This house has a history – it was once the family compound for Alaska Airlines! It was foreclosed in 1994 when the lender received no bids and took it back for the balance owed of $6,372,931 – and they sold it for $3,350,000 six months later. It was then resold for $4,000,000 in 2001.
At the height of the market in 2007, the former owners of this property took out a mortgage for $8,500,000, but the lender foreclosed in 2014. They finally sold it for $2,437,500 a year ago, and those new owners just flipped it for $2,995,000 or $3,750,000 depending on the data source. This time it was marketed and sold as a vacant lot with approved plans.
This chart shows the generational changes among non-homeowners about their interest in owning a home.
Being interested doesn’t mean they are buying, necessarily, but it’s a step in the right direction – especially for the millennials, who picked up the largest net gain of +15% (blue minus red).
In previous years, the total number of pendings has remained steady in September and October, so I guess it’s not a big surprise the trend has continued this year – it’s just 50% higher!
People are still looking too – this is the highest 7-day moving average of the year:
The time-honored tradition of buyers hoping to sway sellers with a personal introductory letter came to an abrupt halt this month with the new FHDA form (see snip above).
Not only has it been customary to submit a letter of introduction with your offer, but if you don’t, the listing agent usually asks about the buyers. I had one last week say, “Tell me their story” which probably wasn’t meant to gather information to use against them, but who knows?
Paragraph 8A mentions ‘actual or unconscious bias’. Agents who are stuck in their ways may not realize how this information is being digested.
It’s not just for agents either. Paragraph 7 specifically includes sellers and landlords too.
Nobody reads these forms so the practice will probably continue for a while, which means that those who DON’T include a love letter could be hurting their chances if other agents keep doing it.
They say that everyone is fleeing the urban markets for the country, and this is a good example of how much further your money will go. It is fairly close to town too – you wouldn’t really need to change doctors, etc. and for those who need a roomy granny flat, this one is spectacular!
29780 Reza Ct., Vista, CA 92084
4 br/4.5 ba one-story house
2 br/1 ba guest house above the garage with kitchen and laundry
The narrator says it’s “the greatest park of its kind in America”, and “the Miami Beach of tomorrow”. A terrific tour of the early days (before Sea World):
Red-hot home prices have more consumers saying now is a bad time to buy
Anyone out hunting for a house knows that bidding wars are no longer the exception, but the rule. Demand for housing has been unusually strong, due to the coronavirus pandemic, and supply is historically lean. That is a recipe for high prices, which are now beginning to take their toll on potential homebuyers’ confidence.
The share of buyers who say they think it’s a good time to buy fell in September, from 59% to 54%, according to a new survey from Fannie Mae.
Home values were up nearly 6% annually, according to CoreLogic, a data analytics firm. More consumers now expect those price gains to grow.
The percentage of respondents to the Fannie Mae survey who says prices will go up in the next year increased from 33% to 41%, while the share who said prices would go down decreased from 26% to just 17%.
More people do think now is a good time to sell a home, which is an improvement from the first months of the pandemic, when potential sellers didn’t want shoppers in their homes and worried about the state of the overall economy.
If seller sentiment improves substantially, that could help bolster supply and take away at least some of the heat in prices.
“Going forward, we believe the wild card to be whether enough sellers enter the market to continue to meet the strong homebuying demand,” said Doug Duncan, Fannie Mae’s chief economist. “The home purchase market requires the proper mix of home price growth and continued economic recovery to achieve sustainable levels of housing activity.”
A bad time to buy? When you can get a mortgage rate under 3%?
Any possible declines in home prices will be offset by higher mortgage rates, so there won’t be much, if any, savings in your payment if prices did come down – but fewer people in the survey think that’s going to happen. You would pay less property taxes, however.
Saying it’s ‘a tough time to buy’ would be more accurate. Finding the right house, at the right price, is extremely difficult – but many signs point to the supply increasing next year. Stay engaged, regardless of what the talking heads tell you about the general market. You only need one!
On Monday, the sale of our Carmel Valley listing on Brittany Forrest closed escrow.
I had discussed previously the valuation challenge when a recent seller had dumped on price and became the comp. It was a model-match that closed for $1,880,000 in May with a similar view but was in all-original condition, so for those who were just looking at the numbers, my $2,250,000 list price looked high.
I needed to deliver a compelling case on value, which I did – and we closed at $2,200,000.
I want to tell a story from when I was showing the home. I had received the offer from the eventual buyer, and knew we had a good chance of making the deal because I already had the chance to discuss the comps with him and his agent, and they saw the light.
But two other showings were scheduled the next day, and one was by a Redfin agent.
I want to give every buyer a chance to compete, so I got back to both agents and told them I had received a very good offer the night before, and to bring their A-game later that afternoon.
The Redfin agent arrived before her buyers did, so we had a chance to talk:
JtR: Are you new at Redfin?
Redfin agent: No, this is my second week!
JtR: Are you one of the showing agents who makes $50 per door, or an agent who writes offers?
Redfin agent: I’m a showing agent, and we make $50 to $80 per door opened, depending on price. I’m making $80 on this one.
JtR: Did you relay to your buyers or to an experienced agent in your office that I have received a good offer?
Redfin agent: I did tell our office agent, and they were going to try and join us, but it didn’t work out.
The buyers clearly had some interest, judging by their deliberate review of the home. They begin the critical walk to the front door, where good agents know that it’s time to ask the right questions, the right way, at the right time…for the buyers’ sake! We are here to politely assist buyers in making the right real estate decisions for them.
Because the Redfin model only includes opening doors on the front side, there isn’t a relationship between this inexperienced agent, and the clients. They’ve never met before. Her response in crunch time?
Redfin agent: Nice to meet you!
I jumped in and mentioned that we had received a good offer, and asked them if they wanted to buy the home. They waved, and walked off.
The sale is in the preparation. If they had been told before they arrived that they would need to make a decision promptly, they would look at the house differently – or cancelled the showing. I’m sure they will have other opportunities to buy a home, so it isn’t the end of the world, but they might not buy one this nice for this price – and they deserved to know that from the beginning.
It saddens me that the industry is going this way. Zillow will follow with the same model, and there are plenty of realtors currently that don’t aspire to any greater heights, either.
The worst part – and the only reason I bring it up – is that the unsuspecting buyers and sellers don’t know the difference between realtors, and there is no attempt by anyone in the industry to tell them.
Bill and I were talking about Prop 19 yesterday, and we both agreed it doesn’t seem to have much chance of passing because the California Association of Realtors, the authors of the initiative, haven’t been pushing a clear case of why it is important. The C.A.R. has every realtors’ email address, yet I had not seen much effort to even convince us, let alone the public.
Literally minutes after I said that, an email comes from C.A.R. with their latest TV ads. Both feature the same wildfire victim and are remarkably similar:
Let’s note that if it does pass, the start date is April 1, 2021. If wildfire victims and baby-boomers rush to replace their old home and take their ultra-low tax basis with them, it would add more to the Frenzy of 2021. But I am skeptical that many boomers will decide to move just because of this initiative. The other reasons to move play a bigger part (grandkids, cash-out, more suitable house, etc.) and taking the old tax basis will just be a sweetener.
There is a limit of adding up to $1 million to the old tax basis too.
