Digital Nomads

by | Sep 12, 2020 | Jim's Take on the Market, Where to Move | 1 comment

Where to move? How about roaming around for a while? Hat tip Drew!

According to the BBC, “Bermuda is among a handful of small territories and nations around the globe which, after successfully managing the first wave of the virus, are now launching year-long remote worker visas in hopes of cushioning battered economies with an influx of monied foreigners.” The Work from Bermuda certificate costs $263 to apply for and, if accepted, covers 12 months.

Bermuda’s residency visa program is in good company. Georgia (the country) recently announced its own new project, Barbados’s Welcome Stamp plan has a higher bar for entry but also caters to remote workers, and Spain’s Self Employment Visa offers entry into all the perks of living in Europe. Finally, Estonia’s Digital Nomad Visa (in progress long before the pandemic) is among the most flexible of the new visa schemes.

The kicker is, this time around it’s not just millennials. In Bermuda’s case, they are seeing “well-heeled businesspeople from major East Coast hubs in North America who have been weekending on Bermuda for years” now applying for visas. And the relatively high income thresholds for the Barbados visa likely entices established professionals over 20-somethings just starting out (those digital nomads flock to places as diverse as Bali, Mexico, Thailand, Portugal, and Colombia).

Bidding Wars Everywhere!

by | Sep 10, 2020 | Bidding Wars, Jim's Take on the Market, Market Buzz | 6 comments

Our Serra Mesa townhouse listing garnered five offers – one at list price, and four over! It will be the highest sale in the history of the complex. Hat tip to ‘just some guy’ for sending this in:

In the ultra-competitive Westchester market, the odds were stacked against Heather Harrison and her client. A stately suburban home that was listed on Tuesday already had 30 showings lined up for that upcoming Saturday.

“I put in a full price offer at $1.275 million, that was the asking price,” Harrison said. “The client went to highest and best on Monday at 5 p.m., and I counseled my client to bid accordingly, waive his mortgage contingency, then we bid $1.45 million and we got it.”

With the suburbs seeing record volume, agents and brokers like Harrison, who runs Compass’ operations in Westchester alongside her husband Zach, are counseling their clients on how to prevail in a fierce bidding war.

According to Redfin, offers on single-family homes in August were most likely to be involved in a bidding war, at 56.6% of offers, followed by townhomes at 54.7% and condos at 41.3% – 54.5% of offers overall engaged in bidding wars.

Time waits for no buyer in the suburbs

With record-low interest rates, paltry inventory and a surge in buyers, agents are advising clients to be extraordinarily aggressive to win.

“You’ve got to really advise your clients appropriately, quickly and make sure that they know there’s not even a week to come see the property – you’ve got to go,” Harrison said. “The property comes on within 24 hours, and if it meets your buyers criteria you want to get them out to see it.”

When it comes to counseling a client through a bidding war, education is paramount, Harrison said. Prospective buyers need to be armed with as much data as possible about the market they’re targeting. Another critical element, according to agents, is not to make the deals contingent upon things like inspections and not to “nickel and dime” the seller. That will set the prospective buyer apart, Harrison said.

“I’ve also been encouraging them to write kind of like a love letter so to speak to the sellers, so they’re not just like an offer on a piece of paper, they’re giving a little color about themselves, why they’re moving, why they like their house, and giving a picture of them so that the sellers can feel good about who they’re selling to and it’s not just about the numbers,” Harrison said.

To win, waive those contingencies goodbye

Susan Hamblen, broker and owner of Long Island-based EXIT Realty Achieve, said that her agents are slammed with business, and homes that are “priced right” are getting offers within the first 24 hours.

“Homes are going $40,000 to $60,000 over ask, easily,” Hamblen said, attributing the bidding wars partly to the influx of buyers from New York City. “We have about two months of inventory and the buyer demand is just crazy.”

Eugene Cordano, vice president and director of sales at Halstead in New Jersey, said that in his market, bidding wars have triggered offers between 15% and 20% over asking, across all home prices.

To that tune, Cordano agreed with Harrison that it’s important to stick out in a bidding war.

