Opendoor, the ibuyer who purchases your home for cash and closes escrow at your leisure (as long as you don’t mind paying their 6% to 13% fees plus home repairs) has made a deal to acquire a discount brokerage:
Opendoor announced Tuesday morning that it has acquired Open Listings, a real estate site that offers homebuyers a 50% refund on the fees their real estate agent would have received.
With the acquisition, Opendoor will now be able to buy a home directly from a seller, then help that seller find a new home (whether it’s a newly built home or an existing one), offer them a mortgage, and close on the sales through its own title operations.
Basically, buyers who use Open Listings find, tour, and buy homes through the platform. Real estate agents only come into the process when it’s time to make an offer on the home.
They are building a platform similar to the Red team’s, and both are weak in the beginning – they both offer inexperienced agents or no help at all at the initial showing of the home. These guys expect you to go to the listing agent’s open house, and then make an offer with their online agent.
I believe that every buyer should receive professional advice from their agent while at the property – and reflect those details into the offer price. Otherwise, you pay too much!
The online agents haven’t seen the house in person, and can’t offer the same expertise. Besides, if you are an online agent, you just want to hurry up and write the offer and expect any defects to come out during the home inspection. The buyers end up basing their entire investigation on a $500 guy who has no fiduciary duty to them and whose job is limited to the moving parts of the house.
But let’s say you can live with that.
These types of disrupter platforms are entirely dependent upon all agents sharing their listings on the MLS. But as the major brokerages continue to input their listings on their company website first (Redfin’s publicly-stated policy), the MLS will soon become a relic, and the marketplace of last resort.
All of the market conditions are pushing in this direction. We are transitioning from the Wild, Wild West to Full-Tilt Chaos!
Kayla has been on the ground for less than a month, but she is fitting in nicely. Her boss William and fellow Corcoran agent Sam do a Facebook Live event every Tuesday, but William was gone today so Kayla pinch-hit in his place. I love her poise and professionalism – I hope she comes back to San Diego some day!
For those who wonder what has been propelling the housing market lately, let’s note that people keep moving here – an average of 1,500 per year moved to Carlsbad over the last nine years!
The City of Carlsbad shows the current population to be between 110,000 and 113,000 people today. When fully built out in 2035, the general plan calls for approximately 135,000 people:
I hope those extra 20,000+ people bring the big money!
The total number of pendings is down to where they were in February, so the off-season has begun. What can we expect the rest of the year?
NSDCC detached-home sales compared to 2017:
Third of Year
# of 2017 Sales
# of 2018 Sales
YoY % change
Jan-Apr
883
843
-5%
May-Aug
1,243
1,116
-10%
Sept-Dec
958
?
?
This year’s selling season was plagued with wildly over-priced listings, so no surprise that the number of sales dropped off year-over-year.
I think we’ll see a rebound of sorts, and sales in the last third of 2018 only be about 5% less than in 2017. Anyone trying to sell during the off-season should be more motivated, and as a result, be priced more competitively. We’ll see!
While we’re touching on the Sacramento area, what can downsizers expect? Let’s look at Placerville, which is about halfway between Sacramento and Lake Tahoe. This is an older video but they are still in business:
Here is a 2,776sf short sale on five acres being offered for $450,000:
Hat tip to Rob Dawg who sent in this example of what’s happening in most markets – lower-end prices are holding, and it’s softer in the higher-end markets.
But because the higher-end sellers typically have more horsepower, and aren’t going to ‘give it away’, prices could just stagnate, instead of dropping.
You could call it a levitating market too, and many will think that it’s just a matter of time before pricing turns south.
Here are reasons why prices are sustainable:
We have newer agents representing the buyers. Even if they have nine years experience, they’ve never seen anything but a seller’s market. If their buyers don’t like the price, they just pass on the house, instead of making a low offer.
Rarely is a seller motivated enough that they might consider a lowball offer. You’re lucky if you get a call back, let alone a counter-offer.
Agents are looking to provide less service, not more. The trend is to capture the consumer’s contact info, send it to the call center, and have dialers hound them until they buy or die.
Buyers are so used to pressing a button to transact everything else that they don’t even know they need good help. All buyers and newer agents know how to do is to find a decent house and process the order.
