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Voodoo Cadillac

SCOTS‘s music is generally very upbeat, as they usually write and perform songs about dancing, sex, and fried chicken, which are main themes in songs such as “Cheap Motels,” “Soul City,” and “Eight Piece Box.” They are known for their live shows, which often include throwing fried chicken and banana pudding into the audience, and audience members invited to dance onstage. As a general rule, they are not hostile toward non-commercial taping of their shows:

Can It Continue?

When you look at our local incomes/wages and other traditional metrics, it is hard to make sense of how the market keeps going.  But it has!

How does that happen?

There are three sources of buyers that don’t rely on a regular job to buy.

We see younger buyers being funded by the Bank of Mom and Dad to generate larger down payments, or to pay cash outright, and many are inheriting big bucks when an elder’s estate – probably full of rental properties – is liquidated.

But another segment that is fueling our demand are the buyers from more expensive areas – places that make the San Diego metro area look cheap.  Buyers from the LA/OC and those from the Bay Area come here and think we are giving them away!

Look at these median sale prices from Los Angeles Magazine – and when I checked these for the last 90 days, they are even higher now:

Our market is connected to others nearby, and as long as we all keep moving together, the sorting of the haves and have-nots will continue.

Treehouse Vibe

It’s only money!

LINK

San Francisco’s housing market is so out of control, the new owners of a cavernous hillside home in the city offered nearly $1 million over asking in order to pre-empt a bidding war.

1 Miguel Street went into contract after just two days on the market, closing for $2.6 million. The out-of-state buyers made the deal before any other bids were placed, according to the realtor.

This kind of over-bidding shows the extent of the housing bubble in San Francisco, where a perfect storm of demand, speculation, and exuberance drive real-estate prices sky-high.

Built in 1957, the mid-century modern home sits on an oversized lot surrounded by trees in the Glen Park neighborhood. Featuring three beds, two and a half baths, and roughly 2,040 square feet, 1 Miguel Street offers panoramic views through the floor-to-ceiling windows. Wood-paneled walls, exposed beams, and a wrap-around deck give it a distinct treehouse vibe.

The residence was a custom commission from local architect Worley K. Wong. The kitchen and bathroom went through a renovation before hitting the market, according to the listing.

Glen Park is a southern enclave of San Francisco that draws wealthy buyers because of its seclusion, picturesque streetscapes, and suburban feel. The median list price in the neighborhood is $1.8 million, and homes typically sell for 124% of the list price.

Kayla’s Trendy Tuesday

Kayla has never lived in the desert:

Even though it is “fall,” it’s 100 degrees outside. WHAT IS HAPPENING???

October is almost over and Halloween is ONE week away! Time to break out the decorations and start carving those pumpkins! Some might be thinking, “Mine are going to start rotting once I carve them” – the answer to that question is YES. However there is a solution to the problem!

Methods to have your pumpkin last longer:

https://food-hacks.wonderhowto.com/how-to/prevent-carved-uncarved-pumpkins-from-rotting-0158208/

Other people might be thinking, “I don’t have time to sit and carve a pumpkin.” No worries! There are other ways you can decorate a pumpkin. Something I’ve noticed that has become really popular is chalk paint! I currently just colored my pumpkins with a white and black chalk paint marker and it was SO easy. There’s metallic chalk markers too! You can get them at Michaels!

http://www.michaels.com/metallic-chalk-marker-set-by-craft-smart/10481352.html

Some of the white pumpkins look so good (especially for those that have white/grey kitchens and living rooms) that you can use them throughout the holidays! We have a few white pumpkins at home and it looks awesome! Talk about #trendy.

Here’s our Pinterest board if you want more ideas! It also includes cool unique decorations for your home!

https://www.pinterest.com/klingerealty/halloween-decorating/

Make sure to check out next week’s Trendy Tuesday for my take on the best neighborhoods for trick or treating in North County San Diego!

Disaster Follow-Up

Whether is be fires, earthquakes, floods, or nuclear attacks, we are all susceptible to being in a disaster zone.  How does it affect real estate?  Let’s keep an eye on the recent fires to gauge what we might expect if disasters came our way.

I mentioned in a tweet that I thought the Santa Rosa real estate market would be invigorated.  There should be more demand for the homes for sale from the affluent folks who don’t mind buying another home, rather than rent. We can also imagine that contractors have rushing to the scene to offer their rebuilding packages, and/or buyouts. 

Hundreds of people are probably setting up temporary living arrangements on-site, and many if not most will eventually rebuild.  But it is the ones that don’t rebuild that will make the market for the next 1-2 years – and the speculators who buy them out and rush new product to market will be the ones who bring back the old values quickly.

A snapshot of the first effects – the less affluent are hit hard:

LINK

Excerpted:

Last week, Jeff Sugarman escaped his burning home in Santa Rosa, California. This week he faced the horrors of the region’s housing market.