“The old axioms of real estate do not change,” Cordano said. “But the highest bid does not always prevail.”

The influx of buyers from New York City to New Jersey at the beginning of April through June meant that there was more money to spend on homes.

“For our seller-clients, we were counseling them on how the buyers waive appraisals or waive mortgage contingencies,” Cordano said. “With the influx of New York City buyers bidding these houses up, oftentimes waiving the financing/mortgage/appraisal contingencies was not a difficult thing to ask for and most of them did that.”

When it comes to buyers, it’s a different story.

“If the buyer really wanted that home, it was often, “How do we structure this offer to make sure that it stands out and wins the day?’” Cordano said. “That’s not a scientific process. Sometimes that is something that’s very emotionally driven, or driven to the point where the buyer really wants it and is just willing to pay and will offer, either in price or in terms, something that will win the day versus all the other buyers that were there.”

Spreading out in the hottest market will cost you

Vickie Mox, an agent with RE/MAX Dallas Suburbs, covers the Collin County area, north of Dallas. She said the surrounding towns are busiest right now.

The Dallas suburbs of Frisco and Plano are the hottest because they have low rates of inventory and are priced to sell, spurring bidding wars, Mox said.

“Houses that are more unique with large lots and that have been totally updated [sell quicker], and there’s nothing for the buyer to do but move in,” Mox said. “[That listing] could conceivably have 10 offers, and that’s usually between the price range $250,000 to $400,000.”

Once you get over $400,000 there are fewer buyers and there’s less demand for the property, according to Mox.

“But a $500,000 house could have multiple offers if it has everything the buyers are looking for which is being updated to a large yard or a three-car garage, in the right neighborhood and right school district,” she said.

In Colorado Springs, which Redfin said recently has the No. 1 hottest ZIP code right now, there could be at least three to five offers on a home in the first 48 to 72 hours of being listed, according to Keller Williams Associate Broker Scott Sanchez.

“The typical thing here in the Springs has been a $10,000-plus minimum to go over list price,” Sanchez told HousingWire.

“Maybe two years ago it was kind of common for five grand over, maybe $10,000 tops,” Sanchez said. “Last year, you start getting into the $10,000 to $15,000 range and this year it’s been $20,000 on the good homes that are well marketed and even if they’re priced up, they still will get 20 grand over.”

Bidding wars aren’t necessarily uncommon for Peck Barham, a real estate agent at TeamBarham, Keller Williams Homewood outside Birmingham, Alabama, but not at this rate.

“We haven’t seen [bidding] quite like this,” Barham said. “I think in August something like 600 homes went under contract in a three-week period, which for Birmingham is a lot. That’s a lot of homes going real fast.”

Link to Article

Proposition 19 and Market Surge

by | Sep 10, 2020 | 2021, Boomer Liquidations, Boomers, Jim's Take on the Market, Tax Reform, Thinking of Selling? | 14 comments

Proposition 19 is on the ballot, and the California Association of Realtors wants you to believe that if it passes, there will be a surge of new inventory from seniors finally being able to sell their homes and take their ultra-low property-tax basis with them to a new home in a county not previously available.

They have deftly orchestrated a campaign that touches on all the hot buttons too. Just look at the title – who doesn’t want to protect the homes of seniors, severely-disabled, families, and victims of wildfire or natural disasters?

But they ignore that seniors have been able to sell and take their ultra-low property-tax basis with them for years – but only if they move to one of the 10 counties in California (out of 58) who have previously approved the benefit.

The ten counties are the major population centers; Alameda, Los Angeles, Orange, Riverside, San Bernardino, San Diego, San Mateo, Santa Clara, Tuolumne, and Ventura. So they want us to believe that seniors have always wanted to move to the sticks – and if passed, the taking of their property-tax basis is the game-changer that gets them to finally move?

