The top-of-the-line Pardee tract in Carmel Valley opened this weekend, and they had hundreds of people show up. The first release had eight homes available, starting in the $1,700,000s, but prices go up quickly from there:
With so many homes being built in Pacific Highlands Ranch, the Solana Beach school district is struggling to catch up. They need to build a new elementary school, or expand the existing ones. It looks like they are a little short on funds to build a new school (would they bump the Mello-Roos?), or instead they could bring in more portable classrooms:
Rob Dawg left this comment regarding the seniors who are aging-in-place:
Wait until autonomous vehicles add another ten years.
Self-driving cars have the potential to change everything about real estate:
Seniors be able to stay in their home longer.
Homebuyers could live farther away and get more home for their money.
Kids wouldn’t need parents driving them around.
But one of the big hurdles is whether people will trust computers to drive the cars for them. You may know that Mercedes-Benz has installed automatic braking systems, and I have one on my car – and hate it.
When I drive up slowly at an intersection, the computer is overly-sensitive, and brakes too early – and it’s not gentle. With no warning, the computer slams the brakes on, giving riders a whiplash, and in one case, causing the driver behind to hit me! The system has a manual turn-off button, but it’s hard to find and not permanent so it’s a constant battle. Donna agreed that I’ve altered my driving considerably, but I’m giving up. I’m going to get a normal car instead.
More hurdles that will cause autonomous vehicles to be delayed:
Have you seen homes going pending that weren’t selling a few months ago?
You could make a case that the market is somewhat seasonal, and just the increase in the number of buyers would improve the market. But junk is junk, whether you’ve been looking for days or months.
We already discussed how sellers of newly-listed homes are bursting with optimism now that the selling season is underway. But those sellers who have been lingering for weeks or months have already tested the market, and should be more realistic.
My theory is that some buyers are cutting deals on the older listings.
Multiple offers are back. Three examples from the last 24 hours:
One-story house that had been on the market for 30 days (plus Coming Soon)
Two-story house that just listed for $1M in SEH, plus
A contingent buyer around $2 million getting beat out twice to non-contingent buyers.
It is remarkable that in 2019, realtors still don’t have rules, laws, procedures, or any effective guidance on how to handle a bidding war so the sellers get the best deal while giving every buyer a fair chance to compete.
But we do have a summary form! We could do this on a napkin:
A recent WSJ survey found these to be turn-offs to luxury-home buyers:
Granite
Jetted bathtubs
French doors with mullions (vertical bars between the panes of glass)
Unsightly built-in entertainment systems
Bidets
Heavy brown furniture.
Home sellers are smart to rectify problems, and do smart tune-ups to their home prior to going on the market. Remember my listing on Gladstone? Not much had been done (the seller was the original owner from 1987), and the walls were covered in earthtones when we arrived:
Donna coordinated a five-day blitz of vendors who scraped the cottage cheese and re-textured the ceilings, re-painted the interior, and installed new lighting and master-bath counter & faucet. The seller spent about $9,500 for tune-ups, $2,500 for staging, and $1,000 on buyer-requested repairs, or about $13,000.
We listed for $499,000, and it closed yesterday for $538,200!
Doing smart improvements, pricing attractively, and hiring an agent who is adept at conducting a bidding war all contributed to the success.
Hat tip to Richard who sent this in, but honest, I’ve never seen him packing! There are 1.3 million realtors, and 2-3 get killed every year – I’ll take my chances. But I don’t think women should do open house by themselves.
Realtors often go into houses they don’t know, with people they’ve just met. Safety efforts have become a real focus, but the potential for violence has some of them taking up arms.
Scott Smith spends a lot of time at the range, making sure if he has to use his gun, he’s fully trained and ready. But Smith doesn’t just shoot for sport. He legally carries a concealed gun for his job as a realtor.
“People think realtors have a lot of money, that they are rolling in the dough, so people automatically think – ‘there’s an easy target.'”
With more seniors than ever aging in place and choosing not to sell the family home, an estimated 1.6 million fewer properties are now available in a market already experiencing a critical shortage, according to Freddie Mac.
That is about the same number of new single-family and multifamily housing units built each year.
That stay-put trend is crashing into the rising demand for housing from the huge millennial generation: fewer homes for sale will continue to put upward pressure on already overheated home prices.
“There’s a stalemate,” said Jane Fairweather, a longtime real estate agent in Bethesda, Maryland. “We can’t get enough housing for the couples who want to put their kids in good public school systems.”
“We believe the additional demand for homeownership from seniors aging in place will increase the relative price of owning versus renting, making renting more attractive to younger generations,” said Sam Khater, chief economist at Freddie Mac, who estimates that the current market needs about 2.5 million more homes to meet demand.
The reasons more seniors are choosing to stay in the homes where they raised their families are manifold.
