It is assumed that the real estate industry is ripe for disruption. We see a new whiz-bang website just about every week that was developed by two guys in a garage who think they have the answer – but then are never heard from again.
The reason is advertising.
Zillow got to the top because they were spending $100 million per year to advertise. Anybody who is willing to spend that type of money can dance their way into the hearts of consumers.
Bigger players will be looming in 2017.
1. We talked about Opendoor, the flipping company who buys your house for cash in 3-7 days at a below-market price based on algorithms. Their fees range from 6% to 12%, which would only appeal to desperate sellers – which have been few and far between in San Diego. Opendoor is only operating in Dallas and Phoenix, so expanding to the tony coastal regions might take a while. But they just received $210 million in venture capital, and have 200 employees closing $60 million per month in transactions currently. They are expanding to 10 unnamed cities, and hope their fast money can attract a homeowner’s first phone call. But once sellers hear their (low) bottom-line, only a great salesman could convince them to not shop around.
2. Another big-money contender is Quicken Loans, the second-largest retail mortgage lender in the country. They just announced that they are acquiring a ‘technology platform’ to appeal to more home buyers directly. LINK
“Finding a reputable agent and a great home go hand-in-hand,” said Ron Frankel, OpenHouse Realty CEO. “I am confident that the work John Kvasnic, OpenHouse Realty’s Chief Product Officer, and his team have done in both arenas will help In-House Realty become the premier destination for those looking to work with the best agents in their community, while also helping them find the home of their dreams. It’s the perfect fit.”
They don’t mention that their recommended agents are paying Agent Ace a referral fee of 35% of their commission. There is a big difference between the ‘best agents in their community’, and ‘best agents in their community who are willing to pay a 35% referral fee’. The second group is much smaller, and typically they are the realtors who are getting outworked by the ‘best agents in the community’. But consumers won’t figure that out until it is too late.
Quicken Loans spent $21.1 million on Google advertising alone in 2014, more than any other mortgage lender. They could become a major player if they spend enough on advertising – they already spent it in the mortgage space, and are up to the #2 mortgage-lender nationwide (look for their Super Bowl ad).
3. The founder of Uber is another potential disrupter, but only because of their previous smashing success. Their real estate package follows the course of most outside disrupters who think transparency is something the sellers want – but they don’t.
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.
Once sellers figure out that disruption/transparency may not be in their favor, selling the old-fashioned way where they hold all the cards will sound like a safer choice.
We already know that the industry is in retreat. The old-school realtors who think they deserve a five-figure paycheck for completing fill-in-the-blank contracts will think retirement sounds better than ever. Mid-range and better agents are scrambling to build teams and be Redfin-ish in their conveyor-belt approach, even though the pitfalls are obvious. It wouldn’t take much to tip the whole thing over at this point.
Zillow feels like an old friend by now, but who knows what they might do? Amazon or Google could jump in too, and if they did, look out.
Whoever spends the most advertising dollars, wins!
Here’s a look at the annual number of NSDCC listings – this year, we are going to exceed 5,000 for the first time in five years:
# of Listings
MSP YoY %diff
MLP – MSP
Additional inventory is encouraged….up to a point. In 2006, the inventory ballooned to 6,046 listings, which was 9% higher than the previous year’s count. The surge in new listings set buyers back on the their heels, and sales plunged 13% in 2006 compared to 2005.
Will 2017 be the year that the inventory sees a real surge?
A summary of the conditions leading into 2017:
Highest NSDCC prices ever.
Highest rates in two years.
Highest inventory since 2011.
Highest seller optimism ever (MLP – MSP).
Hopefully the Trump Effect will help buyers keep moving!
This year won’t be over soon enough for music legends!