Other thoughts:

  • How much do seniors need to spend on a replacement home in the sticks? Half a million should do it, so without Prop 19, the regular tax basis would be around $5,000 per year.  If a senior pays less than $2,000 annually on their old home….the actual savings isn’t a large amount ($1,000 to $3,000 annually) but yes, every little bit helps.
  • Did the grandkids already move to the same town? Probably a more-important ingredient than saving $1,000 to $3,000 per year.
  • It only benefits seniors leaving the big cities for small towns. Are they going to live without their modern conveniences like doctors (a big issue), shopping, entertainment, and a way of life to which they’ve become accustomed to for decades, just to save $1,000 to $3,000 per year?
  • Prop 19 protects the ability of kids and grandkids to inherit the ultra-low tax basis from the parents and grandparents.  How does that create more homes on the market?

But the Association is throwing their full weight behind Prop 19, have gotten the firefighters on board in order to play the wildfire card, and they are advertising on TV:

To me, the thought of Prop 19 creating “tens of thousands of housing opportunities” is preposterous.  But seniors are overdue, and maybe it will be the final reason that gets them to move.  For that reason, let’s add the passing of Prop 19 to our list of reasons why the 2021 selling season will be like no other!

Check out their impressive website:

https://www.carhomecoalition.com/

MLS Upgrade

by | Sep 9, 2020 | Jim's Take on the Market, Realtor | 5 comments

I spent 10-15 minutes watching the first zoom call by our MLS representatives yesterday who were informing us about the big MLS upgrade coming on September 21st.

But it turns out that the big ‘upgrade’ doesn’t mean we will get a shiny new car to replace the turd we’ve been driving around since the mid-90s.  Instead, they will tear our current system apart, and hope we can figure out how to put it back together – see the FAQs above.

Not only that, but the ‘upgrade’ will means from September 17-20 they will turn the MLS into ‘read-only’.  No new listings, no price reductions, no new pendings, etc.

Great – put us on an involuntary four-day vacation while you deconstruct the main tool we use to sell homes, and then make us put it back together by ourselves.

The real purpose for the ‘upgrade’ is so our MLS will better conform to RESO standards, which would make it easier to create a national MLS someday.  The only reason to have a national MLS was if you were going to have a search portal to go with it, and mount an attack on Zillow.

We did get more news about that today.

The Broker Public Portal announced they have hired a face of the project.  Inman News wrote a full article on him, where he said that he expects to overtake Zillow in the next two years.  Here’s the closing segment:

“When that shopper is ready to become a buyer, and wants real information about the property she’s interested in, she doesn’t get re-directed to some random agent who has probably never seen the house. She goes right to the agent who knows that property best. That’s better for the client, and better for the agent.”

Rather than spending hundreds of millions to advertise to consumers, the BPP will spread the word on Homesnap via agents, according to Rand.

“It’s a lot easier and cheaper to market to a million real estate agents than 250 million raw consumers. If we get the agents, they’ll bring the consumers,” he said.

He thinks consumers are going to leave Zillow because agents tell them to use Homesnap?  The Homesnap app would have to be a far-superior portal for that to happen, AND the Premier Agents who make a good living from advertising on Zillow would have to want a change.

Sounds far-fetched to me, especially within two years.

San Diego Distressed Homeowners?

by | Sep 9, 2020 | 2021, Forecasts, Foreclosures, Jim's Take on the Market | 4 comments

With our unemployment rate being higher than it was during the Great Recession, it would be prudent to worry about homeowners defaulting on their mortgages…..except we didn’t even make this list:

Those who do go into default should find their lenders being very accommodating even after the moratoriums expire…..unless the homeowner has a load of equity, which virtually all do in San Diego.

Realistically, the worst thing that will happen is that they will have to sell!

Coastal North By Price Range

by | Sep 8, 2020 | Jim's Take on the Market, Market Conditions, North County Coastal

Above are the North Coastal interactive graphs broken down by price (which includes Oceanside, which doubles the inventory of homes for sale under $1 million vs. NSDCC). Our total sales in 2020 should be about the same as they were last year, which is a reminder that 30% to 40% of the listings every year don’t sell – the more-casual sellers didn’t bother to list at all this year.

Interesting that the higher-end pendings are currently setting records for any time of year. The elite are taking advantage of the low rates and are on the move!

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