One of the first inquiries Sugarman made was about a rental house nearby that was listed for $3,700 a month on Zillow. But when he emailed about seeing it, the owner told him the price had soared.

“He said insurance companies had been calling him all day and they were willing to pay $4,700 to $5,000 (to house fire victims) so I’d better be prepared to pay more,” Sugarman said, adding that he told the landlord he was “appalled” and “this was wrong”.

Sugarman passed the communications to the local newspaper and the US justice department, which he said was investigating price gouging in the wake of the northern California fires that killed at least 42 people and destroyed 8,400 buildings.

A spokesman for the California state attorney general’s office said investigators planned to enforce a price gouging provision in the state penal code that prohibits anyone from raising prices more than 10% following the declaration of a state of emergency.

Noting that Santa Rosa had declared a state of emergency about a year ago over the housing shortage and the homelessness crisis, councilwoman Julie Combs said: “Now we’ve lost 5% of our housing and 15,000 people have lost their homes.”

Sonoma County supervisor Susan Gorin, wearing a respirator and boots as she sifted through the ash of her destroyed home last week, said it was her lower-income neighbors who were most likely to be displaced from the area.

“We are so successful as a tourism destination,” Gorin said. “We produce a lot of lower-income jobs – in wineries, in restaurants, in hotels. It’s going to hurt our economy if we don’t get temporary housing for the people who lost their homes in the fire, as well as those who were already on the edge of losing their homes and the homeless.”

Adrienne Lauby, who runs Homeless Action, an advocacy group in Santa Rosa, said there were at least 3,000 homeless people in the area before the fires and the numbers were going up.

“People are already becoming homeless,” Lauby said, adding that she knew of several people who had been kicked out of informal housing arrangements so that the people they were staying with could take in family members displaced by the fire. “There are pop-up encampments all over the city. People are sleeping in the parks, they’re staying in their cars – there are still 425 people in the shelters.”

“All of these people,” she said, “are at risk for homelessness and the winter is coming.”

Gorin said the board should look at options such as trailers from the Federal Emergency Management Agency (Fema), recreational vehicles and cargo containers converted into homes.

This Week’s Disrupter

Talk about buying the listing! This is the UK version of Opendoor, and they are tempting sellers with a promise of a 97% cash advance on their house.  This idea is fantastic, and operators could make a bundle, right up until the market flattens out or declines. Then what?

LINK

An excerpt:

Nested, the U.K. estate agent that provides a cash advance to help you buy a new house before you’ve sold your old one, has raised £36 million in further funding. The round was led by Rocket Internet’s Global Founders Capital, and brings the less than two year old startup’s total funding to just shy of £50 million. Buying and selling houses is a pretty capital intensive business, after all.

Launched in January 2016, Nested competes with high end estate agents by providing all of the services needed to sell your house, but with a key difference. In addition to handling valuation, marketing and sales, the startup will offer you up to 97 per cent of the market value of your property as a cash advance, that way you’re able you to purchase a new home prior to your old one selling.

Not only does this eliminate much of the stress and uncertainty of selling and buying a home, including what your final budget will be, but also ensures that you are never caught up in the dreaded property ‘chain’ and potentially miss out on your desired home, or are kept in limbo indefinitely waiting for your property to sell.

In return, Nested charges a fee from 2-4 per cent (plus VAT) depending on how long it thinks it will take to sell your home, and reduces that fee by half if it fails to sell the property for an amount above its initial valuation (something I’m told hasn’t needed to happen yet). The idea is to incentivise the startup to always try to get you the genuine market price or above. It is also slightly different to the original pricing model that saw Nested split the difference 70/30.

In a brief call, Nested co-founder Matt Robinson, who previously co-founded online payments company GoCardless, told me that the startup’s best sales funnel is people’s bad experience trying to sell their home with a competing agency. He framed the current market as online-only estate agents who are targeting the low end by charging a flat up front fee but with little guarantee they’ll go on to sell your home, and traditional brick ‘n’ mortar agents who no longer add as much value as they used to now that listings and market data has moved online.

LINK

Inventory Watch

Let’s compare this week NSDCC stats to the same week in 2016:

Price Range
2016 # of Listings
Avg LP/sf
2017 # of Listings
Avg LP/sf
0-$800K
38
$408/sf
17
$443/sf
$800-$1400K
259
$437/sf
161
$497/sf
$1400K-$2400K
264
$590/sf
261
$623/sf
$2,400,000+
426
$979/sf
373
$1,171/sf

The 17 houses listed under $800,000 is the lowest count ever, and in the next category, $800,000 to $1,400,000, the count is down 38% also.

On the high-end, the $979/sf was the average on December 12, 2016 which was the first time the listing count came under 400. I can’t get the MLS to report the $$/sf when the listings count is over 400.

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