George Michael’s ‘Faith’ won the Grammy of Album of the Year in 1989, sold over 100 million albums world-wide (only 24 artists/bands have done that) and had eight #1 hits on Billboard Hot 100 in the U.S. This is one of his best live performances on Youtube – can you imagine if he would have toured with Queen, a la Adam Lambert:
The Freddie Mercury Tribute Concert for AIDS Awareness was an open-air concert held on Easter Monday, 20 April 1992 at London’s Wembley Stadium, for an audience of 72.000. The concert was produced for television by Ray Burdis and broadcast live on television and radio to 76 countries around the world. The concert was a tribute to the life of the late Queen frontman, Freddie Mercury, with all proceeds going to AIDS research. The show marked bassist John Deacon’s final concert with Queen (save one live appearance with Brian May, Roger Taylor and Elton John in 1997). The profits from the concert were used to launch The Mercury Phoenix Trust AIDS charity organisation. The concert began with short sets from bands that were influenced by the music of Queen (including many hard rock and heavy metal bands), including Metallica, Extreme (playing a Queen medley), Def Leppard (who brought Brian May onstage for a faithful version of “Now I’m Here”), and Guns N’ Roses. Between bands, several video clips honouring Freddie Mercury were shown, while the roadies changed the stage for the following act’s performance. The second half of the concert featured the three remaining Queen members – John Deacon (on bass), Brian May (on guitar) and Roger Taylor (on drums) – along with guest singers and guitarists, including Elton John, Roger Daltrey (The Who), Tony Iommi (Black Sabbath), David Bowie, Mick Ronson (Spiders from Mars), James Hetfield (Metallica), George Michael, Seal, Paul Young, Annie Lennox, Lisa Stansfield, Robert Plant (Led Zeppelin), Joe Elliott and Phil Collen (Def Leppard), Axl Rose and Slash (Guns N’ Roses), Liza Minnelli, and others. U2 dedicated a live performance via satellite from Tacoma, WA of “Until the End of the World” to Mercury.
Newly widowed, Kay McCowen quit her job, sold her house, applied for Social Security and retired to Mexico. It was a move she and her husband, Mel, had discussed before he passed away in 2012.
“I wanted to find a place where I could afford to live off my Social Security,” she said. “The weather here is so perfect, and it’s a beautiful place.”
She is among a growing number of Americans who are retiring outside the United States. The number grew 17 percent between 2010 and 2015 and is expected to increase over the next 10 years as more baby boomers retire.
Just under 400,000 American retirees are now living abroad, according to the Social Security Administration. The countries they have chosen most often: Canada, Japan, Mexico, Germany and the United Kingdom.
Retirees most often cite the cost of living as the reason for moving elsewhere said Olivia S. Mitchell, director of the Pension Research Council at the University of Pennsylvania’s Wharton School.
“I think that many people retire when they are in good health and they are interested in stretching their dollars and seeing the world,” Mitchell said.
Two Santa Maria men have been charged with allegedly committing real estate fraud involving losses topping $500,000, the Santa Barbara County District Attorney’s Office said Thursday.
Angelo Gabriel Naemi, 36, was arrested for suspicion of five counts of grand theft by false pretenses, and one count of conspiracy to commit grand theft.
Steven Paul Gonzales, 61, was charged with one count of conspiracy to commit grand theft.
“The complaint alleges that Naemi, a real estate salesperson, and Gonzales, a real estate broker, conspired to falsify documents in association with numerous short sale transactions,” the District Attorney’s Office said. “Their actions allegedly resulted in a loss to Fannie Mae and Freddie Mac of over $500,000.”
The complaint also includes special allegations for aggravated white collar crime and excessive losses.
The District Attorney’s Office investigated this case in conjunction with the Federal Housing Finance Agency, Office of Inspector General, Los Angeles Field Office.
The allegations stem from deals spanning between 2012 and 2015 involving properties on the 1200 block of East Fesler Street and 1600 block of Chadwell Drive in Santa Maria, 800 block of West Fir Avenue in Lompoc, 300 block of Price Ranch Road in Los Alamos and the 500 block of Dawn Drive in Buellton.
Naemi’s bail is set at $395,000, and he is scheduled to appear for arraignment in a Santa Barbara County Superior Court in Santa Maria on Thursday while Gonzales is scheduled for Dec. 30.
Gonzales was never booked into the County Jail, according to the Santa Barbara County Sheriff’s Department, so no booking photo is available.
Gonzales became sole owner of CornerStone Real Estate in Santa Maria in 2012 while Naemi is listed as a sales associate with the firm.
In his biography on the business website, Gonzales is listed as “experienced in residential sales, short sales, income/commercial property sales, 1031 IRS tax deferred exchanges, business opportunities, commercial leases as well as new home construction.”