“They love their homes, it’s their chief investment, they love their neighborhoods and their communities, and they love the control they get in their own house,” said 64 year-old Louis Tenenbaum, a housing advocate in Kensington, Maryland. “They decide when to get up, when to go to sleep, what to eat, who to have as visitors.”
Tenenbaum is preparing to age in place himself. He is in the midst of building an elevator into his three-level home. He has also widened doorways, made a curbless shower and lowered his kitchen counters, should he ever be in a wheelchair. he notes that 63 percent of the $383 billion spent on remodeling each year is among people over 50 years of age, according to Harvard’s Joint Center for Housing. The trouble is they don’t always add features for aging in place.
“If we can shift the remodeling industry to be doing those types of things when they’re already remodeling, then we really start to change the housing infrastructure and we create this place where people can enjoy living out their years in their home,” Tenenbaum said.
That’s great for homeowners, but not so great for young buyers hoping to move into larger suburban homes.
Bill featured the article on CR, and he had these thoughts:
Even when people move to retirement communities, many will not sell their homes. They will rent them instead – especially in the higher priced areas with significant capital gains – since they have to pay capital gains if they sell (above $250K exclusion for single, $500K for married), but the property steps up in value when they pass away. So they can leave the property to their kids with no taxes.
This could be fixed with policy changes. Either eliminate “step up” basis (take away the incentive to hold), or give older homeowners a one time unlimited exclusion (so they can sell while they are alive).
Aging in place is great for the senior, but what frequently happens, is a four bedroom house is occupied by just one person (inefficient). This is another area where zoning changes could help – let the senior sell her larger family home without tax consequences, and move to a smaller home in the same community (so they can keep their local ties).
Wouldn’t it be nice if everyone had a one-time unlimited exclusion from the capital-gains tax! Would it make you move? Is it the only thing that’s holding seniors back? I don’t think so. The general comfort of staying put has many physical, mental, and emotional benefits to them. But if the government ever gets realistic about fixing the housing crisis, this would be the place to start.
Yesterday, we celebrated the life of Gary Thompson, the greatest salesman I’ve ever known. Gary and I worked at ReMax by-the-Sea together for a couple of years, and then he was with us at Klinge Realty for 10+ years.
Gary honed his craft by selling cookware door-to-door back in the 1960s, and became the company’s #1 salesman nationwide. He trained dozens of others, and his impact was evident – more than 100 people showed up yesterday, and twenty rooms were booked at the Carlsbad Inn by old friends who flew in from across the country to pay their respects.
He started selling real estate for Re/Max in Colorado, and eventually made his way to Carlsbad 20+ years ago. He joined the local Rotary Club, where he was a very active member, and was an Oceanside Senior Angler – Gary loved to fish!
Locals will remember his toothpicks (his anti-smoking device), and his love for Carlsbad. He used to walk the beach every day, and was a regular around downtown – you may have seen us having breakfast at Don’s Country Kitchen! Gary took pride in having sold the proprietor his first house, and he may have ate enough breakfasts there to pay it off!
I loved seeing him at his open houses, where he would be conducting a clinic on salesmanship. Nobody worked an open house like Gary; because not only did he know the right things to say, but he also delivered them in a way that caused people to appreciate his expertise, and want his help.
Gary was a fan of the blog, and described it being the new-age way to educate clients. He loved talking real estate with people, and helping them become better consumers – which we agreed is an agent’s primary responsibility.
In our new era of flashy advertising and teams hustling buyers into homes, Gary’s old-fashioned style of caring about his clients will be sorely missed.
New listings stayed in check this week, with only 83 properties coming to market. With so many being re-lists, buyers are probably underwhelmed so far – but that’s not stopping them. The NSDCC pendings are hopping!
While we would expect increased activity this time of year, the 18% increase in pendings over the last two weeks is better than the 15% we had in 2018.
Interestingly, the price category where we thought we might have the most trouble due to the reduced MID is actually the hottest right now. The count of pendings priced between $1,000,000 and $1,500,000 has gone up 40% over the last two weeks!
“Between 2007 and 2017, top-earning renters increased by 175%, while homeowners within the same income bracket exhibited a 67% growth rate,” a study from RentCafe.com revealed. “Out of the 43.3 million renters nationwide, 2.1 million are top earners according to the latest available U.S. Census data. Back in 2007, there were only 774,000 high-income renters.”
A 2018 study from the Joint Center for Housing Studies of Harvard University also found that high-earners were increasingly renting. The number of renters with incomes above $100,000 rose 5% in 2017, “bringing the cumulative increase in 2012–2017 to about 2.6 million,” the report revealed. Furthermore, the rentership rate in that income bracket hit an all-time high (19%) in 2017 with higher income households accounting “for the vast majority of renter growth over the past five years.”