With traditional, discount, and disrupter agents all offering less expertise, the fixers stand virtually no chance of selling – they are too much of a turnoff to buyers who are essentially do-it-yourselfers. It’s too easy to skip them.
If fixers aren’t selling, then just the good-to-excellent homes have a chance, and buyers are typically willing to pay close to list for those.
If there were a couple of sales in the neighborhood that were lower, the vast majority of potential sellers would quit, rather than panic. When their motivation is already suspect, it won’t take much for them to wait until some mystical time in the future when they can sell for that extra 5% to 10%.
Buyers who go straight to the listing agent are in effect, unrepresented, and will just end up paying retail.
Off-market properties would only sell if they get their price.
Sellers who can’t get their price can always rent for astronomical prices, and try again next year.
Combine those together and it’s easy to see how prices will stall, or could even drift upward with only the creampuffs selling. The inventory counts won’t matter either, because if they grow, it will just mean a sea of OPTs lying around, nothing more.
With a healthy economy and no foreclosures, there isn’t any pressure on sellers to dump and run. Besides, where are they going to go in such a hurry?
It will be a binary market – buyers will say yes or no. Pricing should stay about the same, but if buyers were to dig in, then sales could be affected. Keep an eye on the sales count – they are the precursor, and they’ve been holding up nicely the last couple of months (at least between La Jolla and Carlsbad).
A study released Thursday by Trulia examined the housing situations of homeowners 65 and older and compared it with a decade ago. It uncovered a 3.4% jump in the number of seniors working in 2016 compared with 2005, and a 1.7% increase in the number living with younger generations.
It also showed that seniors appear to be holding off on downsizing just the same as they were 10 years prior.
Only 5.5% of seniors moved, according to Trulia, and of those who did, the split was pretty even between single-family and multifamily residences.
But Trulia analyst Alexandra Lee points out that while the percentage of downsizers hasn’t changed, the number of those moving actually has.
“Because the Boomer generation is so much larger than previous generations, that 5.5% moving rate translates into very different raw numbers across the years,” Lee wrote. “There were about 7 million more senior households in 2016 than 2005, meaning 386,000 more senior households moved in 2016.”
The age at which seniors decide to downsize has also shifted. The survey revealed that in 2005, seniors were moving into multifamily residences by age 75. By 2016, this had moved to 80.
Hat tip to my father-in-law who sent this in – he wasn’t around then!
What a difference a century makes! Here are some statistics for 1918:
The average life expectancy for men was 47 years.
Fuel for cars was sold in drug stores only.
Only 14 percent of the homes had a bathtub.
Only 8 percent of the homes had a telephone.
The maximum speed limit in most cities was 10 mph.
The tallest structure in the world was the Eiffel Tower.
The average US wage in 1910 was 22 cents per hour.
The average US worker made between $200 and $400 per year.
A competent accountant could expect to earn $2000 per year.
A dentist $2,500 per year.
A veterinarian between $1,500 and $4,000 per year.
And, a mechanical engineer about $5,000 per year.
More than 95 percent of all births took place at home.
Ninety percent of all Doctors had NO COLLEGE EDUCATION!
Instead, they attended so-called medical schools, many of which were condemned in the press AND the government as “substandard.”
Sugar cost four cents a pound.
Eggs were fourteen cents a dozen.
Coffee was fifteen cents a pound.
Most women only washed their hair once a month, and, used Borax or egg yolks for shampoo.
Canada passed a law that prohibited poor people from entering into their country for any reason.
The Five leading causes of death were:
1. Pneumonia and influenza.
2. Tuberculosis
3. Diarrhea
4. Heart disease
5. Stroke
The American flag had 45 stars.
The population of Las Vegas, Nevada was only 30.
Crossword puzzles, canned beer, and iced tea hadn’t been invented yet.
There was neither a Mother’s Day nor a Father’s Day.
Two out of every 10 adults couldn’t read or write.
And, only 6 percent of all Americans had graduated from high school.
Marijuana, heroin, and morphine were all available over the counter at local corner drugstores. Back then pharmacists said, “Heroin clears the complexion, gives buoyancy to the mind, regulates the stomach, bowels, and is, in fact, a perfect guardian of health!”
Eighteen percent of households had at least one full-time servant or domestic help.
There were about 230 reported murders in the ENTIRE U.S.A.!