After working as an engineer for Hughes Aircraft, Gonzales has been involved in real estate since 1988, the website says.
On his own website, Naemi states he moved to the Central Coast in 2004 from San Diego and previously worked in the Wells Fargo mortgage department before becoming a licensed real estate agent.
At the rate our local Case-Shiller Index has been rising over the last few months, we will be looking at 2% to 3% appreciation per year – or less.
“Home prices and the economy are both enjoying robust numbers,” David M. Blitzer, managing director and chairman of the Index Committee at S&P Dow Jones Indices.
“However, mortgage interest rates rose in November and are expected to rise further as home prices continue to out-pace gains in wages and personal income.”
Blitzer noted that measures of home affordability—which are based on median incomes, housing prices and mortgage rates—have fallen by 20 percent to 30 percent since home prices hit a bottom in 2012. While consumer confidence is high and unemployment is low, home prices cannot keep rising faster than incomes and inflation, he said.
Here are the recent San Diego Non-Seasonally-Adjusted CSI changes:
The highest reading of the San Diego NSA CSI was 250.34 in November, 2005.
The last two weeks were impacted by rain, yet both had more new pendings than new listings! We are heading into 2017 with momentum, but that, and about $5 will get you a cup of coffee if sellers come out too optimistic.
The one NSDCC market that is guaranteed to be hot are the homes priced under $800,000. There are only 29 for sale today, the lowest reading EVER!
Click on the ‘Read More’ link below for the NSDCC active-inventory data:
Jim the Realtor is legit - I interviewed three brokers; he said list price should be $100,000 higher than the other two brokers; listed it with him and had all cash (no financing) offer in two days, five day contingency period, closing in two weeks - and it closed at his recommended list price. I could not recommend anyone more than I recommend Jim the Realtor.
When we moved to San Diego in 2005 we rented a big house on Mt. Soledad (La Jolla) with 180 degree ocean views for the same payment as a mortgage on a dump in Chula Vista. Clearly something was wrong. Yet, the media was full of the usual happy-talk nonsense, so I was glad to find Jim's blog. I've followed his honest assessments and data since.
We decided to sell and move to AZ at Thanksgiving. Dec. 1st we met with Jim to sell our home. We closed today (29 days later). Jim orchestrated a feeding frenzy -- we had 25 showings in 2-1/2 days, multiple offers, and sold for well over asking price. I'd say he earned his commission! We have owned and sold homes in 5 different States always using experienced, productive, full-time realtors. Jim outshines them all.
You don't decide to sell and close 29 days later over Christmas (with COVID lockdown) without some miracles. Donna was amazing at performing lots of those miracles and ensuring that everything was done right and on time. They are a terrific team with a very responsive and professional network.
Where do we begin..2020 has been a year for everyone. When COVID hit and shut down both my husband and my businesses, we were left with a mortgage and very little income coming in. We were stressed, scared and felt stuck. We made the hard decision to sell our home and move out of state. We contacted the Klinges' and spent a good hour going over what we hoped we could accomplish. Jim and Donna came over with comps in hand and suggestions on improvements to get our house ready for the market. It was overwhelming to think about, but Donna was there and one step ahead in every scenario. Basically we just approved what they suggested and Donna handled literally everything. We placed our house on the market and within the first day we had multiple offers well above asking price! We couldn't believe it. We were overjoyed! Jim countered the offers to weed through them, and everyone came back with way more. It was amazing, and we are ?? sure it was because of the staging and repairs the Klinges suggested we do.
Due to unforeseen dishonesty from the buyers lender, we hit a big hurdle when trying to close. We had already moved out of state and were shocked when three days before closing the lender dropped a bombshell on the buyers and us. However, Jim and Donna handled it like veterans, not afraid to play hard ball and represent their clients. After a few phone calls with us, and several between Donna and the lender, they had a plan B-Z to make sure we were taken care of. In the end we closed with even more money than we ever thought possible and with very little work from us. The Klinges handled this entire "2020" worthy event with the utmost professionalism and did everything in their power to not only make this as smooth as possible for us, but we also walked away with more money from the sale of the house than we ever hoped for. After working with Jim and Donna, you don't ever use anyone else. They are hands down the best team to represent you in any scenario.
