Let’s mention those who will be making the market in 2019:
Those with the least amount of experience and education.
Those who don’t own a home here yet.
People in these two categories aren’t hampered by the over-analysis that comes with owning a home here currently. Those who already own a home in San Diego have paid less, and have a lower mortgage rate. We are trying to make sense of giving that up, and paying more!
It’s a burden that thwarts most attempts to move by current homeowners.
But those who don’t study it too hard, or don’t already own a home will forge ahead. They have already decided that buying a home make sense in this environment, and have their own personal consequences if they don’t buy. They aren’t going to be talked out of it either.
Figure out how many people are in that group, and you can predict the future.
Here are the categories:
First-timers
Down-sizers
Up-sizers with strong needs
Incomers from out-of-county/state/country
Affluent people
Everyone else will enjoy their comfortable spot on the fence and wait-and-see what these folks will do. Let’s acknowledge though that people in these five groups aren’t tethered with the same restraints as the rest of us – it’s just a matter of how many people are in these groups.
How many? My guess is 80% of those who bought in 2018.
Apple today announced a major expansion of its operations in Austin, including an investment of $1 billion to build a new campus in North Austin. The company also announced plans to establish new sites in Seattle, San Diego and Culver City and expand in cities across the United States including Pittsburgh, New York and Boulder, Colorado over the next three years, with the potential for additional expansion elsewhere in the US over time.
Apple plans to grow its employee base in regions across the United States over the next three years, expanding to over 1,000 employees in Seattle, San Diego and Culver City each, and adding hundreds of new jobs in Pittsburgh, New York, Boulder, Boston and Portland, Oregon. The company recently opened its newest office in Nashville, Tennessee and Apple’s Miami office is projected to double in size.
Jerry Riopelle is a long-time favorite of those who grew up in Phoenix, Arizona, and unfortunately he just cancelled his two retirement shows at the end of the month due to a health issue. His New Years Eve gigs were legendary, and here’s an example – Get Well Jerry!
Sellers have not been moving as often, with a typical seller owning his/her home for 11.5 years before selling, the highest level in at least the last 38 years. The trend was especially obvious for older generations, as baby boomers typically owned their property for 15 years before selling, while the Silent Generation held on to their properties for 30 years before selling.
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In Houston, an agent uploaded photos of her listing that included models wearing underwear. The Association deleted them.
We allow photos and descriptions of properties that are highly exaggerated or distorted, but now we’re drawing the line at underwear models?
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There have been a number of banks and mortgage companies announcing drastic layoffs or going out of business altogether. But most have been refi shops, and now that rates are in the mid-to-high-4s, there’s nobody left for them to refinance.
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73% of today’s realtors have never worked in a 5% mortgage-rate environment. Let’s keep those rates low!
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Want to know one of the largest growth markets on the planet? The world’s 65-plus population. Already at a historical high of over 600 million people, it’s projected to hit 1 billion by 2030, and 1.6 billion by 2050!
AND…..this expansion will take place primarily in wealthy countries. In the U.S. alone, the spending of Americans ages 50 and up in 2015 accounted for nearly $8 trillion worth of economic activity. (Barron’s)
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Let’s hope that ‘secure collaboration and communication portals’ is 100%!
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Note: Following both the ’70s and ’80s prices booms, price increases slowed significant and mostly moved sideways for some years in nominal terms. Maybe that will happen again. Bill McBride
Brava closed yesterday, after a whirlwind of activity – here are the MLS stats:
We received 13 cash offers, and went through five escrows to get one to stick. Each time one would fall out, I went back to all of the other contenders to give them another chance to buy it.
Buyers would say that they had reviewed what’s needed (new kitchen, 3 bathrooms, windows, flooring, etc.), and were comfortable with the project.
Of the four that cancelled, three dropped out altogether once they did more extensive research.
Only one tied up the property, and then, after a few days, tried to work me down on price. They are looking for the desperate sellers and agents, and hope to convince you to drop another $20,000+ just get it over with.
It was Mr. T who tried to get me to cave, and he had agreed to pay $665,000. After further review, he wanted to drop the price down to $645,000.
But instead of just taking it, I went back around to all the other contenders and offered them another opportunity.
A different buyer agreed to pay $655,000, and Mr. T. held his ground, and backed out. But then the $655,000 guy cancelled, and in the next round Mr. T wanted to drop again, this time down to $635,000.
I got another buyer to do better.
We closed at $650,000.
It’s more work to keep all the contenders engaged, and keep tempting them to buy the house during our five-week adventure. But this is what I do for my sellers – I’m going to everything I can to get you that extra $15,000.
Today we attended the soft opening of the new Compass office at 1953 San Elijo Ave., Suite 101 in Cardiff By-the-Sea (next door to Cicciotti’s). More than 100 Compass agents will occupy both floors eventually (63 now).
Other offices being built include a 22,000sf, ground-level office in One Paseo in Carmel Valley, which will be the central hub for San Diego. Compass will be the exclusive residential real estate office in One Paseo, and have the valet parking right in front, along with 100 parking spaces.
The downtown Encinitas office on Coast Highway 101 will probably be the next to open early next year, plus there is another 11,000sf office being built out at the Equinox center in La Costa, which will be the new HQ for the Klinge Realty Group.
Compass started in San Diego in January, and we joined in July when there was 160 agents. By the end of this week, there will be 320 Compass realtors in the San Diego area!
The slowdown started during the summer, so there was some evidence of it by the beginning of August – and it has been in the news non-stop ever since.
Are sellers getting the message?
Maybe, but they must think it applies to someone else:
NSDCC Average List-Price-Per-SF:
Week
Under-$1M
$1.0M to $1.5M
$1.5M to $2.0M
Aug 1
$434/sf
$493/sf
$590/sf
$434/sf
$496/sf
$596/sf
$426/sf
$494/sf
$608/sf
$430/sf
$493/sf
$622/sf
Sep 3
$427/sf
$486/sf
$611/sf
$436/sf
$489/sf
$603/sf
$439/sf
$483/sf
$613/sf
$440/sf
$476/sf
$618/sf
Oct 1
$441/sf
$476/sf
$624/sf
$441/sf
$481/sf
$612/sf
$434/sf
$487/sf
$612/sf
$426/sf
$492/sf
$602/sf
$422/sf
$495/sf
$601/sf
Nov 5
$418/sf
$490/sf
$601/sf
$449/sf
$498/sf
$605/sf
$449/sf
$498/sf
$624/sf
$450/sf
$492/sf
$620/sf
Dec 3
$454/sf
$478/sf
$611/sf
$455/sf
$487/sf
$619/sf
Lower their price? They’d rather not sell – and this is December, when you’d think the sellers who are on the open market must be motivated.
Don’t get your hopes up about seeing a big dump on price in Spring, 2019. If it were to happen, it will happen quietly, and you’ll only see it after the fact in late summer, once sellers have exhausted their optimism.
