
“By expanding the GTOs to other major cities, we will learn even more about the money laundering risks in the national real estate markets, helping us determine our future regulatory course,” El-Hindi said.
The monetary thresholds for each area are different, and reflective of the real estate market in the area.
In Manhattan, for instance, title insurance companies will be required to reveal the individual behind a cash transaction on all sales of $3 million and above, while in the San Antonio area, the threshold for reporting is $500,000.
Click the image below for a look at the dollar threshold for all of the metro areas that are a part of the expanded investigation.
On the call with reporters, a FinCEN official stated that there are various reasons why those six areas were selected, including: the prevalence of shell companies used in all cash transactions in each area; whether the luxury market in that metro area is attractive to foreign buyers; and information provided by law enforcement.
The lightweight reporters who nibble around the edges don’t ever get to the point. It doesn’t matter who wins the election, rich people are taking over. Millennials and others will have to find a way to buy a home, or be at the mercy of rich people for the rest of their lives.
Trevor Burbank is single, 27 years old, and has been house hunting in Nashville for the last year.
“My rent’s going up in August, so I have to figure out what I’m doing,” he says.
The last time Burbank looked for a place was five years ago. He decided to use his down payment to start a business instead.
“There was a house that I really liked that was going for $60,000, and I saw the house being sold in the past few months for just shy of $300,000,” Burbank says.
There’s a big debate in real estate over where home ownership rates are headed, and whether Millennials — people who came of age around 2000 — will get into the housing market the way generations before them did.
We must make sure that everyone has a fair shot at homeownership. We will keep the housing market robust and inclusive by supporting more first-time homebuyers and putting more Americans into the financial position to become sustainable homeowners; preserving the 30-year fixed rate mortgage; modernizing credit scoring; clarifying lending rules; expanding access to housing counseling; defending and strengthening the Fair Housing Act; and ensuring that regulators have the clear direction, resources, and authority to enforce those rules effectively.
We will prevent predatory lending by defending the Consumer Financial Protection Bureau (CFPB). These steps are especially important because over the next decade most new households will be formed by families in communities of color, which typically have less generational wealth and fewer resources to put towards a down payment.
All three of the housing planks are vague, and who really knows what any of the three would do once in office. But I think I nailed it on their photos!
We know there are millions of people thinking about downsizing, due to costs, maintenance, and their health. But the real estate market provides few quality turn-key solutions. It makes sense to encourage homeowners to add a granny flat! From the latimes.com:
To help ease California’s housing crisis, Gov. Jerry Brown and state lawmakers are turning to people’s backyards.
Multiple bills with the endorsement of Brown are moving through the Legislature to make it easier for homeowners to build small units on their properties, whether in their garages, as additions to existing homes or as new, freestanding structures.
“These bills enhance homeowners’ ability to provide needed housing,” Garcetti and Los Angeles City Councilman Gil Cedillo wrote in a letter supporting measures from Assemblyman Richard Bloom (D-Santa Monica) and Sen. Bob Wieckowski (D-Fremont).
Together, the Bloom and Wieckowski bills would force cities to permit the backyard homes — also known as “secondary units” or “granny flats” — eliminate cities’ ability to require additional parking spaces for units near transit, and limit fees charged to connect to local water and sewer systems.
Homeowners such as Rochelle D. Ventura could stand to benefit if the bills pass. The retiree, who once worked in city government, said she spent around $5,000 several years ago in an attempt to build a secondary unit in her Beverly Grove backyard.
But after the design was submitted to the city, Ventura said she was denied: The driveway that led to the backyard wasn’t wide enough, and a portion of it was covered.
“I couldn’t do it, and that is a shame,” said Ventura, 78. “I have a beautiful granddaughter who was going to live there.”
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