Working with Klinge Realty Group was a great experience! They are very responsive, professional and knowledgable about the real estate market! I would definitely recommend Klinge Realty Group.
Jim and Donna Klinge made the sale of our condo extraordinarily easy. They know the market and gave us sound advice backed by details and very considerable experience, reflected both in the initial pricing and subsequent negotiations. They work together as a team and are always available to talk. We had a few challenges with our property and they were able to coordinate the resolution to everything, including items that I would not think would ordinarily be their responsibility to handle. They made the whole process effortless on our part. They are folks with high integrity and we cannot recommend them highly enough.
Review for Member: Donna Klinge
I cannot believe there are no reviews of Donna yet, ugh!! She is the secret sauce of the Jim Klinge/Donna Klinge combo! I will touch on Jim here, but Donna is why I'm so totally loyal to these two (no offense to Jim :)).
I consider myself a rather savvy buyer/seller. I've bought/sold 7 times in about 15 years. On the buy side, Jim is the PERFECT combo of: completely digitally savvy (he will pull data all day long until you feel comfortable with your chosen house, area, school district, anticipated appreciation rate...anything!), he's super well respected and known in the area by other agents, an amazingly cool but strategic negotiator, is totally devoid of desperation for a sale/commission, and more.
Then once you get into contract phase, Donna literally handles every last and final detail in a concierge-like manner -- totally shielding you from the daily back and forth, noodling and annoyances of the buyer's requests. She solves it ALL; it's miraculous what that woman accomplishes over and above what is even expected in a buy/sell transaction.
On the sell side, Jim and Donna do the same, but even moreso. Donna in particular truly takes everything off your plate: she'll manage getting the house painted, the carpets replaced, she'll go on site (as she Jim both did for me when selling our rental properties) to work with the renters and make sure the house is ready to show -- freeing me to have to take time off of work to do so. They work with A+ integrity, too, so you know you are serving all parties fairly and lawfully throughout.
A home purchase/sale is the most considered you'll ever make. HIRE A SAVVY AGENT, not a friend!, and get what you need out of the transaction. Jim and Donna are our agents for life.
Jim and Donna Klinge are by far the most professional, personable and responsive realtors I have ever worked with. They provide VIP concierge level service in every area of the process of selling your home. My home was marketed so successfully that we received an offer the day after our first and only open house. Thanks to Jim's pricing and negotiating, our house is now the highest sold in our community. Jim's vast experience means he has worked with several realtors and knows the market all over north county. Donna is AMAZING in processing everything in the transaction. She scheduled trades people to work on the house in preparation for the sale as well as the repairs needed before closing. She communicated clearly every step of the way about what would be happening. She took the weight off my shoulders for the whole process. I will always use Jim and Donna for my future real estate needs and I whole heartedly recommend them to anyone buying or selling a home.
Jim and the team at Klinge Reality are without a doubt the best in the business! Not only was Jim helpful and extremely knowledgeable, he was patient and determined to help me find my first home. Jim and his team have been in the business for many years, and it shows. Jim is a wealth of knowledge and was my biggest proponent despite the temperature of the competitive market. I ended up getting the perfect property in my dream neighborhood all thanks to Jim. From the day my offer was accepted, Donna was a real lifesaver. She was extremely helpful, responsive, and knowledgeable when it came to every minute detail, and held my hand through the process. As a first time home buyer I had no idea what the process would entail, but Donna curtailed every concern I came across and made the escrow process feel seamless. Jim and Donna provided me the best home buying experience, and I am very grateful for all they did for me. It was truly a pleasure to work with Jim and Donna and I am already looking forward to the next time we work together!
Review for Member: Richard Morgan
Richard is an amazing realtor! He has high integrity and genuinely cares about his clients and their needs. Richard paid close attention to what I was seeking in a home and was very patient in our search to find it. I would highly recommend Richard and will use him for future transactions. Truly a different kind of realtor experience!
Could not be happier with my experience with Jim and his team. He helped me sell a very unique and challenging property. Throughout the entire process he was always available, honest, transparent, trustworthy, and always put my interests as a seller first. A (rare) true professional! During close of escrow Jim went above and beyond to complete the deal. It would not have been possible without his experience, fantastic team, and pure dedication. Highly recommended!
Thanks Jim and Donna Klinge!