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CA Realtor Survey – October

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  • The share of homes selling above asking price edged up from 27 percent a year ago to 28 percent in October. Conversely, the share of properties selling below asking price dropped to 44 percent from 47 percent in October 2015. The remaining 28 percent sold at asking price, up from 25 percent in October 2015.
  • For homes that sold above asking price, the premium paid over asking price rose to 9.1 percent, up from 7.7 percent in September and 8.9 percent a year ago.
  • The 44 percent of homes that sold below asking price sold for an average of 8.9 percent below asking price in October, the lowest since May 2015. The premium paid in both September and a year ago was 12 percent.
  • Nearly six in 10 properties for sale (59 percent) received multiple offers in October, down from 63 percent in September and 64 percent from October 2015. October marked the seventh straight month of declining multiple offers.
  • The share of properties receiving three or more offers fell to 30 percent, the lowest level since the beginning of this year. Thirty-five percent of properties received three or more offers in September, and 36 percent of properties received three or more offers a year ago.
  • Compared to a year ago, there was an increase in the share of homes receiving three or more offers in homes priced $400,000 to $499,000 and $2 million and higher, while the share of low- to mid-priced homes experienced a decrease in three or more offers, particularly in homes priced $300,000 to $399,000, which dropped the sharpest – from 43 percent in October 2015 to 18 percent in October 2016.
  • About a third (31 percent) of properties had listing price reductions in October, up from 25 percent in September and down from 32 percent in October 2015.
  • Nearly half (45 percent) of REALTORS® were concerned about high home prices and housing affordability, while 26 percent indicated they were concerned about a lack of available homes for sale. REALTORS® also were concerned about a slowdown in economic growth, lending and financing, rising interest rates, and policy and regulations.
  • REALTORS®’ optimism of market conditions over the next year has been trending downward for the past few months but is still in positive territory at an index of 54 in October, unchanged from September but down from 57 in October 2015.

http://www.car.org/newsstand/newsreleases/2016releases/oct2016pending

San Diego County looks like the best in the state (highest index):

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*Note:  C.A.R.’s pending sales information is generated from a survey of more than 70 associations of REALTORS® and MLSs throughout the state.  Pending home sales are forward-looking indicators of future home sales activity, offering solid information on future changes in the direction of the market.  A sale is listed as pending after a seller has accepted a sales contract on a property. The majority of pending home sales usually become closed sales transactions one to two months later. The year 2008 was used as the benchmark for the Pending Homes Sales Index.  An index of 100 is equal to the average level of contract activity during 2008.

New Water-Conservation Law

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The new law only requires that sellers disclose if they are not in compliance – but most buyers will expect sellers to bring their house into compliance before close, won’t they?

http://www.car.org/legal/disclosure-folder/water-conserving-plumbing-fixtures/

Introduction

California  law requires property owners (for properties built before 1994) to install water-conserving plumbing fixtures by 2017 for single-family properties and by 2019 for other properties ). Additionally, if a property is altered or improved after 2014, then water-conserving plumbing fixtures must be installed as a condition of final permit approval.  (Cal. Civ. Code section 1101.4)

In 2012 the Transfer Disclosure Statement was expanded to include a check box for water-conserving plumbing fixtures. As explained in the TDS itself, the check box does not create a point of sale requirement.  (Cal. Civ. Code section 1102.6.)

Beginning in 2017 a seller of a single-family property will also be required to disclose whether the property is in compliance with the law. This same disclosure requirement will apply to other types of properties beginning in 2019. Even then, the law creates no point of sale requirement.  (Cal. Civ. Code section 1101.4 and 1101.5.)

Q 1. What is the purpose of the water conservation law?

A The legislature thinks that water conservation is a cost effective approach to the challenges created by not having enough water. Those challenges include future economic health; environmental health; growing urban areas; water reliability; waste water treatment; energy and other resource costs; and protecting and restoring aquatic resources. All of these issues were cited as reasons behind this effort to promote water conservation.

Q 2. Does the water conservation  law create any point of sale requirements?

A No. There is nothing in the law that requires the installation of water-conserving fixtures as a condition of sale.

Q 3. If there are no point of sale requirements, then what is required?

A The law will require owners of real property to install water-conserving fixtures simply because they own the property regardless of whether they are selling it. The requirement for installation is not immediate, but will take effect in later years depending on the type of property or whether improvements are made. See questions 15 and 16 below.

