The hot streak has finally been broken – only 46 new pendings this week, after averaging 67 per week over the last 12 weeks!
Thus, as buyers take their foot off the gas, we begin a 4-month slogfest where only the motivated sellers will surrender to what the market will bear. They will still sell for record pricing, if their ego will only let go of that last 2% to 4%!
I saw one this weekend where the seller had an offer that would net him about $500,000 over what he paid, but it wasn’t enough – he wanted another $25,000!
Here is how we compare to previous years:
Click on the ‘Read More’ link below for the NSDCC active-inventory data:
Buyers looking for any reason not to buy will enjoy this news:
Mortgage Rates were modestly higher on Friday, despite a weaker-than-expected Employment Situation (aka NFP, nonfarm payrolls, or simply “the jobs report”).
NFP is the most important number on any given month in terms of market-moving economic data. When NFP is lower than expected, rates tend to move lower. Even though today’s NFP didn’t fall too terribly short of forecasts, rates nonetheless made a counterintuitive move higher, confirming the generally pessimistic attitude in the bond market at the moment.
The modest increase in rates means we continue to operate at the highest levels in more than 3 months. Most lenders than had been quoting 3.375% on conventional 30yr fixed scenarios are now up to 3.5%. Many have moved up from 3.5 to 3.625%.
While there are some early signs that a ceiling could be forming, it doesn’t make much sense to float in this environment. That will continue to be the case until we see either a big push back toward lower rates, or an extended period (5-10 days at least) of stability at current levels.
Granite-slab yards we considered – all around Miramar Rd. All are good:
Amazon Stones
Rainbow
Picasso
Arizona Tile
Tosca
We were looking for max efficiency, and after I previewed all five, we hit four yards in two trips – which for the homeowners turned into a brief 2.5-hour investment on how to spend smart money to sell your house for top dollar.
Solar power is a great idea, but do you buy or lease the system?
If you purchase your solar panels, then when you go to sell the house, it should provide some extra value to the buyer. Exactly how much is tough to estimate, but it wouldn’t be more than 50 cents on the dollar – it is a feel-good feature.
If you lease your system, there are pitfalls when selling:
The buyers have to assume the lease. I don’t think the actual assuming of the lease is that big of a deal. Buyers already have their financials handy to get their loan, and mortgage underwriters are tougher than solar-lease underwriters. It is the additional hassle that can irk a buyer.
The seller and listing agent have to initiate the lease-assumption process. The solar-lease company won’t talk to the buyers until the lease application has been submitted, which means the seller and listing agent need to request it. The leasing company has 10 days to respond, but the listing agent expects the buyer to release all contingencies within 17 days – which is only going to happen if the listing agent knows to request the lease application promptly.
There is a buyout. This is where the fun begins. On one hand, the buyer gets the benefit so the seller expects you to take the full package as-is. But the lease goes for 20 years, and the lease payments total around $34,000. Plus, there is a buyout on top of that? Buyers don’t expect that additional buyout cost, and would like some negotiation.
Here is a typical buyout schedule:
4. The solar-lease company records a UCC-filing against the property, which prevents the seller from selling or refinancing without permission from the solar-lease company.
Do sellers fully understand what they are signing when they lease solar panels? Probably not, and if they try to sell their house over the next 20 years, they will get a not-so-friendly reminder.
Below is a link to a general discussion about solar panels:
If you click through to the YouTube version, you’ll see other school-bus home documentaries. The difference is that Zillow brings the glossy high-production to the film-making, and adds another unique clip to their diverse video library:
We can expect a hot year for home sales in 2017, according to recent forecasts from the National Association of REALTORS®, the Mortgage Bankers’ Association, Freddie Mac and Fannie Mae, and more.
NAR is predicting existing-home sales to reach 6 million in 2017, higher than its 5.8 million forecast for this year. But other entities are even more bullish. MBA is predicting home sales to eclipse 6.5 million next year, while Fannie Mae and Freddie Mac are both predicting 6.2 million.
A huge wave of Generation Yers, who have delayed home buying, are emerging into their key buying years. They are predicted to keep home sales and condo sales strong well into 2020, according to economists.
The top markets for price appreciation likely will be in Seattle, Wash.; Portland, Ore.; Denver, Colo.; and Boston, predicts Eric Fox, vice president of statistical and economic modeling at VeroForecast. These markets’ robust economies have growing populations but a tight supply of homes for sale on the market that will likely lead to some of the largest price increases across the country.
Meanwhile, new-home construction starts likely will tick up to about 1.5 million per year to 2024, predicts Forisk Research.
Home builders likely will continue to be more subdued, despite calls for more inventory.
“Home builders behavior likely is a continuing echo of their experience during the crash,” Pantheon Macro Chief Economist Ian Shepherdson told MarketWatch. “No one wants to be caught with excess inventory during a sudden downshift in demand. In this cycle, the pursuit of market share and volumes is less important than profitability and balance sheet resistance.”
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
Nothing but blue sky ahead, according to the big kahunas of real estate sales. In spite of tight credit and affordability issues, they all believe that we will sell over 6 million homes in 2017? How often has that happened? Only during the rah-rah days of exotic financing in 2005-2006:
The highest reading this year was 5.57 million, and today’s current pace is around 5.33 million sales, and stumbling. And they think Generation Yers will save the day, and cause home sales to rise at least 10% next year?
Note how wrong they were with their 2016 forecasts in top chart!
Let’s review the ways you can plug in! The bubbleinfo mobile app is available at the Apple Store and Google Play Store. The mobile app uploads blog posts from the category ‘Jim’s Take on the Market’, which is why you sometimes see posts in that category even though it’s not my opinion.
You can also find bubbleinfo at the various social media outlets. Every blog post uploads to the bubbleinfo.com facebook page:
Carlsbad has the best oceanfront heights – high enough to keep out the riff-raff, yet the beach is very accessible. The staircase seen here (circled in blue) is public access that the city required to split the rest of this parcel into three lots (in red):
