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Ridic

I had a buyer refer to our market as ‘ridic’, and the point is painfully obviously to anyone who has been looking to purchase a new home for months or years – the pricing seems to get more ridiculous every day.

Today’s goal is to buy the least-ridiculously-priced home!

In the last post, you could see that the government may have some ideas, but they won’t be implementing any effective relief measures for a while – if ever.

What can buyers do?

You have two choices:

  1.  Go up in price.
  2.  Compromise.

For those who have resources, going up in price is probably the easiest way to solve the problem.  Add more down payment, get a co-signer, have the seller buydown your rate, or buy more lotto tickets!

Tip for self-employed:  You can qualify for a Freddie Mac loan with one-year’s tax return.  You are getting ready to file your 2016 returns now – bite the bullet and don’t include so many write-offs this year!

The thought of compromise makes every buyer cringe – Chris Rock says that women don’t like to go backwards in lifestyle, but try to give it a shot.  A smaller home, yard, garage, or fewer other features may be worth it to stay in the same area.  Or widen the target area – consider going farther out.

There are elementary schools rated a 10 in several areas:

We know the elementary schools in the Del Mar School District (Del Mar and Carmel Valley) are all rated a 10, but they are among some pricey real estate.  But there are other ’10’ rated elementary schools in the Solana Beach and Encinitas school districts, and here are four ’10’ rated elementary schools in Carlsbad too, where, if you don’t mind driving 5-6 more exits up the 5, you money goes further!

For those who prefer no maintenance, buying a pimped-out condo or townhouse might be a better choice than an older house!

I think we could see the move-up market come alive with people who bought a temporary residence.  If you have more horsepower coming your way in a few years, buy something that will last you for now, and get the forever home later!

I’m happy to discuss your situation, and help you find solutions!

My cell phone is (858) 997-3801, call or text!

Smart Growth

Those who want to get involved in smart growth/affordable-housing issues can attend the San Diego City council meeting today at 2:00pm.  The City Council members have submitted ideas, summarized here:

  •  Sell or lease government-owned land.
  •  Defer or waive permit/development fees.
  •  Streamline the approval process.
  •  Solicit state and federal funding for affordable housing projects.
  •  Encourage granny flats and smaller houses and lots.
  •  Reduce parking requirements.
  •  Tax rebates for building affordable housing.
  •  Issue specific policy on short-term vacation rentals (Airbnb).

Andrew covers the topic here:

http://www.voiceofsandiego.org/topics/government/city-councils-odd-couple-finds-common-cause-on-housing/

Screaming Towards Single Agency

Zillow and our local MLS provider Sandicor reached the Great Impasse a year or two ago when they couldn’t agree on terms under which Sandicor would keep feeding our listings automatically to Zillow.  Agents complain all the time about Zillow’s inaccuracy, but it’s our own fault – agents have to handle them manually, and many are unaware.

But Zillow out-foxed Sandicor, and went directly to the big franchises and made their own deals to obtain their listings.  Zillow is now reaching out to the little guys too – they called me and offered to upload my listings direct from the MLS, and all I had to do is sign one form.

What’s the point?

Zillow has the killer instinct, and will throw their weight around to get what they want.  They are willing to cross the line occasionally too, evidenced by their $130 million settlement in the Move, Inc. lawsuit, and their frat-house employee lawsuit they settled for around $5 million.

I mentioned briefly that the brokers are attempting to build a portal to rival Zillow, but it’s a waste of time and money.  Zillow already has the eyeballs, and they get it about advertising. Any new portal would have to build a better mouse-trap AND advertise as much as Zillow just to catch up.

Or deny listings to Zillow.

But Zillow has already out-smarted any attempts to block listings, because they have gone to the brokers directly and cut their own deals.  The Zillow Team realtors are going to stick with Zillow, not go to some broker upstart portal.

But here’s the catch:

The Broker Public Portal promises to send leads back to the listing broker.

It is all they have to offer the brokerages, and it sounds tempting, because no listing agent wants the three-headed monster (Zillow’s three outside agents) advertising on their listings.

But such a system would encourage more in-house, dual-agency transactions.

It is where the industry is heading, whether it is ethical or not.  Zillow is already way ahead with their ‘Coming Soon’ ads, and every real estate trainer is prodding agents to ramp up advertising of hot new listings prior to MLS input.  Unfortunately, NOBODY talks about the listing agent’s fiduciary duty to the seller to expose the home to the entire marketplace via the MLS.

I see 2-3 listings per day being inputted as ‘Sold Before Processing’, the realtor marketing sessions tout that ‘deals are being made’ at their private meetings, and most brokerages offer their agents a better commission split if their listing is sold in-house.  The ethics of exposing a listing to the entire marketplace via the MLS is being ignored.

Dual agency is tricky for most, and it can be messy too if something goes sideways – the agent is squarely in the sights of every lawyer.

With the tight inventory, agents don’t feel the need to share their commission with an outside agent – especially one who might make repair requests or screw up the closing somehow.  It will be better to hog the listing, make higher commissions, and have easier closings.

We are screaming towards single-agency, where the buyer will get no representation.  If they want advice, they can pay for a buyer’s agent themselves, or just get dragged to the finish line by the listing agent’s clerks.

Hope you like the price and condition, because if you don’t, the next guy will.

Inventory Watch

How about that weather!  Flash-flood warnings, high-surf advisories, and 1-2 inches of rainfall in the last 72 hours!

It’s not stopping buyers and sellers from getting together though!

We had 59 new pendings this week – the most since mid-October!

The lower-end exploded this week too.

There are only 24 houses for sale under $800,000, and their average list price per square foot jumped 10% in one week, to $470/sf.

The $470/sf is higher than the category above it, $800,000 – $1,400,000, which averaged $463/sf.  It’s the first time that’s ever happened!

HIGH SURF ADVISORY REMAINS IN EFFECT UNTIL 4 AM PST TUESDAY…WAVES BREAKING  22 TO 25 FEET ALONG WEST AND NORTHWEST FACING BEACHES. HIGHEST WAVES WILL OCCUR DURING THIS AFTERNOON AND EVENING.

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

(more…)

Bring Back Dirty Cash?

Just a month after President Donald Trump’s inauguration, a federal anti-money laundering program that targets luxury real estate is set to expire.

The dragnet monitors pricey home deals for signs of dirty cash, helping detect criminals who launder money through real estate. Manhattan and Miami-Dade County were the first markets scrutinized by the feds.

Here’s the big question: Will Trump — who made his money as a developer — keep the heat on the real estate industry? And if the administration of a developer-turned-president chooses not to renew or expand the regulations, will it be perceived as a conflict of interest.

Unlike other industries where cash changes hands freely, real estate has few checks on buyers.

Drug dealers and corrupt foreign officials have been busted buying condos and mansions in the United States. While the Obama administration rules were blasted by developers and brokers as faulty, they don’t seem to have hurt business as much as first feared since going into effect in March.

Read more here:

http://www.miamiherald.com/news/business/biz-monday/article127809744.html

Virtual Furniture

Do you want to add some pizazz to your listing, but don’t want to spend thousands on staging?  This company will add virtual furniture to your photos for $32 each:

http://boxbrownie.com/s/virtual-furniture-us

Buyers who see the virtually-staged photos and then visit the house in person are bound to be disappointed, but maybe they won’t remember?  It’s better than them not visiting at all.

I haven’t tried them yet – let me know how it goes!

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