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San Diego #6

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In spite of record pricing, our NSDCC new-listing count this month is going to come in under last November’s count. Remember when greed was good? Apparently, staying put is better!

http://www.realtor.com/news/trends/20-hottest-markets-real-estate-u-s-november-2016/

While the nation is getting ready to digest massive amounts of turkey, the economic team at realtor.com® has digested a ton of data from our site for November. And though we’re a few days from the end of the month, we can go out on a limb and say it’ll be yet another month of record-low levels of housing supply, strong demand, and (not coincidentally) record-high prices.

The median list price looks to remain at $250,000 for a fourth straight month. That’s 9% higher than last year at this time, and sets a new record for November.

“After an eventful election, demand for real estate appears to be carrying momentum going into the holiday season,” says Javier Vivas, manager of economic research for realtor.com. “We  expect that to be put to the test, as mortgage rates sky rocket to new highs. But the economic foundations remain strong and most forecasts expect growth as we enter the new year, which should keep waves of buyers intent on entering the market.”

Viewing activity on our site shows that there’s still plenty of demand from buyers on the prowl for a home. But inventory of homes for sale is down 5% from October, and 11% compared with November 2015. It’s that combo of low supply and high demand that’s keeping prices high. And with only 363,000 new listings entering the market in November, the pickings will be even slimmer next month.

Although homes are selling a wee bit slower these days, as is typical in fall, they’re still moving 1% faster than last November. We’re projecting that homes for sale will have spent a median 82 days on market for November, three days slower than last month.

Flippant

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I agree with the author about answering questions casually – agents look like idiots when they make a flippant remarks about work. The condition of the ‘market’ is relative to your own personal situation – it could be good or bad.

http://www.bestrealestateblog.com/6-things-shouldnt-ask-real-estate-agent-thanksgiving-dinner

#5 “How’s the market?”

This is too broad of a question.

The market is never entirely good, bad, or somewhere in between. It’s always good for some people, bad for others. How the market is depends entirely upon you and your needs and circumstances.

Not a bad question really. But it certainly isn’t one that an agent can or should just answer flippantly. So if you ask it, maybe you should be prepared to get into your specific scenario so they can accurately answer it.

Too many people get flippant answers from agents and base their perspective on the real estate market, and overall economy, on off-handed answers to questions like this.

Dual Agency Case

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On the surface, this case seems unusual – the seller’s agent owes both the buyer and seller a fiduciary duty if the buyer’s agent works at the same brokerage.  It’s because the agents are working on behalf of the broker – hopefully this will cause better broker supervision of dual agency cases.

The big kahuna of cases will be when a class-action suit is filed against a brokerage for all of the ‘Sold Before Processing’ sales, where the sellers didn’t get open-market exposure.

http://www.sfchronicle.com/business/networth/article/California-high-court-decision-favors-real-estate-10629057.php

In a closely watched case involving dual agency, the California Supreme Court ruled unanimously Monday that a real estate agent representing the seller of a property owes a fiduciary duty to both the seller and the buyer if the buyer’s agent works for the same brokerage firm.

The case involved the sale of a luxury home overlooking the Pacific Ocean in Malibu where the square footage was in dispute. The buyer and seller were represented by agents from different Coldwell Banker offices.

Under California law, a broker may act as a dual agent for both the seller and the buyer in a real estate transaction, provided both parties consent to the arrangement after full disclosure that the broker owes a fiduciary duty to both.

What was at dispute in the case was whether that duty extends to “associate licensees,” who are the individual agents/salespeople who operate under that broker’s license. The court ruled 7-0 that it does.

Read full article here:

http://www.sfchronicle.com/business/networth/article/California-high-court-decision-favors-real-estate-10629057.php

Walkable

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Being walkable – living close to services – is a hot button for buyers these days, especially among the older set.  Here’s an article that backs it up – and may cause you re-think the McMansion in the ‘burbs.  Thanks daytrip!

Few people in America walk to work. Most of us drive to the supermarket. But more older people these days are looking for a community where they can enjoy a full life without a car.

Ben Brown and his wife, Christine, say they weren’t thinking about retirement when they moved to Franklin, N.C., a small, lovely town nestled in the Smoky Mountains near Asheville, a haven for many East Coast and Midwest retirees.

“We loved the idea of living in a small town in a rural mountain area,” Mr. Brown recalled. “And we converted a summer house to a year-round home to suit our tastes.”

Yet Mr. Brown, a 70-year-old writer, and his 66-year-old wife said they had second thoughts as they made the transition toward retirement.

“We realized ‘aging in place’ means a lot more than just a comfortable house,” Mr. Brown said. “So we began thinking more about ‘aging in community.’ That means an urban neighborhood where you can walk or take transit to just about everything you need.”

Then they discovered West Asheville, a vibrant, urban neighborhood that is brimming with trendy new restaurants, inviting shops and a number of bus routes into the larger city next door. Nearly every place they wanted to go was within walking distance, a major benefit for those who don’t want to drive everywhere as they get older.

“We always thought we’d end up in an urban environment,” Mr. Brown added. “We’re in one of the few places where you can comfortably live without a car in a growing, mixed-use neighborhood.”

In the age of the Fitbit and a growing cohort of active, engaged retirees eager to take their daily 10,000 steps, retirement communities have been slow to change. Eighty percent of retirees still live in car-dependent suburbs and rural areas, according to a Brookings Institution study.

Developments for independent retirees typically come in two flavors: isolated, gated subdivisions or large homes on golf courses, often in the same bland package of multiple cul-de-sacs. Both require driving everywhere, which is a problem for those who either don’t want to drive or can’t.

Enter a new paradigm: the walkable, urban space.

It may range from existing neighborhoods in places like Brooklyn or San Francisco to newly built housing within city and suburban cores from coast to coast. Though not primarily for retirees, places like Reston, Va., and Seaside, Fla., were early examples of the new urbanism built from the ground up. Among senior housing projects, examples include Waterstone at Wellesley along the Charles River in the Boston area and The Lofts at McKinley in downtown Phoenix. The theme is simple: Get out and walk to basic services.

Walkability, though, is much more than a hip marketing pitch. It’s linked to better health, social engagement and higher property values.

Read full article here:

http://mobile.nytimes.com/2016/10/15/business/the-future-of-retirement-communities-walkable-and-urban.html

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8,000,000 Millionaires in U.S.

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Here’s how we got here, and why it will probably continue – H/T daytrip!

http://www.bloomberg.com/news/articles/2016-11-21/cheer-up-america-1-700-millionaires-are-minted-every-day

The U.S. is home to a working class suffering from stagnant incomes and declining job prospects—widespread struggles that helped elect Republican Donald Trump. The relative wealth of Americans in all age groups keeps falling, compared with previous decades.

At the same time, the country is also home to an unprecedented amount of wealth, a divergence that has made income inequality a household phrase. America has $55.6 trillion in private financial assets and more millionaires than any other nation in the world by far. Today, more than 8 million households have financial assets of $1 million or more, not including homes or luxury goods, according to Boston Consulting Group. From 2010 to 2015, the number of millionaires jumped by 2.4 million. Another 3.1 million will be created by 2020, BCG estimates, at the pace of 1,700 new American millionaires every day.

But before your faith in upward mobility is restored, realize this: The very oldest Americans hold a disproportionate chunk of all those trillions, and they’re handing it off to their already well-off kids in what is the largest generational transfer of wealth in history.

Inheritance is an increasingly significant driver of wealth in America. Wide swaths of the country live from month to month with virtually no savings safety net. About three-quarters of the country are “strugglers,” unable to save anything from year to year, the Federal Reserve Bank of St. Louis concluded in a study last year. The other quarter of the country, however, are “thrivers,” the St. Louis Fed said—people who successfully save money and accumulate wealth over the years. These include the top 1 percent, who have steadily taken more and more of the nation’s economic output.

Being a millionaire isn’t what it used to be. A net worth of $1 million has the same buying power today that $341,000 did in 1980 and that $45,000 did 100 years ago, according to Bureau of Labor Statistics data. If you’re making six figures and saving regularly, you should eventually end up with a million dollars or more in your investment accounts. (You’d better, since you’ll need to save that much to have any hope of maintaining your lifestyle in retirement.

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Inventory Watch

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The NSDCC new pendings rebounded nicely this week, with 52 houses opening escrow, which is about the weekly average for the last couple of Novembers.

It’s not too late to buy an expensive home this year, and there are still plenty to consider.  There have been 452 houses sold that have closed over $2,000,000 this year between La Jolla and Carlsbad, and there are 489 currently for sale – about a year’s supply!

Click on the ‘Read More’ link below for the NSDCC active-inventory data:

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